Public Workers’ Compensation: Fiscal Death by (Millions of) Government Workers
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A Tsunami of Pension Liabilities is Heading Ashore
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The debate over the cost of government workers slogs on and, unsurprisingly, both sides are throwing everything they have into this pitched battle to win.
On April 11, Andrew Biggs and Jason Richwine had a compelling op-ed published in the Wall Street Journal discussing how, via pensions, public employees are overpaid. This prompted a rebuttal from Gerald McEntee, President of the American Federation of State, County and Municipal Employees Union.
Mr. McEntree said that “facts can be very stubborn things” and went on to state that his members working for state and local governments average annual compensation of about $40,000 and yearly pensions of $19,000.
While Mssrs. Biggs and Richwire rebutted such figures as being too low in a follow-up letter on April 25, the larger point is missed.
If taxpayers of each state were only dealing with several dozen, hundred, thousand or even tens of thousand public employees, such per employee compensation would be completely manageable. But the reason that states like Illinois (unfunded pension liability estimated at $126 billion as of 2011), California (unfunded pension liability estimated at $490 billion as of 2011) and my beloved Planet Jersey (unfunded pension liability estimated at $134 billion as of 2011) are sinking under the weight of health-care and pension liabilities is because there are layers upon layers of public workers earning only $40,000 per year and annual pensions of $19,000. Suddenly the per employee figures take on a new magnitude, in the order of the Japan tsunami.
I have passed by various public works projects on the roads and seen situations where one person holds the refuse bag, the other fills it, and the third screws in the light-bulb (to complete the sardonic joke). And one can only imagine the redundancy and over-capacity (excess workers) that exist in the government bureaucracy that is outside of public view. It’s the world’s worst-kept secret that union leadership wants as many people as possible in union membership to keep the dues coffers full. Thus, there are more people on the government payroll than need be, thanks in large part to obliging politicians who receive campaign contributions from the unions, which came from public workers union dues which came, ultimately, from the taxpayer. Wash. Rinse. Repeat.
The standard defense is that all of these workers are needed, if not more. But if so, how about some good old-fashioned overtime that people in the private sector do, without additional compensation? That would cut deeply into any backlog of work as well as pare down the burgeoning public workforce. Yet the thought of such is completely foreign as each day that government workers show up to work, they are setting land-speed records in the parking lot at 4:30:30 or 5:00:30 in order to flee their place of ostensible work. I once showed up at my municipal office to inquire about my real estate tax bill (always fun) and was told that computers shut down at 4:25 in order to close the office at 4:30 (as if the worker’s body parts would fall off if she stayed 5 minutes beyond regular hours).
Mr. McEntree then dryly asserted that his members should get a guarantee for good health and never growing old in exchange for any cuts in health and pension benefits. Having slogged in the private sector for 16 years, it is altogether appropriate to offer the same guarantee we poor schlubs get in the private industry: none. Welcome to Planet Earth…and watch your step.
So just as Mr. McEntree has pointed out that “facts are very stubborn things,” so too are budget deficits. And both must be dealt with.
-I.M. Windee
