One might ask: Who is serving whom?

August 15, 2013

Last year I came across an article about a survey that found the happiest workers in America are government employees.
Turns out they have a reason to be. Federal government employees have an average annual benefit package ($42,462) that is worth more than the average annual wages of Wells County workers in the private sector ($32,686). Those numbers are for 2010 from the Bureau of Labor Statistics.
Reading that motivated me to see if those trends continued on the state and local level. They did.
This was in April, 2012: Average wages for Indiana state government employees were higher than the average Hoosier working in the private sector. State benefits also outpaced private sector benefits.
It was a little harder to get firm data on local averages, but inquiries to county auditor Beth Davis revealed that the average county employee earns $34,529 and city clerk-treasurer Tami Runyon determined the average city salary at $36,192. (Compared, again to the $32,686 cited above for private-sector employees in the county.)
Those numbers are a year old, but there is no reason to suspect that they have changed significantly.
If you type “government wages vs. private sector” into an Internet search engine, you will get 44.8 million listings to peruse. A pretty thorough sampling of the first two pages brought a common theme: there is no doubt there is a difference — government workers have a better deal.
The Congressional Budget Office has done what appeared to be the most complete study of those I examined. They found that government workers tend to be older and better educated, but even when they broke workers into more specific categories, the findings did not change.
Workers with “no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector,” the study reported. As the education levels increased, the difference becomes smaller so that the highest-educated workers — “professional degrees and doctorate” — are compensated less in government than in the private sector. But that’s the only group.
The study also found an even greater disparity in benefits. “Defined benefit” pension plans are a rarity in the private sector. The Bureau of Labor Statistics says only 20 percent of private sector employees enjoy that benefit while 79 percent of government workers do. And not only do government workers outpace their private-sector counterparts in the quality and cost of health insurance, but many government workers also enjoy that benefit into retirement, a benefit practically unheard of any more in the private sector.
One of the major points that former Indiana Gov. Mitch Daniels made in his book “Keeping the Republic” was that it used to be that the government served the people; that it was generally accepted that government workers earned a little below average because they were, indeed, “public servants.” Daniels argues that the opposite is now true: the people are serving the government.
Peggy Noonan, President Ronald Reagan’s chief speech writer and now a weekly columnist in the Wall Street Journal, wrote just last week:
The deal years ago, and everyone knew it, was this: If you work for the government you may be paid less competitive wages than the general marketplace offers, and your workplace would likely not be as dynamic and afford as much advancement as the private sector. But in return for these agreed-upon limits you got one important advantage: security.
A government job was a comparatively safe job. And that was worth a lot, especially when you saw your neighbors get laid off in various cycles and contractions.
Now that original agreement has been turned on its head. Government workers are relatively well paid. They have benefit packages and pension plans that are the envy of their neighbors. As for job security, they are so secure they pretty much can’t be fired — witness Lois Lerner, who took the Fifth in the IRS scandal, who appears in fact to be at the center of that scandal, and who apparently refused to resign and is still on paid leave.
The issue has been raised anew in the wake of the bankruptcy filing of Detroit — that unless other governmental units are not careful, overly-generous wages and benefits promised to government workers will put them in the same boat.
While Noonan’s remarks were aimed primarily at federal employees and not at elected officials, this is good background as the Wells County Council (and the city as well) considers the 2014 budget and what wage increases might be considered.
Government workers need to be treated fairly. But so do the taxpayers who fund it all. And taxpaying private employers should not find it difficult to compete with local government positions which their taxes fund.
As Noonan concluded in her column: That’s not the way it was supposed to work.

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