Public Versus Private Employee Salaries
I was watching the “Jersey Shore” on MTV last night, when my thoughts turned to reports by the Cato Institute, Free Enterprise Nation, and others, which found that federal worker wages were 50 percent greater than the average private employee.
When wages and benefits are combined, federal employees receive twice the amount of compensation than private sector employees.
There’s a fundamental disconnect there, in my opinion. You have to wonder who’s serving who. Private business is the engine that drives the economy and pays the taxes, and the economy is still struggling in many aspects.
As a small business owner and a taxpayer, I have often wondered how much government spending is really necessary and how long can we continue to fund government at the rate that we do. Now we’re at the point where the private sector is struggling to compete with the compensation provided by the public sector.
With deficits mounting at every level of government, you have to ask how much longer this excessive rate of government spending can go on.
While it would be easy to say that we could eliminate all government services – and pay no taxes — there are necessary government functions. The question is how many programs and agencies do we really need, and what should be adequate compensation. I’ll leave those decisions to the experts and the voters (and to you my readers), but it seems to me something’s got to give.
In business, when times are tight you have to reduce expenses and payroll. It’s difficult, but it is necessary when revenue is on the decline. That’s the business cycle. This reality often does not always affect the public sector however, and we witness negotiated employees raises year in and year out regardless of the overall economy.
Government, however, can act immune from these economic realities if it is allowed to borrow money recklessly and without oversight by the voters.
In my opinion it’s the syndrome of “other people’s money,” where it’s easy to spend lavishly when you don’t have a stake in the consequences. All too often that is case with public funds. I further believe that the downsizing principles that businesses have been applying since about the late ’70s need to be applied to government, and other sectors such as health care and education. In this way every dollar is accounted for and spent efficiently, and we begin to restructure government. We can’t continue the way we’re now going.
January 18th, 2010 at 8:09 pm
Come on Larry! You know that Public Employees (esp. in Albany) are vital to our local economy. ALL privatization does is pay a middle man(BIG Business) to provide a worker at a profit, while that employee gets minimum wage. The employer CHARGES premium rate, employee doesn’t get a Living Wage.
As of 11/18/09..Living Wage is generally defined as $11.50 per hour w/out benefits or/ $10.00 + Benefits…compared to the $7.25 minimum wage. NYS Consultants should and will decrease.
Art- I really appreciate your post. I hope you will continue to post, we need points of view (POV) that differ from mine. I can agree with your POV on a worker by worker basis. However my perspective is as a group of workers. The average worker utilization for all protected class workers are much lower than unprotected class workers. It’s human nature in my opinion. As such keep the government workers where needed, however reduce head count. Reality is closer to technology being a substitute for labor, not something for labor to watch while being paid. All organizations need to be able to substitute technology for labor on a scheduled basis, else labor and technology costs get out of control with output. This is not a kind statement, but it is the reality we all must live with (and embrace) if we are to grow our economy (and our personal opportunities).
January 19th, 2010 at 8:33 am
I work for a county agency doing very difficult work….cps….we are underpaid and overworked. The civil service regs state that you move up if you pass a test. That is why we have morons in charge. My bff works for the state and makes more money than me being a secretary, while I am a supervisior. What does she do all day? Go on facebook and read blogs about her TV shows….government business is has the same flaws as private business….people in them are just protected more
January 25th, 2010 at 5:27 pm
Hi Patrica Paul,
I really do appreciate your response, and like I told Art, I hope you will continue in this discussion.
Unlike some others, I believe there are necessary and legitimate needs for government. We do need our civil servants. Our child proctective services are critically important, but many of our state bureaucrats are marginal to downright dangerous.
The problem, as I see it, is 1.) the size of government has grow out of control, and 2.) many public employee salaries have skyrocketed over the past 10-20 years. They far exceed private employee salaries, particularly in the lower and middle echelons.
The reason — it’s other people’s money. There is little oversight over massive state and federal budgets. Due to collective bargaining agreements, wages and benefits rise, while annual revenues fall. Governments can run deficits, private enterprises must cut their budgets or close their business.
Patricia, I applaud the work you do, but I doubt many of your superiors, and most of the galaxy of high level state bureaucrats, are earning their keep.
We need to right-size government at all levels. We need to cut out entirely what is no longer needed and readdress the costs for critical government services. The money’s not there anymore.
I’d like to hear what other’s think…
February 2nd, 2010 at 4:19 pm
Of course, this is a great topic to get some passionate responses! I’ve worked in both the public and private sectors. While I believe I was well compensated for the work I did in the public sector, the private sector, with risk/reward yielded incredibly higher compensation levels (bonus, equity, etc.). Rather than straight salary, I’m more concerned with benefits, in particular health care and pensions that Government employees receive (they are conveniently overlooked in most discussions with public sector employees since they are promissory vs. tangible $$ in the present). Namely, the future cost of most public pension plans cannot be met under even the rosiest set of assumptions. How this will ultimately play out for New York State (towns, cities, etc.) which have made promises that can’t be kept to their employees remains to be seen, but it won’t be pretty. At a time when an increasing number of citizens bristle at the thought of higher taxes to pay for schools, roads and public safety, it’s not hard to imagine how they’ll react to paying more to support retired public employees.
February 2nd, 2010 at 5:40 pm
I believe that public benefits packages are ticking time bomb. They’re a tremendous liability in the coming year…
February 3rd, 2010 at 5:34 pm
Larry, I wish we could figure out a plan that would get people back to work…It would be wonderful and very profitable for our area and the nation. Good salaries, good healthcare, with a give-back attitude. Could we Mastermind this…might we come up with something effective?
February 5th, 2010 at 5:45 pm
Paul,
I do think we could accomplish this through technology and getting back into manufacturing and new technologies that would provide jobs here and exports abroad.
We can no longer continue to grow our unproductive economic segments, and discourage our productive ones.
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