Economics

The Latest on the War Between Public & Private Sectors, or Even Buckeyes Get The Blues When Contemplating Budgetary Red Ink

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When we last checked in with the Buckeye Institute, the excellent Ohio think tank, we called your attention to how state workers in the land of presidents (the last being Warren G. Harding) were raking it in compared to their counterparts in the private sector:

"Ohio," writes Matt Mayer, president of the Buckeye Institute, "is facing an estimated $8 billion deficit for fiscal years 2012-2013. As our State of the State report found, state workers today are paid much more than their private-sector neighbors in 85 out of 88 counties."

How much more? About 34 percent more in total compensation (wages, benefits, retirement). Which is cheap: Similar figures for Michigan found public sector workers pulling about 47 percent more than private sector ones. And federal workers earn about 45 percent more than their private sector analogues in total comp.

Buckeye estimated that bringing public-sector compensation into line with the private sector would save "over $2.1 billion in the next two years, which is nearly 28 percent of the $8 billion budget deficit" currently casting a shadow over LeBron James' former stamping grounds.

Now Buckeye is back with a poll of 1,800 registered voters in Ohio. Among the results:

· 50% think government leaders should first reduce government worker compensation to eliminate the $8 billion budget state deficit;
· Only 16% think taxes should be increased to eliminate the Ohio deficit;
· 52% think Ohio's state and local taxes are too high;
· 56% think Ohio's regulatory environment makes it harder for businesses to create jobs and grow;
· 85% think workers should be free to choose whether to join a labor union to get a job; and
· 67% think we should stick with coal or add nuclear and natural gas energy.

Other than for government workers who think cutting compensation and cutting services are equally appealing, every other demographic group chose cutting government compensation as the top choice to cut the deficit. Except for one group, every demographic group thinks Ohio's taxes are too high by a majority or plurality.

Whole study here.

I don't have a lot of faith in the intelligence of Ohio voters (I speak as one), since they have consistently voted in favor of all sorts of incredibly stupid and self-evident bullshit. The most recent indicator was this spring's 2 to 1 vote in favor of $700 million for a hi-tech bond boondoggle that went by the name of Third Frontier and a legislative vote in favor of restoring money-losing passenger rail service betwixt and between Cincinnati, Columbus, and Cleveland for the first time since about 1950.

However, as the Reason.tv video of a recent protest of municipal salaries gone amok in Bell, California below shows, miracles do happen and if you cannibalize taxpayers long enough, they just might rise up to throw the bums out. Here's hoping that Ohioans find expression in the ballot box of ways to cut the pay of public-sector workers and to bring some sanity to a budget that's out of control. If it can happen in Ohio, the self-declared "Heart of It All," then it can happen anywhere, even a state like yours.

NEXT: The Economic Growth Illusion

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  1. To be fair, every major news station and publication in Ohio reported that Third Frontier was MAKING, nor COSTING vast sums of money for the state. It tough to win against such an orchestrated effort. Of course OSU who holds a lot of sway in the media benefited handsomely from that money. As far as the rail service, I haven’t met anyone outside of government employees who think that is a good idea. Like you I don’t hold out a whole lot of faith either but the economy here is as bad as it’s ever been. Kasich was very popular here at one time when he had a reputation as a deficit hawk. His stint at Lehman will definately be used against him.

    1. Believe it or not, there are people outside of government employees who think the rail is a fantastic idea. Some of them have even fancied themselves as libertarian-leaning (and otherwise actually seem to be). Then they team up with the unabashed state-lovers. It’s very frustrating arguing with that combo.

      1. There’s just something about a train.

  2. And here I thought “the jacket” was just a beltway wonk. I didn’t realize he actually had a place in the land of corn and coal.

  3. With leather all things are possible

  4. And to think they called the men who built our industries ” robber barons”!

  5. If it can happen in Ohio, the self-declared “Heart of It All,” then it can happen anywhere, even a state like yours.

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