Recently at Reason.tv: 3 Reasons Why Public Sector Employees Are Killing The Economy

As unemployment stubbornly sticks near 10 percent and any sort of economic recovery seems a long way off, think about this: The one part of the economy that's going gangbusters is government work.

Indeed, since the Great Recession started in December 2007, over 8 million jobs have been lost in the private sector while the public sector has added at least 100,000 positions. It's time to recognize that public-sector employment is killing the economy for at least three reasons:

1. They cost too much. As USA Today recently noted, federal employees make on average almost $8,000 more than their private-sector counterparts. When you add in benefits, the gap spreads to about $30,000. State and local government workers make around the same as private-sector counterparts, but their health and retirement packages mean they make significantly more in the end.

2. We can't fire them. The private sector has shed positions in response to slackening demand and the economic downturn. That sort of adjustment is painful but necessary, as it allows the economy to adjust to changing circumstances and workers and employers to move into new activities. Because it is guaranteed certain amounts of tax revenue and has a non-market mind-set, the public sector is largely insulated from such forces and keeps or even adds workers despite changed conditions. The result? We keep paying for things that we don't use, need, or want.

3. They create a permanent lobby for expanded government and higher taxes. Look at California, where teacher unions have spent over $211 million dollars on elections in the past decade. One result is that 40 percent of California's budget must be spent on education, regardless of the number and needs of students. Over the last 10 years, taxpayer contributions to public-sector pension funds has increased by 2000 percent! Such sort of tax-based gladhanding is just getting started. For the first time in history, the number of public-sector union employees is greater than those in the private sector, so expect to see even more lobbying for the sorts of mandatory raises and permanent job security that most of us can only dream of.

Because the public sector gets its pay and benefits from tax dollars and public debt, every thing it gets means there's less for the rest of us to save, invest, or pay workers with. With the federal government and most states already neck-deep in red ink, it's time to cut public-sector pay and payrolls and return more money to the private sector. That will help spur the sort of investment and innovation that will get the economy moving and end the recession far faster than paying more and more money to government workers.

"3 Reasons Public-Sector Employees Are Killing The Economy" is produced by Meredith Bragg and Nick Gillespie, who also hosts. Approximately 3 minutes. Go to Reason.tv for iPod, HD, and audio versions.

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For more on the discrepancy between public sector and private sector compensation, go here.

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  • lasehen||

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  • Suki||

    Good Morning reason!

  • rctl||

    bonjour!

  • Suki||

    Hi rctl!

  • ed||

    I've always wanted to be a bedpan technician. Now's my chance. Thanks, lasehen!

  • Eric||

    The Teacher's union is the worst of the lot. Instead of framing the issue as "Taxpayers Vs teachers" We need to start framing it as "Union vs. Students"

    If the unions disbanded, the cost of education wouldn't go down that much, but the quality would go way up.

  • Jeffersonian||

    As someone that has been married to a teacher for nearly two decades, I can safely say that the teachers I've met (and we're in an upscale, "progressive" district) are easily the most ill-educated and ignorant professional class I've ever encountered.

  • ||

    You've never met any journalists, I take it.

  • Reason staff||

    Don't pick on us. Wese goodish spellears. We realy greatishing a cutten and pastaring the stoories.

  • Paul||

    My sanitation workers are about to strike against me. The median salary for those workers is $71,000 a year.

    Think about that, the people striking against me make more than I do. Way more.

  • ||

    Waste Management is a private company (NYSE-WM) which actually has competition (Republic Services, Inc. as well as a plethora of local landfills) so those salaries aren't, technically, the g'ment's fault. You're just upset you made a poor career choice...

    Why do you hate the Teamsters?

  • The Libertarian Guy||

    Teamsters striking because they only average $71K a year... and you're wondering why anyone would complain?

  • ||

    Hey, I'm with you, I despise everyone who drives a nicer car than my '87 Toyota pickup, but that's purely sour grapes and self pity on my part, and I admit it.

    To argue that WM employees shouldn't earn an average of $71K (or more) a year requires a mechanism, such as government intervention or a monoply. Otherwise we're just looking at refuse engineers and saying "Yeah, sorry, I've decided your labors aren't worth that."

    It appears to me that the market can bear their $71K salaries. WM is hiring scabs in case of a strike, so if you want to make the big bucks, send 'em your resume.

  • ||

    If these workers are private, then I can't fault them necessarily (and my apartment complex had better handle the garbage so that I don't see it, because that's what I pay them for). But if WM hires scabs, and the union has no government leverage, can't WM just break their back easily?

  • ||

    Unless the g'ment gets involved, yep, as soon as they head for the picket line they need to internalize they may not have a job to go back to.

    You pays yer money and you takes yer chances...

  • Some Guy||

    I can't fault them for saying, "I refuse to work for $X, I want more" no matter what X is. It's their choice. But I can sure as hell fault them for the implied, "And if my coworkers try to work for $X, I'm going to threaten them with violence."

  • sage||

    I don't know how competitive that market is. The Seattle area is notorious for favoritism, and I would imagine that WM lobbied for long term exclusive trash hauling rights despite what their workers' union does.

    Paul and Epi, do you guys both live in apartments? Have you found out if your landlords can shop elsewhere?

  • ||

    I live in apartment, and we're going to see if my apartment managers are beholden to Waste Management. Because if I see any pain from this, they are going to see pain.

  • sage||

    If by "pain" you mean "dirty diapers on their car windshields," then I salute you sir.

  • Suki||

    Paul,

    Show us on the softball bat what part the union guys touched you with.

  • Fatty Bolger||

    Nice

  • Hyperbole||

    I'm back

  • Paul||

    You sure are.

  • ||

    I thought you and Health Care Reform were in Vegas to blow the kid's inheritance. Back already?

  • Paul||

    Pushing those wheelchairs and trotting all those kids out on stage during the healthcare debate took a lot out of Hyperbole. Hyperbole needs a vacation to blow off steam.

  • Scotch Hamilton||

    So the economy would be better off if even fewer people were employed?

    Makes sense.

  • Incredulous||

    Really?

  • Jordan||

    When those people produce nothing of value, and instead siphon actual wealth from the economy, then yes. Feel free to go employ these people to dig ditches and fill them back in. Then let me know whether or not you're better off.

  • Jordan||

    Alternatively, just read a damn book. The Broken Windows Fallacy is not a new concept.

  • ||

    Scotch Hamilton|4.1.10 @ 2:10PM|#
    "So the economy would be better off if even fewer people were employed?
    Makes sense."

    Were you born an ignoramus, or did it take long years of study for you to reach that level?

  • The Libertarian Guy||

    Scotch, tell us how hiring more government paper-pushers helps the economy.

    We're waiting.

  • tarran||

    I have an idea: let's hire 45% of the population to dig ditches. We'll hire another 45% to fill them up again.

    The remaining 10% can grow their food and supply them.

    So Scotch, any problems with my full employment scheme

  • ||

    God, you SUCK. You are the gayest troll since gay came to Gaytown.

  • Dan T. ||

    Episiarch, just go put on your ballerina shoes get the rest of the outfit, be who you really are...Dr. Zhivago. Yeah, you suck.

  • ||

    Project muchsky, comrade?

  • ||

    Somebody isn't getting my ATHF references...

  • Art-P.O.G.||

    +1. It was an excellent reference, too.

  • ||

    So the economy would be better off if the government wasn't taking more tax dollars from productive people and flooding the credit markets with more debt even though fewer people were would be employed in non-productive jobs?

    Why, yes, that does make sense.

    Is it just me, or has the preview button gone missing?

  • smartass sob||

    Must be just you - my preview button is here, using Internet Explorer. Try shutting down your browser and then starting it again.

  • Sam Grove||

    Shouldn't that be "HOW Public Sector Employees Are Killing The Economy".

  • ||

    How indeed. The why of it is to remake the economy as a socialist utopia.

  • cynical||

    No, the why is because, like many people, they want to take a lot from society and give back as little as possible. Unlike most people, they've found a way to do this successfully.

  • ABC News||

    We blame the insurance companies.

  • ||

    I miss seein' joe around here.

    I like to think he's off somewhere arguing our case to liberals...

    ...but I think he'd be even more fun in these government employee threads than usual.

    I almost never comment in these threads 'cause I just can't think of anything good to say about government employee unions, so I'm a little worried that maybe I'm not objective.

    Some of you may have heard me say some pretty terrible things about UAW workers, but at least they didn't used to be on the government payroll.

    Please don't misinterpret that as support for UAW employees; I just needed to feel like I was objective again before I denounced public employees as the evil enemies of everything that's good and decent about the American way of life.

    If there were ever a group of people that should be demonized...

    Well, maybe not the fire and police departments. See? I can still be a little objective. ...but the rest of the government employees are the human equivalent of genital warts. How do you get rid of 'em for good?

  • ||

    It is only going to get worse. As money gets tighter, they will have to make cuts. Then the strategy will be for the remaining employees to make citizens' lives as miserable as possible to make people regret making the cuts.

  • ||

    John|4.3.10 @ 10:59PM|#
    "...Then the strategy will be for the remaining employees to make citizens' lives as miserable as possible to make people regret making the cuts."

    I'm not sure it is a conscious strategy, but it is nothing other than the result of a perverse incentive. Either one accomplishes the same; people respond to incentives.

  • ||

    Most public sector employees are ordinary, sane people who are working in their current jobs because they thought it pays well and has good benefits. In some cases they can't work in their occupation without being a public sector employee.

    Very few of them match the caricature you find on this blog, of power-hungry maniacs who relish controlling private sector underlings. Fewer still have horns or tentacles growing out of their noses.

    The true enemies are the public union hierarchy and the politicians who court their votes and campaign contributions.

  • Gertrude Seiu||

    A drone is a drone is a drone.

  • ||

    You are tight they are indeed killing it.

    Lou
    www.anonymous-surfing.us.tc

  • ||

    Tight? Not cool, anon bot. Not cool at all.

  • ||

    Anon-bot seems to have mistakenly posted to the wrong thread -- this belongs to the poetry thread.

  • MNG||

    I don't buy any of this. We hire or fire the guys who can hire or fire public employees periodically (we call them elections). Perhaps we should be hiring people who do more firing, but to argue that this is some unstoppable juggernaut is silly.

    If you read the article you'll also see that there is some question about how comparable the positions are from which the claim that federal employees are better paid than private counterparts. But even if they are, so what? No politician is forced to broker contracts with any employee in some way. Yes, unions vote and vie for goodies, but so does everyone else (private companies often get rent-seeking goodies, contracts or tax breaks, etc., and certainly their employees vote with this in mind).

    I just don't see most of the fuss here...

  • ||

    The problem is not the federal employees. The problem is state and local employees. When you have state and local employees getting 80% or more pay for life after only 30 years service and some of them "retirin" only to rehire back at the same jobs so they get both retirement and ordinary pay, you have a problem. Google state and local pension and you will find about a million stories on the grim financial future facing the states because of pension and pay liability.

    Jesus Christ MNG, when contributions go up 2000 percent in 10 years, it is a problem only the stupid or the dishonest can deny.

  • ||

    John! Glad to see you back! It was suggested that you were AWOL due to a heroin binge involving Peter Frampton and Kenny Loggins.

    I personally think you were pulling a John Edwards with Kerri Howley, but I digress.

    When you have state and local employees getting 80% or more pay for life after only 30 years service and some of them "retirin" only to rehire back at the same jobs so they get both retirement and ordinary pay, you have a problem.

    They simply follow the Federal fiscal model John; remember, states don't have printing presses.

    Yes, unions vote and vie for goodies, but so does everyone else (private companies often get rent-seeking goodies, contracts or tax breaks, etc., and certainly their employees vote with this in mind).

    A tu Quoque MNG? Really?

    Don't you have a neighbor's livestock to covet and murder?

  • ||

    Thanks Groovus. Good to be back. And for the record my heroine binges always involve under age Latin American prostitutes.

  • ||

    So, how are Dario and Juan Paulo? Still chained in your basement?

  • zoltan||

    Oh snap.

  • What a codencehencehence||

    John and Mng on vacation at the same time and came back at the same time! I wonder what that could mean?

  • MNG||

    Look, if you don't like the deals your rep makes with government employees, then fire them and vote for people who make better deals. Yes government employees vote with their paychecks in mind, but this is true of everyone (private employees with government contracts for example). They are just one of many interest groups seeking rent, no big deal imo.

  • ||

    MNG|4.4.10 @ 10:35PM|#
    "Look, if you don't like the deals your rep makes with government employees, then fire them and vote for people who make better deals. Yes government employees vote with their paychecks in mind, but this is true of everyone (private employees with government contracts for example). They are just one of many interest groups seeking rent, no big deal imo."

    And, of course, you ignore that those negotiating on the other side of the table are 'voting' (with our money) on the outcome.

  • Soonerliberty||

    And if you don't like the war they got us into, just fire them. That worked really well. This we just need a better king argument is simply primitive (is that redundant?).

  • ||

    Elections are to choice in the market as monochrome is to 32-bit color. You usually have a choice of two candidates with which to express your views on the thousands of issues the government is involved in. (Another argument for limited govt!) Other than public sector union members, very few voters care what benefit packages public employees are getting. And that's true of all the other rent-seekers you mention too -- very few voters in, say, a mayoral election, are going to be casting their vote based on how big of a tax break Wal-Mart gets to open a store there. So, the result is that all the special interests get taken care of on the issues they each care about, at the expense of the general populace.

    This is a basic public choice problem that a smart Poli Sci guy should easily see makes voting a very different type of decision, with a very different level of responsibility, from buying a Big Mac.

  • MNG||

    well, yeah, but what happens to the usual libertarian mantra about personal responsibility and the duty to inform oneself and such? If voters don't want to get screwed here all they have to do is (gasp) pay attention...

  • Art-P.O.G.||

    Yeah, yeah...somehow we end up with the government we deserve.

  • Soonerliberty||

    You're forgetting the usual conservative and liberal attitude toward voters. "They're too stupid to do things for themselves." So, according to such statist logic, if the people are too stupid and they vote for you, then the chances are this problem can never remedy itself. And, voila, it never does.

    Or you could look at it realistically. People vote for people that give them free shit. It's that self-interest you hate at work.

  • ||

    We hire or fire the guys who can hire or fire public employees periodically (we call them elections)

    This collective "we" isn't the same as an individual "we". I can't hire services from the government, and terminate those services if they're doing a poor job. Nor can I actually influence the outcome of any of those elections, statistically speaking. And, the public employee unions own the politicians, and can and do vote in blocs big enough to ensure the politicians they own remain in power.

    Not that you would see anything problematic about any of this, but this is not the least bit comparable to me having the complete power to hire and fire any and all private sector employees who I currently employ.

  • MNG||

    Prole, this is probably the usual waste of time, but what in the world do you propose as an alternative? Even in Libertopia there will be government employees. Their rate of pay will be set by representatives. The best way of choosing those representatives is majority vote. And yes, yes, you as an individual can complain that you can't hire/fire these people or set their terms. WTF?

  • ||

    MNG|4.4.10 @ 10:40PM|#
    "The best way of choosing those representatives is majority vote. And yes, yes, you as an individual can complain that you can't hire/fire these people or set their terms. WTF?"

    Glad to hear your opinion, but to be honest, it's NWS.

  • Soonerliberty||

    Nope, there would be no gov't officials in a true libertarian society. What need have we of them? The private markets would sort it out better, and if not, then we come right back to the systematic march to tyranny that we're on now.

  • ||

    MNG|4.4.10 @ 7:44AM|#
    "I don't buy any of this. We hire or fire the guys who can hire or fire public employees periodically (we call them elections). Perhaps we should be hiring people who do more firing, but to argue that this is some unstoppable juggernaut is silly."

    Of course you don't; logic isn't one of your skills.
    What's missing here is the simple goad of profit. In any business, managers do their best to see if an employee is producing a profitable outcome.
    Government employment misses that discipline entirely; the only question during negotiations is whether the union thugs can deliver the votes.

  • fortyouncer||

    I think that 2000% increase statistic being thrown around is a bit suspect. I am guessing they are using the amount of the "employer contribution."

    If so the reason it's so high is because there were some years of really low employer contributions, due to the abnormally high stock market bubble earnings. And 10 years ago is purposely being chosen as a year of comparison to create that shocking statistic.

    For example, if instead of comparing taxpayer paid pension costs over 10 years, you chose 11 years, it's only about a 300% increase. If you go back further it might be less (I couldn't find older numbers on teh calpers website). It's still a problem, but it's huge difference.

    The problem with that statistic is that the figure goes up and down depending on calpers investments earnings. So we could just as easily blame calpers investment choices as the true cause.

    I don't know... I haven't looked into it too much. I am no expert on calpers, I just like smoking pot. And when I saw that statistic it reminded me of the drug wariors always buffing up their statistics by chosing the year 1979 to make all drug use comparisons (since that year had abnormally high drug use).

    It's just a way to lie with statistics and I thought I'd point it out.

    Because we could easily say california is now on the right track because the employer contribution (read taxpayer) has decreased by 5% over the past 2 fiscal years. And CA isn't on the right track.

  • ||

    Sirs, if I might have a moment of your time?

    Not all government workers are a pox on the country. I will certainly agree that most are overpaid, underworked drains, to be sure, but not all of them.

    For instance: I work as a forester for a Div. 1 college doing timber harvesting research and handling all of the University's timber sale administration duties. I am a state employee, and I get the state benefits package that you noted makes me more highly paid than a private sector employee who is also a forester.

    But unlike, say a teacher, I have to fund my own position.

    The proposition when I was hired was simple: You make us enough money harvesting timber to pay for your salary and benefits, and you'll always have a job.

    So that's what I do. I am up and in the woods each day at 7AM, and I work non-stop until 5PM. I hike 10 miles per day with a 30 pound pack, marking timber in the Ozarks, and come home sweaty, tired, dirty, bleeding, etc. I really WORK for a living (I produce a valuable good in the timber I help harvest), and honestly, I work just as hard as private sector employees with a similar job (I used to be a private sector employee, so I know this for a fact).

    The research station where I work has a number of employees in the same situation. The men who work the research cattle herd get paid based on the weight gains the cows make while they're on our pastures. The profit the University makes on those cows pays for the workers, equipment, land, etc. It's not some cushy, free ride any of us have got!

    So yeah, maybe I do get a bit more money in terms of my benefit package. Maybe those cow hands make a bit more money than farm hands on other spreads. But to a man, each and every one of us pays for ourselves through the product of our labors, and we don't cost any of you a single, thing dime.

    Being a hardcore Ayn Rand lover, I wouldn't be here if this wasn't the case. I MUST be productive when I'm at work. It's like a mental hangup.

    In light of this little diatribe, I would ask the following of you: Have a member of your staff examine the various government positions which are worthwhile, which do produce, and which shouldn't be viewed in the same light as say a DMV paper shuffler?

    Nothing is all bad, you know? Even government workers. There are a few good ones out there who don't deserve to be labelled as "Economy Killers".

  • sage||

    Nice rant, TheOtherSomeGuy. I'm glad, though, that there's not an arrangement like that with the cops. Or we'd all be getting tickets all the time.

    BUT, not only are you funding your own position, but you, sir, are helping to fight climate change.

  • asdfgh||

    My experiences contracting to both state and federal governments there is little comparison, at least in the western states where I'm located. As assume you're are also located out here since I'm very familiar with your job duties. I don't believe there is a bone to pick with you. We're comparing apples and oranges here. Some western states operate within their budgets, believe it or not. And none can print money, or go endlessly into the hole. There are exceptions of course, we all know who they are.

    Your job actually facilitates much private sector work, having had much of that work personally, it's something worth appreciating.

    Sustainable logging is good business for all. You have an incentive to keep it sustainable to protect your job.

    No complaints here. There's no reason for me to doubt your libertarian credentials. I can't see how the two would be incompatible, I've worked closely with a number of state foresters, and even one USDA FS forester, who were all on the level and kept the private economy's interests a top priority.

    As you know, here, out west state and federal governments own the vast majority of the land and natural resources. Of course it would be preferred that land was privately owned, but that's not relative since we will never see that. So I consider these types of jobs to be a sort of liaison role, and our only route to access our resources, therefore vital.

    As you also must know, some foresters can be power-maniacal asses. It's always better to have some one with common sense in these offices who is willing to battle it out with the other departments and their endless regulations which all must be adhered to.

    I honestly don't think you were who the video makers had in mind.

    Just my opinion for what it's worth.

  • ||

    What fortyoucer said. Many public pension funds are well and truly fucked. However, this statistic is misleading.

  • ||

    There is way too much hate on this thread for Easter Sunday. Jesus wants you to LOVE!

  • ||

    Yes but he died so we could be forgiven for our hate. Why look a gift horse in the mouth?

  • asdfgh||

    Hopefully you're being sarcastic. I fail to see how identifying a serious problem amounts to "hate."

  • CE||

    You left out reason number 4: they do work that people wouldn't voluntarily pay to have done. No one needs a license plate for their car, or a driver's license, or a business permit, and no one needs to be arrested and imprisoned for voluntarily agreeing to buy something from someone else. Even when government workers are good at their jobs, they are counterproductive.

  • CE||

    There is one relatively simple solution to issue number 3: don't let recipients of the "public" treasury vote on where the money goes, directly or indirectly. Seems reasonable enough.

  • CE||

    Read it and weep folks:

    http://www.chp.ca.gov/recruiting/osalary.html

  • fortyouncer||

    But.. but .. it's so much easier to pick on the teachers.

  • JB||

    Government employees = welfare queens (well, actually worse since they take more money than welfare queens)

    Also, government employees = retarded fetuses.

  • sage||

    I would call them, by and large, the entitlement class. Teachers are a classic example. The proper label will help when trying to sway public opinion. Not that I disagree with you.

  • ||

    Dude that is like the coolest thing ever dude, seriously.]]

    Lou
    www.anonymous-surfing.us.tc

  • asdfgh||

    When I went to see what kind of money this area received from the stimulus, recovery dot org was easier to use than dot gov, nonetheless, I wasn't surprised to see all the cash to this area went to public sector employment. It wouldn't be surprising if this was the case in many areas.

    They take care of their own. This I know from having a 39 year old snot nosed leftist baby sister. Both her and her husband are federal employees. As usual they are on vacation, "spring break" they call this one. Meanwhile I'm struggling to get enough contracts to make ends meet.

    It wouldn't be aggravating if she wasn't such a moron. Her and her husband are both complete ignoramuses. Her husband was my employee at one point when they were first married, so I have a clue how little he's worth. Neither has any idea the rest of us are paying them, correction, over-paying them both.

    They're both just lucky the government is there to hire them, I honestly don't believe either one could make it in the real world on their own.

    Can't disagree with any of the three points in this video, they all appear obviously valid. Direct and to the point, this was one of the better recent Reason TV videos.

  • ||

    I stopped by to pick up 3 reasons....

  • ||

    Really a well done video. We have so much bloat in our current legislative system and President Obama is all about adding more. When do we stop this silly short term loan strategy of public jobs and move some help to the private sector to really do some good for our hurting economy.

  • Replica||

    As you know, here, out west state and federal governments own the vast majority of the land and natural resources. Of course it would be preferred that land was privately owned, but that's not relative since we will never see that. So I consider these types of jobs to be a sort of liaison role, and our only route to access our resources, therefore vital.

    www.wholesale-order.com

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