Surprise – Government Jobs Growing Much Faster Than Productive Jobs

Posted by Enrique on 12.16.2009

The rich get richer



An underemployed American workforce received some rare encouraging news earlier this month. Employment data from November suggests the nearly two-year long recession may have hit bottom – the unemployment rate dropped to 10.0% and the number of jobs lost was 11,000, much fewer than expected. Although hope can be a dangerous thing, you could be forgiven for thinking the economy might be turning the corner. There's nowhere to go but up.

As you are no doubt aware, the last two years have been dispiriting for all patriotic job-seeking Americans. Many of you reading this have lost a job, taken a pay cut, and/or had your benefits reduced. The current recession has touched nearly everyone – in the private sector. If you're a government employee, you wouldn't know there was a recession unless you read about it on the internet. For our story this week, let's have a look at how public sector employees have gotten richer at the expense of an underemployed American workforce, and pose the vexing question – do public servants just not like America? Or do they hate it?

The story so far…

Last week, USA Today proved again why it's America's newspaper with a chilling report that exposed the obscene level of compensation government workers receive. Your tax dollars are working overtime:

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted. […]

The growth in six-figure salaries has pushed the average federal worker's pay to $71,206, compared with $40,331 in the private sector.

Other than the folks who are paid to defuse IED's, I can't imagine most government workers are providing $70,000 worth of social good annually. Especially since many of them abuse overtime. (In fairness, I have no proof most public servants abuse overtime. Call it a hunch.) To really drive the point home, USA Today provides this helpful graph:


Welfare Queens

While you and me and the other peons are trying to make the most of our $40,000, federal workers are lighting their fireplaces with $100 bills. I imagine if one were to ask President Obama about this naked injustice, he'd blame Bush somehow. And as usual he'd be right. As Reason's Matt Welch points out, Bush was the first president since World War II to preside over a federal workforce that grew at a faster rate than the private workforce. As we now know, the problem with compassionate conservatism is that eventually you run out of other people's money.

One thing Obama couldn't blame Bush for is the $787 billion stimulus passed in February. That would be the stimulus that allegedly saved or created over 650,000 jobs, a figure believed by absolutely no one. Not even Joe Biden. There's no doubt some jobs were saved by the 2009 stimulus. There's also no doubt a lot of people who benefited from stimulus funds were never going to lose their jobs in the first place. If this story from Ohio sounds familiar, it's because many states have used stimulus money this way:

The Obama administration announced Friday that federal stimulus money had created or saved about 7,200 education jobs in Ohio as of Sept. 30.

Although a couple of hundred of those jobs were in Columbus City Schools, the district acknowledged yesterday that many of the "saved" jobs definitely wouldn't have been lost in the first place, and others might not have been lost at all. [...]

Federal Education Secretary Arne Duncan said in a conference call with reporters yesterday that the country has "325,000 who would literally not be in the classroom today if not for these funds." But not in Columbus, where the district's finances looked pretty solid before the stimulus. Voters passed a levy last November that should keep the district's books largely in the black until 2012.

Of the 212.5 full-time equivalent jobs the district said were funded with part of the $64 million in stimulus it expects to receive, about 65 percent were "saved," including 36 principals and assistant principals.

So was the district on the verge of laying off 36 school administrators?

"No," [the director of federal programs for Columbus schools] said, explaining that the reporting choices were "created" and "saved."

"They weren't 'created,' obviously, so our only other choice was 'saved.'"

I don't mean to appear ignorant, but based on what I've observed during the course of my relatively short life, it seems to me no one is better protected than public school workers. As the Dispatch notes, voters recently passed a levy to ensure those public school workers wouldn't lose their jobs. This happens every year all over the country. Local school districts always ask for more money, and voters are typically very generous, because the idea of cutting education spending just rubs people the wrong way. Sometimes conservative voters will defeat these kinds of referenda, but even so, the trend of education spending always goes in a positive direction.

The idea that there would have been some kind of mass layoff of public school teachers without the stimulus is unadulterated 24-karat bullshit. In many school districts, it's essentially impossible to fire teachers even for gross incompetence. In New York City, teachers who have been accused of malfeasance including sexual harassment of students get paid to sit around and do nothing. It is simply not plausible that 325,000 educators would have lost their jobs if not for the stimulus.

In fairness, it's possible some public servants would have been laid off without the stimulus (in the sense that it's possible I will be struck by lightning several times before this afternoon). My hometown Milwaukee Journal Sentinel reported that our local school district claimed almost 1,000 jobs were saved by stimulus money. Like the Ohio situation, it's unclear if those jobs were ever in jeopardy to begin with, although the local bureaucrat assured the general public the situation was probably dire:

Without the boost in funding, MPS [Milwaukee Public Schools] would have faced a budget shortfall, but it's unlikely to have been resolved exclusively through staff layoffs, MPS finance director Ron Vavrik said.

"We would have had to make severe cuts both in personnel and programs," he said. "No matter what would happen, there is no way we could have avoided cutting positions. It might have been more; it might have been less."

It might have been a lot less. Maybe if public school teachers and administrators were paid at the same rate as similarly-qualified FTEs in the private sector, there wouldn't be a need for hollow threats of layoffs. What would be so bad about public servants being compensated at the same level as the rest of us? In the private sector, employment only exists as long as something of value is being created. Unless a business is providing a product or service people are willing to pay for, they can't create new jobs.

In the public sector, jobs can be created on a whim since governments obtain their revenue by force. You can choose to shop at Whole Foods or boycott Walmart. You can't choose to not pay taxes. The public sector essentially steals money from the private sector to overpay its workers to the tune of $70,000 at the federal level, and we're the assholes for preferring spending cuts to tax hikes? Man, what a world.

At the same time, I can't judge public sector employees too harshly. We're all motivated by self-interest, and if I found myself in the position to take a cushy government job, I'd be a fool not to accept it. My criticism isn't of individual public servants, whom I assume are mostly decent, well-intentioned people. My complaint is with a system that privileges the least productive sector of the economy at the expense of the most productive. Next time your local candidate for elective office portrays budget cuts as catastrophic measures that could result in social upheaval, I would argue that asking public servants to be compensated differently isn't outside the realm of polite…holy shit, they want us to subsidize their healthcare when they're retired, too?

The Milwaukee School Board has spent 20 years ignoring a "fiscal time bomb" in the form of generous and unfunded health insurance benefits for retired MPS teachers and staff that will cost the district $5 billion by 2016, according to a new report by the Wisconsin Policy Research Institute. […]

Last year, the Wisconsin Policy Research Institute identified similar unfunded liabilities in a variety of Wisconsin's large government employers. That report said that MPS would be on the hook for paying $2.2 billion for the future retirement benefits of employees - not including pensions - and that if it were setting aside the full amount needed to pay that each year, the figure would total more than $2,100 per student.

On second thought, I think I can judge public sector employees too harshly.