A Lawrence resident who’d lost his job in the current recession might have been miffed to read about city employees getting a “longevity payment.” And a fan of fiscal responsibility might have felt a flicker of disbelief when he read that this lagniappe was to be paid for by dipping into the city’s savings account. Discussions dwelled on what a good job city employees were doing given the challenges they’ve faced, among which “cuts” and “scrutiny” were mentioned. Perhaps these challenges were deemed more onerous than those which workers in the private sector have endured.
One commissioner gingerly raised the issue of rewards for mere longevity rather than performance. Another allowed that relative to other area cities, Lawrence is “pretty much the most generous of anybody around.” Beyond that, the apparent consensus was that city employees are special and are entitled to benefits that the rest of the nation’s workers don’t enjoy.
If Lawrence were a business operating in hard times, the bonuses would be history. But governments aren’t run like businesses. Different rules apply. This isn’t to single out Lawrence, however. Longevity is the standard by which public service employees everywhere are rewarded. Municipal and state governments nationwide have been making extravagant wage, retirement and health care commitments to their employees. Taxpayers are left holding the bag.
Wages of public servants have outstripped private sector wages in recent years. Public employees earn salaries that are about one-third higher on average than private workers, according to the Wall Street Journal. Benefits are 70 percent higher. In California, public employees can retire at 55 with an effective retirement account worth $1 million, according to Gov. Arnold Schwarzenegger. Over the past decade pension costs for California public employees increased 2,000 percent while revenues only increased 24 percent.
A train wreck is on the way: Government pensions nationwide are underfunded by an estimated $3 trillion. If public employees were paid according to private sector standards, states and municipalities facing bankruptcy would be solvent.
A curmudgeon might be tempted to say that public “servant” has become an oxymoron. The true servants in this equation are the taxpayers. A dangerous conflict looms between two classes — those who work for the government and those who don’t. Public sector workers comprise a powerful lobby with a vested interest in the growth of government and no motivation for controlling costs or pursuing efficiency. If you want an idea of where this ends, consider France, where almost half the country works for government. When their jobs and benefits are threatened, they go on strike and have demonstrated a willingness to bring the country to its knees rather than give an inch.
In our country, reform by political means seems to be impossible. Powerful interest groups are unwilling to give up any advantage for the common good and politicians are unwilling to cross them for fear of losing their votes. Fortunately, reality and market forces eventually intervene. At some point, the money that enables reckless spending simply isn’t there. Bankrupt Greece has recently cut public sector pay and lowered pensions. Latvia has cut public employees’ pay by 50 percent. We may be nearing that point.
President Obama, who’s politically indebted to public service unions, has suggested a pay freeze on federal workers’ wages. A representative of the American Federation of Government Employees called this “a slap at working people.” But an unemployed worker in the private sector might say Obama’s proposal is a good sign, a miracle of sorts, maybe even an occasion for audacious hope.