Why government workers are fairly paid
 

How many times have you come across a situation in your workplace where it was made abundantly clear to you that the company you work for is not a democracy. Company management pretty much has autocratic rule.

In the public sector, however, the workers are employed by democratic institutions. Some of those on the right see that as a problem, but I see is as an example of how income can be allocated fairly. People like Walker were complaining that some workers were approaching $100k in compensation. They don't take into account, however, that people earning that much generally had multiple degrees. Overall, however, we see people earning a good living wage with a retirement that gives them security in their old age.

What we don't see is the kind of income stratification that exists in the private sector. The highest paid state executive makes a little over $200k. The salary for the POTUS is $400K, something a bank executive would scoff at. (Granted the prez's perks probably push the value of the package up considerably.) The income stratification in the private sector is incredibly higher. In 2004, the average CEO made 400 times what the average production worker made.

One would expect democratic institutions to have a more egalitarian pay structure, and the numbers sure bear it out. How much do you think the the taxpayers would like to pay $8million bonuses? We pay for them at the gas tank, in our credit card fees, with our cell phone, our health insurance, and on and on and on.

You can convince me the the American work force is underpaid, but not that the government workers are overpaid.

Regards,

D-Ray

excellent perspective, thanks

I think the anecdotal stories of NYC (and other big city) cops, fireman, etc. retiring on 100% disability at age 45 and working another job. This certainly happens in Montgomery County, MD.

Perhaps government workers ought mostly be part time or volunteers. I do not think the analogy is valid. I also question the notion that government bureaucracies are inherently more democratic. I tend to think of government as the employer of last resort—an employer that accepts those that can't be competitive in the private sector.

How much do government workers contribute to our GNP?

Do you have data to back that up? I tend to doubt it. There are plenty of intelligent people with a strong sense of service. Think the service academies get the dregs. They produce government workers. Many schools of education are selective in their entrance requirements. There are plenty of wannabe cops working for private security companies, because the standards for getting into the academy are high.

If you want to believe that government services are superfluous, I can see why you would want part time or volunteer workers. I would rather have competent workers who bring credentials and develop experience and expertise in their jobs. Wouldn't you rather have an experienced food inspector, building inspector, fire marshall, law enforcement officer, air traffic controller, and yes, regulator?

BTW, it's not valid to compare people who for wages with people who work for wages?:confused: Or it's not valid to compare the salaries of people whose companies trade in paper with the salaries who run a state-wide or nation-wide (actually world-wide) operation? It's not valid to point out that the compensation in the private sector is extremely top-heavy, particularly compared with the compensation of people who work for us?

Regards,

D-Ray

We already have volunteer firemen. Hey maybe the CEO of Goldman Sachs will return his salary and volunteer his services.

Sorry chum, I know you will deny it until hell freezes over but most businesses here are just mean, cheap bastards. They demand 110% of employees but only want to pay 75%.

Public-sector pay is not set by competitive markets, and because many classes of public workers provide government-monopolized services, it's hard to know what the work of many government employee is really worth. Without benchmarking total compensation against the knowledge skills and abilities of like jobs in the public vs private sector, comparisons are not very meaningful. Also, the ability to trade current total compensation for relative job stability, generally richer benefits, and the ability to retire early with a comparatively generous compensation package creates additional disparity in a comparison of public vs private sector compensation.


Ok, but how do you think a more egalitarian pay structure would fly at the average large or boutique law firm? Not terribly well, I suspect.

I think the topic of compensation is historically far more of a subject of irritation on the left than it is on the right. The left tends to be highly resentful of executive pay, and complain about how the average worker gets screwed. Yet, here's a thread that supports a more egalitarian comp structure, while suggesting that compensation in such programs is more on par with average private sector wages. It strikes me as a bit odd.

The public is focused on compensation of government workers because labor is the number one controllable cost for most organizations, and because state and federal institutions are in a budget crunch. They also question the relative value of the contributions of those gov't workers for the wage dollars spent when compared to their own job and compensation - just as some do as they look around their own workplace on occasion. Frankly, since tax dollars pay wages, don't folks have a logical basis to ask those questions and expect good answers?

Another area of disparity worth exploring is the wages that are spent supporting the inefficiencies in government that we all complain about. Do wage dollars spent in the public sector yield the same value for the dollar that they do in the private sector? I strongly suspect not, and I susect that that value is greater in the private sector, but I'm not aware of any objective data on the topic either.

I reject the proposition that market provides the only appropriate measure of value. I love music and I love sports, but I don't believe that rock stars or sports stars (or movie stars or bank presidents) provide the same intrinsic value to society as teachers, firefighters and cops. How much has Charlie Sheen contributed to our standard of living?

Regards,

D-Ray

Are you serious? How does bookkeeping in the public sector differ from the private sector? A civil engineer working for the government is still a civil engineer. It is not like the public sector is some mysterious cabal.

If Saint Ronnie and the GOP had not set about destroying unions and the middle class benefits in the private sector would be better. If the votors would have not let all the right wing BS convince them the we have a great healthcare system some form of universal healthcare would have been in place years ago, saving companies money and making them more competitive. Why do you think GM builds the big Chev Impalas in Oshawa Ontario? It gives them a competitive advantage of about $1500 per car thanks to Single Payer.

Ah so you admit that their pensions and benefit packages did not come free - they gave way in wage rates, so they did not get summat for nowt.

The market is the most efficient method of determining value. I could hang a $10000 price tag on my 1998 Olds Bravada, but it's not likely that the market would support that price. I could also hold out for a $100000 per year job as a short order cook, but I think I'd be waiting a long time before anyone would hire me.

Now, I can got to work for the gov't and pull down $60000 as an Asst District Attorney. I may find that from time to time I'm opposed by counsel that earns twice or more than my annual wage. Does that make the gov't and their pay scale wrong, or is the free market wrong for allowing the other attorney to make more?

There are many reasons for variable output from jobs at two different employers that may require the same knowledge skills and abilities. This is not uncommon in the private sector, so its not a quantum leap of logic to consider that there may be such differences between public and private sector jobs. While a bookkeeper at employer "A" may have one set of expectations regarding productivity, hours of work, incentive pay, software used, access to resources, etc., employer "B" may have a very different environment that produces different levels of productivity and value of the wage dollars spent.

Perhaps you should volunteer your time? After all you are incompetent and grossly overcompensated, and I personally regard your occupation to be trivial and unnecessary, whatever it is. Am I correct in this assumption?

:rolleyes:
Dave

That is an excellent argument for shutting down Wall Street since they contribute nada, nothing, nowt.:p

Links please? Not all of us complain about inefficiencies in government, that tends to fall into the realm of "They Say":rolleyes:

I'd post links, but I don't want to piss off noone. ;)

I don't think it's the government, per se, but the size of an organization. I think, by definition, the larger the organization, the more inefficient it becomes.

I remember in business school a professor who claimed that any organization with greater than 500 people under one roof can stay very busy (internally) without really processing any input or outputting a product (i.e., people think they're really "busy," while actually just churning from within catering to the internal needs of the organization). While somewhat of an exaggeration, my experience since then have largely upheld the merit of his underlying point.

The bottom line - for any large organization (government, Army, GM, Microsoft, GE, AIG, etc.), certain levels of inefficiency are inherent. Railing against it is quixotic at best, disingenuous at worst.

While I don't disagree with this, the best organizations are those that maximize their efficiencies. To suggest that this is an inherent weakness of large organization is partially true, but to suggest that its a weakness that cannot be addressed is just a disingenuous. This is one of the central lessons of the last 20 - 30 years of international business.

I'm not saying that it cannot be addressed or improved, but yes it is inherent to large organizations, both from within government and from without. When one looks at case studies of outsourcing government functions to the private sector, it often comes up more expensive and with lesser results. Neither government nor the private sector is inherently good or bad. Well managed organizations are more efficient than poorly managed organizations, period.

Living here in DC, I know many people who work for the government and many others who work for IBM, Lockheed Martin, Northrup Grumman, Bechtel, etc. For the most part, there is no material difference with how the government and these big companies are run, in terms of efficiency (or lack thereof). For that matter, many of the top executives/managers in these mega-companies came from the government. From my experience, the real dumbasses around here are with the beltway bandits (consulting services companies) servicing both.

BTW, top quality government managers (of which there are many) invariably get very sizable raises when they go to work in the private sector for these big companies or consultancies.

FWIW, I'd still rather mail a letter for $.44 with the USPS than send a $10 mailing envelope with FedEx.

Mr. Krugman might idealize the Chinese business/government model:

http://www.guardian.co.uk/technology...ted-inhumanely

On the other hand, businesses have a choice of raising prices or increasing efficiencies to keep costs down, or some combination of both, in a competitive market. In the public sector, we can opt to print money, raise taxes or go deeper in debt, but the choice of managing to increase efficiencies and / or do away with redundant services or agencies is almost never considered or acted upon.

It sounded like the company that was enforcing the hellish working conditions. The Chinese government can be faulted for failing to enforce regulations designed to protect workers. That is what the GOP's masters want here. Keep the unions out, do away with the minimum wage and overtime requirements, lobby for more lax safety standards . . . . In other words, what was going on in the link sounds more like a GOP paradise than Krugman's dream.

Regards,

D-Ray

Raising prices to keep costs down? That's a new one on me.

Efficiently managing a particular government agency/enterprise vs. the existence of redundant services/agencies are really two separate issues IMHO. The former is an internal issue (that of agency/enterprise), the latter a political issue. Blaming government workers who work in seemingly redundant agencies is missing the point IMHO (point being that it's Congress' fault, not the agencies or workers therein). Similarly, Congress unnecessarily supported building redundant F-35 engines by private sector firms (Pratt&Whitney, GE/Rolls Royce). How efficient was that?

And if the private sector is so damn efficient, why are all the government subsidies necessary for Big Oil, Big Pharma, Big Ag, etc.? The GOP doesn't seem to be all that hot about shit-canning these unnecessary expenditures, just picking on their latest boogeyman (the public sector worker). It just the latest in a long line (Blacks, Gays, Muslims, Immigrants, etc.) in the GOP politics of resentment. Once they alienate everybody, they'll simply become the party of angry rednecks (see recent post on brainstorm proclamation by a GOP politician from SC).

Lets try it again, this time with punctuation

On the other hand, businesses have a choice of raising prices, or increasing efficiencies to keep costs down, or some combination of both, in a competitive market.

First, I'll defend Whell (as if he were not completely capable of doing so on his own). It seems that the three options he laid out were 1) increasing prices 2) lowering costs by increasing efficiencies, or 3) a combination of 1 and 2. I think you just forgot your smiley, Finn. :p

Next, Finn, your second and third paragraphs are dead on. Therefore, I'll concur in part in your opinion. :cool:

Regards,

D-Ray

This may be making my point. Pratt&Whitney, GE/Rolls Royce don't (or potentially shouldn't) give a crap about the fiscal stability of government as long as the contracts keep coming. If politicians make a political calculation to keep work in their districts, versus cutting jobs which may cut votes, that maximizes political gain but is damned inefficient with the dollars spent on compensation (and taxes). However, left to their own devices, if it were only up to Lockheed Martin to pick the winners and losers in their supply chain based on quality, cost and ability to deliver, it would likely be a non-issue with a single supplier providing the engines.

Politics is about boogeymen Look at your own post: "Big Oil, Big Pharma, Big Ag, etc., party of angry rednecks."

Now, for what its worth, I'm all for cutting all subsidies and tax breaks to business. One central reform that is necessary is reform of our tax policy, which is more about directing behavior than it is funding the essential operations of government.

You mean like the C-17s that the airforce did not want, but Congress authorized anyway? Or the F-35 fighters that we don't need, never mind an extra engine. Or two new aircraft carriers currently under construction that will be obsolete before they even get launched. When it comes to wasting money nobody does it like the Pentagon. And I sure know about those guys, there was a time when my car knew its own way to Fort Monmouth.:rolleyes:

Both parties are equally guilty, look at the howls of anguish during base closings, or when Gates wanted to shut down that useless tri-partite committee in VA.

Steve Pearlstein had a good column on how business is bribing (oops , lobbying) like mad to kill asll regulation and with Robert's Corporate Court they will likely get what they want. I will never buy anyting from Apple, Jobs is a traitor IMHO.

I wasn't creating boogeyman out of Big Oil, Big Pharma, and Big Ag - just describing them in familiar terms and casting fault at Congress' fealty to them at taxpayers' expense. As for rednecks, I'm simply quoting the referenced SC Republican who said that the GOP would suffer a huge "void" without rednecks. It's becoming more true day by day as the GOP continues its policies of alienating blacks, gays, Muslims, gov't. workers, etc.

I'm in absolute and unequivocal agreement with your criticism of our tax code. It's an abomination and a national embarrassment.

You asked earlier for links about how wage dollars are spent inefficiently by the gov't, but I think you've cites some reasonable examples.

The trouble is that the accusations about inefficient government come from GOP politicians for the most part. They, far more than the Executive Branch itself, are the source of such inefficient government spending. That's what so galling about hearing the GOP rail on about such issues while steadfastly defending all DoD expenditures, oil subsidies, etc.

The examples given discussed contracting functions to private enterprise and how much of a sacred cow defense spending is. I really didn't see any example of overpaid public workers. Indeed, most of what I have seen is how much private industry is firmly attached to the government teat.

Regards,

D-ray

Not to mention that most of the high tech weapons procurements are done on a cost-plus basis, a method that does not reward efficiency. In fact, the more you spend (i.e., the less efficient you are), the more you get paid (other than when the Government succeeds is disallowing costs, an exceedingly rare event).

Attached so well they look like a growth. I did a lot of consulting work with many of those Gummint Kontractors at one time. As a friend described what we do "We are Bullshit artists" and he was pretty well spot on. Basically we would write things up so that a sow's ear looked like a silk purse.

What was real fun were the pricing sessions - hoo boy.:p

I realize there are people that work just for a sense of service, but there are also many that just want the benefits of government employment. Given the monopoly that government has over their created functions, it is difficult to find comparisons with private enterprise. The Postal Service might be an apt comparison. Could the Postal Service exist without their mandated monopoly over mail?

"Experienced" also implies entrenched, complacent, and careerist inspired motivations. How does one eliminate a bureaucracy once it is created?

Unless one owns stock in a company why would one care what the CEO earns? The citizen has an interest in minimizing the cost of government because it has a direct monetary cost and it restricts liberty.

The difference is that if I'm incompetent and overcompensated, my clients would decline my services. Hence, I'd either need to lower my rates or increase my competence. In an entrenched government bureaucracy, there are no such limits. Mr. Bureaucrat gets his money regardless of his competence; moreover, since government holds a monopoly, there is no alternative for the service.

I'm not sure they have a "mandated monopoly over mail" (i.e., FedEx and UPS will take your $.44 letters for $10).

Experience to me implies capability. Is your own experience in your job a detriment to performance?

Keep in mind that most middle class (or higher) people are stockholders (often through mutual funds). In fact, over half of all American households own equities in some form. (http://www.ici.org/pdf/rpt_08_equity_owners.pdf )

If I were king, I would prefer that the CEO's of McDonalds, Walmart, etc. made less and their employees made more. This would lessen the need for public assistance for such people (a concern to everyone, including Republicans).

The postal service is also burdened with a hell of large payment it has to make to Washington. Priority Mail is as good as FedEx at less than half the price. Not only that with USPS I am notified when the mail is in, FedEx drops it on the front porch or by the garage door and runs.

And there are no entrenced people in private corporations, boy you must have worked at different companies than I have seen here.

No stock in the company but as my wife says (loudly) when she is picking up her prescriptions "Whose golden parachute am I paying for this time?"

Gotta run New Tricks is coming on.

"Meanwhile over at the casino" was a line in a complex analysis math text I used in college. Sandwiched between meteorology, protein folding, and the behavior of sub-atomic particles was stock market behavior. I'd argue that, like a lot of bureaucracies, Wall Street was once useful, but has become too complex and, dare I say, bureaucratic. There are too many people there that have a straw in the till.

Here's an interesting counterpoint with regard to teachers' pay in which it argues that teachers are paid far too little.

http://www.nytimes.com/2011/05/01/opinion/01eggers.html

Weren't teachers paid even less, say, fifty years ago? I think they did a better job then than they do today. We've been tossing money towards education for decades and yet have not seen a demonstrable increase in the end product, namely, student achievement. Is it lack of family? Lack of quality teachers? Or perhaps, just bad students? It seems, that despite all the obstacles that recent Southeast Asian immigrants endure, they quickly do well in school and move up the socio-economic scale.

The article, in advocating higher incomes for teacher in order to attract the more qualified, supports my previous assertion that government employs the less qualified.

I suspect a correlation between the changing cultural demographics and student achievement being more significant than teacher salaries and/or teaching abilities.

You may be right in your first paragraph, but the bolded excerpt begs a question. Does the government employ the less qualified because they pay too little for the highly qualified to be interested? That seemed to be the crux of the author's argument.