second class citizens

In my opinion, 2010 is truly a pivotal year in our nation's history.  According to most commentators, beginning with  the Republican takeover in 1994 and ending with Barack Obama's victory in 2008, the U.S. had been in period dominated by conservative free market ideology.  Many of those same commentators will claim that the reckless reliance on "free markets" caused what they have dubbed the great recession.  Their solution is more regulation and more government.  In my opinion, however, just the opposite is in fact the case.  Yes I agree that Republicans have been in control of Congress for most of that period and held the presidency for eight years, but the Republicans who were making policy surely did not believe in free markets.  And obviously with a Democratic Congress and President, things are only getting worse.

Today what I want to focus on is the emergence of the public sector employee as the new bourgeoisie of our society.  All of us know people who work for the government: teachers, police officers, parking attendants.  But there are many, many more public employees who do jobs and work for agencies that the large majority of Americans have never heard of and will never benefit from.  All told, according to the Bureau of Labor Statistics, in 2008 (the last year data was on the website), there were approximately 23,000,000 public employees in the U.S.  That is a lot of employees, and it is a major change from how the U.S. labor market used to be structured.  We all know about the growth of the federal government has expanded tremendously over the past half century, but growth in state and local governments (often driven from federal mandates/revenue sharing deals like Medicare and Medicaid) has risen as well.  The United States had 2.3 state and local government employees per 100 citizens in 1946 and now has 6.5 state and local government employees per 100 citizens.  According to a study by Michael Hodges, in 1947, 78 percent of the national income went to the private sector, 16 percent to the federal sector, and 6 percent to the state and local government sector. Now 54 percent of the economy is private, 28 percent goes to the feds, and 18 percent goes to state and local governments.

Not only has the size grown, but public sector employees are being disproportionately compensated as well.   The average federal worker made $59,864 in 2005, compared with the average salary of $40,505 in the private sector.  And that is just compensation.  Public employees really make their money in benefits and pensions.  Unlike private employers who refuse to enter into unfundable pension agreements for fear of bankruptcy, the government does not have the same problem.  In June 2005, BusinessWeek reported that “more than 14 million public servants and 6 million retirees are owed $2.37 trillion by more than 2,000 different states, cities and agencies” in pension liabilities alone, numbers that have risen since then. State and local pension payouts, the magazine found, had increased 50 percent in just five years.  And that is just state pensions, not federal level pensions.

Last but definitely not least is the lack of accountability for public sector employees.  In the private sector, most jobs are an employment-at-will, and if you mess up you can be fired on the spot.  Not true for public employees.  Just look at teachers in America.  So much focus is on the fact of how the American education system is failing.  Well, there is one group most responsible for that: unionized teachers.  The unions make it impossible to fire bad teachers (and other public employees) even if they are grossly negligent.  This simply can't happen.  The reason why private employees are so much more productive than the public sector is because of competition: they are scared for their jobs.  They know that they must not only do a good job, but also constantly improve because that is what private employers expect.

The size of the government workforce is getting to a tipping point.  Public employees, and the unions that represent them, have grown so large that they now are extremely successful in influencing national policy.  Just look at the healthcare debate.  Thanks to union lobbyists, union workers will be exempt from paying the excise tax on high cost insurance plans that is designed to reign in out of control health costs.  Thats really fair right?  I'm sure the tax on the rest of us will be enough to "bend the cost curve."

But that isn't even union members biggest benefit from the health care proposal.  Their number one goal is to increase the size of government so that there are more government employees, increasing the numbers in the union, and increasing their power to influence policy, and that is exactly what is happening.  It is simply unsustainable.  Is now at the point were private sector employees are forced to work harder, longer and for more years just so we can afford to pay government employees their full pension (which can be as high as 100% of their final year salary).  And they can retire at age 50.  It's absolutely unbelievable.

So here is the question America: Barack Obama's entire agenda is focused on increasing the size of the government so that it can take care of us "from cradle to grave;" do you want to be a second class citizen to finance the government employees that will implement that agenda?  Some may laugh at such a question, but the prospect of just such an arrangement is becoming more an more real with each passing day.

*note* I used some of the data from an article my old man sent me by Steven Greenhut in the February 2010 Reason Magazine.   This link is here.