How Government Workers Profit at Taxpayer Expense

The purpose of government is to provide services to the public, not enrich the people who work for it.

Stockton, California city workers who attended the unveiling of a new report detailing the trends in public-employee compensation in California on Wednesday night complained about cuts in their compensation packages that are causing hardship for them and their city.

But the report, prepared on behalf of the Howard Jarvis Taxpayers Foundation, and released at a meeting of the San Joaquin County Taxpayers Association, left me searching for the world’s smallest violin—that fictional instrument I like to play whenever my kids or anyone else starts whining about something that’s largely their own fault.

The city of Stockton is bankrupt, following more than a decade of a Bacchanalian feasting on taxpayer dollars, including the creation of a lifetime medical benefit for city employees, and the provision of the most-generous “3 percent at 50” pension system to its highly-paid public safety officials.

The city burned through its pension-obligation bonds—the equivalent of a family taking out a loan to pay the mortgage—and is now trying to stiff its bondholders. There was no obvious complaint by city unions or employees during the tax feast, but now that they are facing “cuts”—some real, but others involving rollbacks in expected raises and limits on special-pay gimmicks -- they and their members are playing the victim.

But the numbers tell the story.

Consider this nugget from the blandly titled, “California State Employee Compensation Trends,” prepared by Steven B. Frates of the Center for Government Analysis: “Total expenditures by the state government of California to finance salaries and pension benefits for state government employees increased almost three times as fast (29 percent) as the per capital personal income (PCPI) of all Californians (9.8 percent) from 2005 to 2010.”

As Frates put it in plain English: “They [public employees] were getting richer three times faster than the general population.”

Californians are stuck watching those dreadful union-financed campaign ads calling for support of Proposition 30, which would push our income-tax rates to the stratosphere and boost sales taxes also. The main reason, we’re told, is that California is slashing public school funding and laying off teachers.

But had the state’s public employees been granted raises and benefit increases merely at the 9.8-percent rate of income growth experienced by the rest of us, the state government would have saved $2.1 billion in 2010 alone—enough to pay for nearly 25,000 new teachers, which is higher than the number that have been laid off. (That’s provided the state government wouldn’t have squandered it on some other program, of course.)

We’ve heard Gov. Jerry Brown and the Democratic majority bemoan the draconian cuts in government. But even in the thick of the financial mess, state government has been hiring. The total number of state government employees increased 5 percent from 2005 to 2010, which is slightly higher than the job-growth percentage in the general population.

State Sen. Mimi Walters (R-Laguna Niguel) kicked off the evening with an under-the-Capitol-dome look at the state’s pension reform efforts. She confirmed what this writer and others have been saying. The governor announced his 12-point pension-reform plan in 2011 but did nothing to promote it. After Republicans offered legislation advancing the Democratic governor’s pension plan, the governor’s fellow party members refused to give it a hearing.

On the last day of session, the Democrats cobbled together something that Walters calls “pension change” rather than “pension reform” given that it does little, mostly applies to future workers, and is not a constitutional change—meaning that future legislators can easily kill these modest changes. It does nothing about the unfunded health-care promises of the sort that sent Stockton into the poorhouse.

The state’s leaders view pension reform as a PR activity to convince the public that they are “doing something” so that voters are more willing to approve yet another tax hike. But the compensation report showcases the reality of the pension problem. Between 2005-2010, the growth in pension expenses soared 45 percent for all categories of state-government employee. The cost of pensions for public-safety workers increased 94 percent. Data for locally employed government employees is no doubt similar to this state data.

The data is two years old, so the situation is no doubt worse, but the California Public Employees' Retirement System likes to stonewall and delay. As the report noted, “CalPERS’ tardiness in posting relevant data in a timely manner is unseemly in an open democratic society.” Everything about this pension mess is unseemly, indeed.

Those of us who oppose tax increases know how the government spends money. This data on pay and pensions for public employees reveals, as Frates said, that the government’s priority has not been providing better services, but in boosting salary and benefits for those who work for government.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • sarcasmic||

    When my work took me into a government building, I noticed that the workers had this odd salutation that involved holding up some number of fingers.

    I later discovered that the number represented how many more years until they collect their pension.

    Milking the system is all they care about.

    Oh, and fristienth!

  • $park¥||

    If it isn't obvious that government workers CAN ONLY profit at taxpayer expense, will two pages of text make it clear?

  • Whiterun Guard||

    So you just want the policemen, the firemen and the public school teachers to just starve?! You monster.

  • mad libertarian guy||

    No. I want them to engage in the private sector and actually add something to the economy.

  • Tall Tom||

    They are over compensated

  • WTF||

    the purpose of government is to provide services to the public, not enrich the people who work for it

    HAAHAHAHAHAHAHAHAHHHAHAAHAHAHAHAHA
    *whew*

    Good one!

  • ||

    It's your own damn fault for continuing to live and pay in that shithole.

  • The Hammer||

    Says the D.C.-ite?

  • Jordan||

    Government is just a make-work program for retards.

  • ||

    as a govt worker myself, i can say - yes, i agree.

    i received a 30% raise ... 30% over a several year period during one of the WORST recessions we have ever seen, and the worst in my lifetime

    30%

    that's insane.

  • Calvin Coolidge||

    Union dues pay for commercials advocating a tax increase

    The tax increase is used to increase compensation for unionized government "workers"

    Unionized government workers raises mean more money sent in as union dues

    More Union dues means more commercials advocating more tax increases.

    And the rest of us all spiral down the drain....

  • Aresen||

    Canada is trying to reform its pensions for Federal Government Employees:

    http://www.ottawacitizen.com/b.....story.html

    Left unmentioned is the fact that the Canadian Federal Government currently has a $200 Billion unfunded Public Service Pension liability.

  • The Hammer||

    "Reform" can mean a lot of things.

  • Drave Robber||

    From my Eastern European experience, most often it means "we'll keep talking about this".

  • Phil_EngAmer||

    It’s really a vicious cycle where terrible contracts based on wildly unrealistic economic assumptions (http://on.wsj.com/qB3BON), lead to unions and politicians asking taxpayers to pay off their debts. It’s all made possible by the deep pockets unions have that they use to influence legislation (http://bit.ly/HcCfwK). Until unions and politicians are held accountable, this will only continue.

  • laser pointer||

    Support for Obama

  • Chuckie||

    I was in Home Depot in Antelope, CA the other day and there was a fire truck, a hook and ladder truck, and an ambulance. There must have been eight or nine firemen there!

    Wondering what all the fuss was, I followed the lawyers (just kidding). It turned out a woman slipped and twisted her ankle. She walked out on her own.

    We are horribly over staffed in fire, and under staffed in police and sheriff.

    Every fire station seems to have a hook and ladder truck, even though the building in it's area are one and two story structures. A million here and a million there, and it begins to add up.

    I'd like to see cuts to fire down to more rational wages, and increases to on the street law enforcement. But they seem to be linked together.

  • dan'o||

    In most states medical 911 calls have both an ambulance and firetruck dispatched to the scene... I guess an average of 7 guys per call even though maybe 1 out of 4 require a transport to hospital (the other 3 we leave where they are after signing a release.) Of those requiring transport very few require more than a 2 man ambulance crew. Major, major overkill and waste

  • C. S. P. Schofield||

    Government takes money from the productive and gives it to the unproductive and the parasitic. Any money that trickles down to the destitute is doubtless an oversight.

  • ||

    I think it depends on which government workers we are talking about. California is rightly notorious for dramatically overpaying their employees. I believe that many government clerical workers at the federal level are overpaid. However, there are some technical occupations (engineers, materials scientists, etc.) for which the federal government pays their employees considerably less than what their counterparts in the private sector receive. A certain agency with a mission related to national security, during a Republican administration, decided to outsource certain technical work to a company, only to find that it was cheaper in-house after the contracts were inked - so we got screwed screwy libertarian style. Hey, nothing beats the lean mean private sector - ever. So, let's not be blindly ideological about this.
    As to hordes of firefighters showing up when a lady trips - you know, in many jurisdictions, firefighters are volunteer - they are not paid. They also have "day jobs" like you and me, and everybody else. They were probably fuming that they got paged at work to join the crew for something that wasn't a real fire emergency.

  • UvalDuvalCuckoo||

    Leland - Well I'm no expert on entire fed govt. compensation, but I know that entire benefits packages are seldom lower than private sector. Without speaking about the exact position it's hard to say. Also, just b/c it was bid out on a bad deal, doesn't mean it's the private sector fault. There are a lot of variables here. I worked for a vendor that had the entire business model predicated upon set aside contracts for the VA. when they lost the status, the company went under. So even though they big the cheapest of the bunch, only other small companies could compete which were all much more expensive than the big provider (and without dry snitching, there was one big vendor for the most part, everyone else was one form of set aside or another) and yes, we provided IT services for the VA. There's so much that can vary that it's hard to comment without going into specifics.

    However as far as the Volunteer thing, Googling it didn't show me any V.F.D. in Antelope, and even when you have volunteer FDs, you don't that I know of have volunteer ambulance programs. Pretty sure I'm on safe ground saying that Volunteers being erroneously called out wasn't what explains what @Chuckie witnessed

  • Coach Panto||

    Uval,
    A 90% pension at age 50 or 55 is so much higher than the private sector that it isnt even worth checking to see that that is dry buggery of the taxpayer on a grand scale. And comparing actual work, public pay is far higher than private pay. There's several reports on the net. Check OC Watchdog: "California’s 500+ cities and counties reported 40,845 workers earning $150,000 or more in total compensation, according to the controller’s figures."

    Do you really think that many workers add that much value to the bureaucratic process?

    California state and city workers by and large enjoy these unearned extortions at the expense of jobs and the economic future of the state.

    I moved out of that miserable state last year to a state with no income tax, and my net gain in spending power went up at least 20%.

    The real wealth creators will eventually leave that corrupted state unless they toss the Dems out. If not, all that will be left are welfare queens and hollywood bungweasels.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement