Cash strapped? Consider government work.

Johnathan Lott

As the economy stays in shambles two and a half years after its sudden tank in 2008, many Americans continue to face low wages, layoffs, and unemployment.

Or, more accurately, those in the private sector do.  Public employees continue to do just fine for themselves.

Take, for example, lifeguards in Newport Beach, California.  Every one of the city’s lifeguards last year made six figures in total compensation, with some topping out at over $200,000.  Not bad for a beach job.  Of course, every penny of this is funded with taxpayer dollars.

After a media investigation of the situation, citizens in the area are rightfully outraged.  But the sad part is that this is not an isolated incident.  Government employees make bank.

A report last year found, for instance, that federal employees averaged $68,000 in salary in 2008.  They also received fringe benefits worth about four times what the average private sector employee earned.  In the vast majority of cases, federal employees earned more than private sector employees for substantially identical work.

The situation is just as bad in state and local government jobs.  Once again, public pay trumps private sector pay for the vast majority of Americans.

A number of non-surprising reasons explain this trend.  Foremost is the union problem.  Union representation is four times greater in the public than the private sector.  Unions, notably the SEIU, are able to use their bargaining power to drive up salaries, benefits, and job security of public employees far above market levels.

And the public unions are in a unique position to do so.  By contrast, private unions have a certain vested interest in their industry.  If they drive up wages too high, for instance, and the company goes under, then all of their employees are out of jobs.  They are inhibited by market realities in distorting wages too far above market levels.

But public unions face no such constraint.  Their employer is backed by the full faith and credit of the US government.  They have unlimited room to bargain without detriment to the health of their industry, especially since that industry can always find the funds simply by raising taxes. 

The other problem is that people on the other end of the negotiation table want to help the union.  The politicians and bureaucrats who set wages depend on the union for votes, support, and campaign donations.  And if they agree to raise wages, there are no short term consequences.  Indeed, up through the next campaign, there are only benefits.

The other reason for the inflated salaries is that the government suffers from a great sense of inflated ego.  They feel they must pay to attract the best and brightest workers, because the government needs to be run with the best and brightest workers.  Indeed, government jobs are usually very competitive and go to very qualified candidates. 

The problem arises in the nature of the work and the accountability of the employees.   In providing services, the government faces a client base that has paid for all the services up front, so they gain no benefit from providing a service.  Coupled with the sense of entitlement and arrogance that comes from European-style job protections and lack of client-side accountability, these qualified workers quickly become the “lazy” bureaucrats that we have come to despise every time we encounter them.

Without a radical resizing of government in this country, we’ll probably never see this change.  But in the meantime, we can at least start asking the government questions.  For instance,

“What are we paying for?”