3 Reasons 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.

[freddykrueger]

A pay raise for a public sector worker
is a pay cut for a private sector worker.

[goPistons]

the problem seems to be same everywhere- public sector employees (bureaucrats, politicians, teachers) manipulate laws to grant themselves priviliges, at the expense of the taxpayer. i live in chile and it's exactly what is happening.

[kipter]

Public sector workers shouldn't be allowed to unionize

[joshmaeder]

Bastiat was right. Public sector is the broken window of the broken window fallacy.

[Dpaladinx]

First of all, you really can't get rid of the public sector completely, since there are parts where you need the public (law enforcement and firefighting. Although those are handled in state level). However, you can expand the private sector in some areas such as businesses by lowering deficits. It's all about balance. I believe too much government spending can be as bad as having private sector control everything like law enforcement.

[davidelias]

I once dated a girl, who worked for the VA. Her salary for processing paperwork and checking the paperwork of 3 others was $96, 000. She was in the process of doing a very short computer training session. Once it was completed, she would then enter the results of her team at the end of the day, instead of passing it to an admin. Her raise for this nominal task was $8, 000. It seems odd that the VA always needs money for vets, yet someone could make 6 figures for processing.

[billj]

It’s 10 years later and it’s still true but worse. I know a police Lieutenant that lives in Los Angeles county. His pay and benefits last year were $400, 000. This is one Lieutenant, there are thousands of lieutenants throughout LA city and LA County.

In California our property tax has an increase of 2% a year. This increase was placed into law in 1976 through proposition 13.

Government workers are getting much larger pay and benefit packages beyond 2%. They are constantly attacking proposition 13.

Different counties implement supplemental property taxes, when a new development is built. Those of you in Los Angeles county know them as Mellow Roos.

This is a property tax scam they say the money goes for new schools that’s BS it’s going for salary pension and benefit increases. In my city I’ve had three new fire stations built on the same stretch of road within 3 miles of each other. I’ve seen more fire stations built in the last 10 years than I have seen schools built.

There needs to be another proposition 13 tax revolt that puts a cap on salary and pension of government workers.

Government workers should only be able to earn a 30 year pension if they want to work beyond that it will be for pay and medical benefits only.

[imallpissedoff]

"public sector union employees is a minor part of the problem."
How can that be? New York, California, Wisconsin, all technically bankrupted by public unions. That's what the whole Scott Walker battle was about.

[ThomasE]

It's the rediculous pension entitlements that are killing us.
I spoke with a 15 and 20 year (two public sector jobs) retired public sector employee. He was proud of the fact - at 58 years old - that he was receiving 2 pension checks. I looked at him as someone who is sucking off the breast of the municipality. Oh yeah, he has his massive IRA too. How can we pay people money not to work for 30 years after retirement? I told him that there's a plan to end public sector entitlements, to phase them out. Of course, there's no such thing, but his blood ran cold as I was attempting to convince him of the plan.

[orangedac]

Its all about passing on the bill to suckers down the line.

72% of private sector workers have no pension but are forced to pay for gold plated public sector pensions. Worse yet, if the public sector pension plan makes bad investment bets, govt raids the private worker to pay for those 'shortfalls'.

Its time to call it what it is - a racket.

[ColdHighway]

The public sector should never been unionized. There is no point to it.

[selfishcapitalist]

Even FDR was against public-sector unions.

[ReturnOfTheJ.D.]

Makes sense because the Public Sector employees aren't using their extra money to create jobs as much as private sector people would be. So it's valuable money that could have boosted the economy in the right hands, being given to those who have the lowest chance of doing so.

[SeekingSanctity]

Don't forget that CEO's are heavily protected by government policy too. Any good Libertarian is against them. Most of us are also not out to get union workers. We're out to get the policy makers who give union employees unsustainable promises.

[joshbv]

Public Sector workers are paid too much and get way too many benefits in Canada. It is probably a bigger problem in Canada than in America.

[Pyrrhic.]

The government pays federal workers through taxation. If the government is running huge deficits and needs to cut wages, i think federal workers are fair game. If you do not like your job, quit and go into the private sector. In this economic times, there are plenty of people who would gladly take those federal jobs.

[vinnyfaxx]

Not all public sector employees are useless. A few are competent and actually care about the work they do. In my experience though, at least 50% are completely inept.. Several so much so that your average house plant contributes more to society. At least they give off oxygen...

[ben]

The truth hurts ... the public sector is Bloated with no way for the average taxpayer to limit their taxes. Is this fair?

[libertyfizz]

Now the best and brightest aspire to get a government job. The pay is better, less work, less accountability and much better benefits. I have worked in both. I wasn't politically connected so I ended up in one of those few gov. jobs where you end up doing a heavy lifting. While politically connected cronies sat around in pointless meetings. When I went to the private sector it was a breath of fresh air and I didn't feel like I was the mule until April 15th.

[Megabyxos]

Back in my alma mater state of Nebraska, the state government is required in their constitution to balance the budget. That's right, not a cent of deficit! And while I haven't checked for a while, I know that Omaha for a time had the best employment in the country and has remained close to the top throughout the recession. I wish Oregon, where I currently live, would do the same; Portland has consistently been on the bottom ten for unemployment.