Forbes: America is More and More Becoming Two Nations

The problem with this picture is not Glenn Goss. By all accounts he was a good cop. The problem is that there are millions of Glenn Gosses from Highland Beach to Honolulu. So many that they pose a vast, debilitating burden to state and local finances.

They’re creating a nasty social problem as well. America, in case you hadn’t noticed, is dividing into two nations. The 22.5-million-strong public sector (that includes retirees) is growing ever larger, and enjoying ever greater wages and benefits often guaranteed by state constitutions.

In private-sector America your job, assuming you still have one, hangs on the fate of the economy. If your employer ever offered a pension for life, like young officer Goss is receiving, odds are it has stopped doing so, or soon will. Those retirement accounts you scrimped and saved to assemble? Unless they are invested in Treasurys, they aren’t doing too well. In private-sector America the math leads to the grim prospect of working longer and living poorer.

In public-sector America things just get better and better. The common presumption is that public servants forgo high wages in exchange for safe jobs and benefits. The reality is they get all three. State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector’s $19, according to Bureau of Labor Statistics data. Throw in pensions and other benefits and the gap widens to 42%.

Read it all.

print

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Economy, Labor/Labor Unions/Labor Market, Politics in General

13 comments on “Forbes: America is More and More Becoming Two Nations

  1. Irenaeus says:

    [i] State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector’s $19 [/i]

    It would be interesting to see what kinds of jobs are being compared here.

  2. Albany+ says:

    And of course, the assumption is that government employment ought to mimic private sector employment rather than the other way around. No, the answer is for more wage equity and less compensation on the high end in the private sector.

    Where did that first 350 billion go? I think these diatribes against the public sector come from those asked to give up their spa trips or corporate jets due to the bailout.

  3. Br. Michael says:

    Plus there is the risk of being fired as your political bosses come and go.

  4. sophy0075 says:

    Br Michael,

    Only those in the Senior Executive Service (typically, heads or deputy heads of agencies) bear the risk of firing. For the rest of government workers, employment is a sinecure, whether they work hard or not.
    Ask, for example, any public school principal if (s)he can fire a bad teacher. The answer is “no” – all the principal can do (thanks to the teacher’s union) is have the teacher transferred to a different school.

  5. Br. Michael says:

    And lawyers and other designated select exempt (at will). I know I was a lawyer for the state of Florida. So its not only for senior management.

  6. Akinola Robinson says:

    As an employee of the State of Florida, thanks for the above comments. I though the article focused too much on some unrepresentative retired police officers. State employees in Florida got a one-time $1,000 bonus -no raise – two years ago. They will not get any salary increase for the current fiscal year or the upcoming one. My co-workers work pretty hard and try to do a good job serving the public.

  7. RickW says:

    This is a huge issue relating to the viability of many city and state governments.

    In the private sector (manufacturing), we are taking 10-20% pay cuts (more if you count bonuses which haven’t come in two years and won’t come for another two). My company has hit salaried employees with 10% reduction of our base salary. Prices have dropped and profit margins are gone.

    If a school district is short of funds, it will lay off teachers and cut services. When the taxpayers are making less – can they take a 15% cut and keep people in their jobs? Why not? Can government administrators take 15% pay cuts and not lay off people? Why not?

    Since 1990, one of the fastest gowing segments of the economy has been state and local governmetns. Soon, they will be all that is left. Forget about stimulus, we are on the brink of having nothing to stimulate with.

    The strong unions in the private sector, I imagine will fight against this, but when we see municipal governments file for bankruptcy by the boat load, with no manufacturing base to cover the tax liability, none of are going to be happy.

    We are going to need to take on the hard medicine that we imposed on developing countries through the IMF rules in order to get our economy back in order. It is going to be painful for all of us.

    What about Clergy? In Ohio TEC had manadatory clergy salary guidlines which put some small churches out of business. Are more and more churches going to struggle to pay their clergy the union scale?

    Back to the article, I don’t fault the cop for getting what he can get. The system which allows that kind of double dipping is broken.

  8. jkc1945 says:

    Sophy, a poor teacher can be fired, at any time, for just cause. All that the principal / superintendent must do is document the teacher’s malpractice / malfeasance, document the series of reprimands that are generally required (in the private sector, as well) and then they can fire away, and make it stick. My wife has done it often; the key is documentation, which is something the average administrator is not too good at, sometimes.

  9. Sick & Tired of Nuance says:

    Just for clarity, that is annually $39,520 on average for the private sector and annually $52,624 on average for the public sector.

    What are the jobs and what are the educational requirements?

    I know for a fact that when I worked for the DoD as a wage grade technician, we were earning 17% less than the local prevailing wage for the same type of job. They even passed a law, I think in 1994, to close the gap in our pay and catch up by 10% of the difference per year until we would get paid what we were already supposed to be getting paid by law. We got that 10% of the difference exactly once. Every year after that, the President or congress would make a declaration that there was an emergency or something and we would not get the catch-up pay. The per diem for our locality was greater than our actual pay by several percent. We would have made more money by not being paid a salary and only being given per diem!

    Understand, by statute, we were supposed to be getting the same as the local prevailing wage for our type of work (aviation) and we were not. A second law was passed to correct the problem over a 10 year period (after being already having been underpaid for 20 years). That second law was only allowed to work for 1/10th of the difference for one single year, and then it was effectively ignored.

    So, I would like to know what jobs they are talking about.

  10. Sick & Tired of Nuance says:

    Spoo…

    “(after being already having been underpaid for 20 years)”
    should read
    (after already having been underpaid for 20 years)

  11. Chris says:

    these public pension benefits are headed the same way of SS and Medicare benefits – down, lest they utterly destroy our already fragile economy. The idea that public wages should be higher than private is laughable given the far greater job security of the former.

    I think Schwarzenegger could pass that 401K bill right now, I believe the ground has shifted that dramatically since 2006. And widows should get benefits for line of duty fatalities (and injuries), but greater pension benefits because you could get injured or killed? Why not the same for a coal worker or convenience store or farmer (the most dangerous I think) employee, those are also fraught with peril jobs. The answer of course is that none of these groups have effective unions that coerce our elected officials into giving them that which they don’t deserve.

    #6, on what basis is the officer unrepresentative? And even if he is (which I would dispute), I would still think something should be done about a system that starts paying out pension benefits anyone TWENTY THREE YEARS SHORT OF RETIREMENT AGE.

  12. Alice Linsley says:

    “Two nations” matters very little when we have only one political party.

  13. Cennydd says:

    RickW, you spoke of “double dipping.” I’m one of those double dippers, but you know how I became a double dipper? Here’s how: I retired from the Air Force after fifteen years of active duty, and it was an involuntary retirement; I was injured, and the Air Force determined that it was in line of duty, and as a result of that injury, I developed cancer in my left leg. The Air Force doctors cured the cancer, but several years later, the VA doctors told me that I would lose that leg. The result was that my leg was amputated all the way to the hip socket, and I use a wheelchair. I am rated at 100% disabled as a result of that, and since I paid into Social Security for all of my working life until I retired, I receive both my VA Disability Compensation and Social Security. That is honest double dipping.