Posts Tagged ‘government workers’

By DAVID EINHORN, NY Times, May 26, 2010

Are you worried that we are passing our debt on to future generations? Well, you need not worry.

Before this recession it appeared that absent action, the government’s long-term commitments would become a problem in a few decades. I believe the government response to the recession has created budgetary stress sufficient to bring about the crisis much sooner. Our generation — not our grandchildren’s — will have to deal with the consequences.

According to the Bank for International Settlements, the United States’ structural deficit — the amount of our deficit adjusted for the economic cycle — has increased from 3.1 percent of gross domestic product in 2007 to 9.2 percent in 2010. This does not take into account the very large liabilities the government has taken on by socializing losses in the housing market. We have not seen the bills for bailing out Fannie Mae and Freddie Mac and even more so the Federal Housing Administration, which is issuing government-guaranteed loans to non-creditworthy borrowers on terms easier than anything offered during the housing bubble. Government accounting is done on a cash basis, so promises to pay in the future — whether Social Security benefits or loan guarantees — do not count in the budget until the money goes out the door.

–SNIP– Public sector jobs used to offer greater job security but lower pay. Not anymore. In 2008, according to the Cato Institute, the average federal civilian salary with benefits was $119,982, compared with $59,909 for the average private sector worker; the disparity has grown enormously over the last decade.

The question we need to ask is this: If we don’t change direction, how long can we travel down this path without having a crisis? The answer lies in two critical issues. First, how long will the capital markets continue to finance government borrowings that may be refinanced but never repaid on reasonable terms? And second, to what extent can obligations that are not financed through traditional fiscal means be satisfied through central bank monetization of debts — that is, by the printing of money.

Read more at http://www.nytimes.com/2010/05/27/opinion/27einhorn.html

By David Lightman, McClatchy Newspapers, May 3, 2010

WASHINGTON - Facing election-year pressure to keep a lid on their salaries, lawmakers in Congress have agreed quietly not to increase their pay next year.

As a result, most members of Congress next year will receive $174,000 in 2011 under legislation awaiting President Barack Obama’s signature, the same amount they’re getting this year.

Under the law that governs congressional pay, senators and representatives were due to get an automatic cost of living increase on January 1, probably an extra $1,600 or 0.9 percent, unless they voted beforehand to turn it down.

Last week, they did just that. The Senate rejected the increase in a voice vote, and the House of Representatives concurred, 402 to 15. Even the small increase would have been hard to explain in the months before November’s elections.

Read more at http://www.mcclatchydc.com/2010/05/03/93358/congress-where-44-percent-are.html

Its a start!

by Publius, biggovernment.com, April 22, 2010

This is what the welfare state looks like. The formerly great state of Illinois, having thoroughly run its budget into the ground, is considering digging an even deeper hole by raising taxes. Exactly the shot in the arm the economy needs!

Of course, public sector unions are in full-throttle support of the tax grab. (No recession for those that live off taxpayers.) On Wednesday, a phalanx of public sector employees, including SEIU, Illinois Education Association, Illinois Federation of Teachers, AFSCME, and AFL-CIO, rallied in support of the tax hike in the capital, Springfield.

This public school teacher, who was likely given the day off to attend the rally, left no doubt about her reasons for supporting the tax hike.

Yes, this woman is responsible for educating some number of your children. Her chant goes to the heart of what’s wrong with our public school system…it is designed for the adults in the system, i.e. teachers and not the children.

The task at hand is even bigger than we feared.

Read more  at  http://biggovernment.com/publius/2010/04/22/chicago-teacher-on-tax-hike-give-up-the-bucks/

This is only happening in Illinois, right? At least the sentiment is Hidden here in Wisconsin, which is better, right?

Thousands of protesters at Illinois Capitol to press for tax increase

Posted by Michelle Manchir and Ray Long, newsblogs.chicagotribune.com, April 21, 2010

SPRINGFIELD — Thousands of protesters bused down by labor unions and social service advocates rallied at the Capitol today in an attempt to pressure state lawmakers into raising the income tax to avoid more budget cuts.

A spokesman for Illinois Secretary of State Jesse White estimated the rally crowd at 15,000, with more than 12,000 marching around the building. That would appear to make it the largest Capitol protest since the Equal Rights Amendment crowds a quarter-century ago.

Bus after bus pulled up on streets surrounding the Capitol complex and dumped sign-waving protesters clad in purple, green, red and blue shirts that represented a show of strength from a variety of public employee unions and dozens of groups that formed what they named the “Responsible Budget Coalition.” (You can see a photo gallery by clicking here.)

“Raise my taxes! Raise my taxes! Raise my taxes!” they chanted, lined up shoulder to shoulder for a few hundred yards stretching a street in front of the Capitol.

“These 177 people who have a job don’t want to do their job,” said Henry Bayer, head of the Illinois chapter of the American Federation of State, County and Municipal Employees, referring to the number of lawmakers in the House and Senate. “Yes people are hurting, that’s why we need a tax increase….If you try to leave town without doing your job we’re going to chase you.”

Read more at  http://newsblogs.chicagotribune.com/clout_st/2010/04/thousands-of-protesters-at-illinois-capitol-to-press-for-tax-increase.html

By ALEX J. POLLOCK, Wall Street Journal, April 7, 2010

Government employees on average have higher pay and bigger benefits than the private-sector employees who support them with taxes. This has become a well known fact.

When private firms run extended losses-spending more money than they take in-their employees must share in the necessary adjustments. But how about when governments spend much more than they take in, running huge and extended deficits? What should happen then? This is something Americans who work in private companies might consider while they file their tax returns over the next week.

Ireland shows the way.

Having had a long run of high growth and success, Ireland has now had a severe bust, the deflation of a housing bubble, and a financial crisis. Plus, its government is running big deficits. Sound familiar?

In response, the current Irish government budget takes these steps (translating from euros to dollars and rounding):

Read more at  http://online.wsj.com/article/SB10001424052702304017404575166201937283866.html?mod=WSJ_Opinion_LEFTTopOpinion

By ERIKA LOVLEY, politico.com, 3/26/2010

Nearly 2,000 House of Representatives staffers pulled down six-figure salaries in 2009, including 43 staffers who earned the maximum $172,500 — or more than three times the median U.S. household income.

Starting salaries on Capitol Hill are still low — many entry-level congressional jobs pay less than $30,000 a year. And many of the most highly paid staffers could make several times the maximum by jumping to lobbying and consulting jobs in the private sector.

But the salary data, compiled for POLITICO by LegiStorm.com, show that it’s possible to make an enviable living in Congress, even without winning an election.

The 43 staffers who maxed out at $172,500 — the salary cap for leadership and committee staffers — include John Lawrence, chief of staff to House Speaker Nancy Pelosi; Paula Nowakowski, the late chief of staff to House Minority Leader John Boehner; and House Parliamentarian John Sullivan. They earned only slightly less than rank-and-file members of Congress, who make $174,000.

Read more at http://www.politico.com/news/stories/0310/35050.html

By JONATHAN R. LAING, Barron’s, March 15, 2010

Promised pensions benefits for public-sector employees represent a massive overhang that threatens the financial future of many cities and states.

LIKE A CALIFORNIA WILDFIRE, populist rage burns over bloated executive compensation and unrepentant avarice on Wall Street.

Deserving as these targets may or may not be, most Americans have ignored at their own peril a far bigger pocket of privilege — the lush pensions that the 23 million active and retired state and local public employees, from cops and garbage collectors to city managers and teachers, have wangled from taxpayers.

Some 80% of these public employees are beneficiaries of defined-benefit plans under which monthly pension payments are guaranteed, no matter how stocks and other volatile assets backing the retirement plans perform. In contrast, most of the taxpayers footing the bill for these public-employee benefits (participants’ contributions to these plans are typically modest) have been pushed by their employers into far less munificent defined-contribution plans and suffered the additional indignity of seeing their 401(k) accounts shrivel in the recent bear market in stocks.

And defined-contribution plans, unlike public pensions, have no protection against inflation. It’s just too bad: Maybe some seniors will have to switch from filet mignon to dog food.

Most public employees, if they hang around to retirement, can count on pensions equal to 75% to 90% of their pay in their highest-earning years. And many public employees earn even more in retirement than their best year’s base compensation as a result of “spiking” their last year’s income by working ferocious amounts of overtime and rolling in years of unused sick and vacation days into their final-year pay computation.

Read more at http://online.barrons.com/article/SB126843815871861303.html

By Dennis Cauchon, USA TODAY, March 4, 2010

Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

CHART: Federal salaries compared to private-sector

These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.

Read more at  http://www.usatoday.com/news/nation/2010-03-04-federal-pay_N.htm

by Mark J. Perry, Tuesday, February 9, 2010

Note: This post was inspired by Michael Jahr’s post on the Mackinac Center’s website, “Economy Contracts, Government Expands.”

According to a December report from the BLS, state and local government employers spent an average of $39.83 per hour worked ($26.24 for wages and $13.60 for benefits) for total employee compensation in September 2009. Total employer compensation costs for private industry workers averaged $27.49 per hour ($19.45 for wages and $8.05 for benefits), see chart above. In other words, government employees make 45% more on average than private sector employees.

According to another BLS report, compensation for private industry workers has increased by 6.9% between December 2006 and December 2009, compared to a 9.8% increase for government workers (state and local) over the same period.

Read more at  http://mjperry.blogspot.com/2010/02/two-americas-public-sector-vs-private.html