Now imagine that you have two job offers. One pays a 20 percent higher starting salary, has an overall benefits package worth 45 percent more and virtually guarantees employment for life and annual compensation increases. The only higher numbers offered by the other job are hours of work and years to retirement…
Like many of you, I watch the three-ring circus of governmental agencies with equal parts horror and disbelief. More than at any time in my life, I am concerned with what seems to be open contempt for business. You need not look too hard to see government’s blatant disregard for the well-being of the private business sector. And like many Americans, I am increasingly concerned about what is in store for those of us who proudly consider ourselves “business people.”
One of the more recent causes for my consternation is a report from the U.S. Department of Labor showing that the average state and local government worker makes $39.81 per hour in pay and benefits versus private sector workers who make $27.73. When you stop and consider it, this is stunning news with far-reaching implications. The report, which doesn’t include federal workers, says governmental employees on average make $12.08 more per hour, a 44 percent difference. One can speculate that there would be a wider differential if federal workers, who traditionally earn more that their local counterparts, were included.
Why, you ask, is this an issue? Compensation in the private sector is set by open competition for the best-qualified candidates from the pool of available workers. Governments recruit for the same talent from the same pool.
In the private sector market forces like availability, productivity, and profitability dictate compensation levels. These factors seem to have no bearing with governmental institutions. Their compensation levels evidently are established arbitrarily. Their increases are typically based on one of various inflation indexes and the arbitrary base, rather than the dynamic realities of the market or even performance.Case in point: employees of the U.S. Postal Service are receiving a 2-3 percent raise this year in spite of the enterprise being awash in deficits. Also, government wages and benefits never decrease. Worst case, they increase at a slower rate. Juxtapose that with the aftermarket that saw most of its companies dealing with layoffs and company-wide salary rollbacks in the last 24 months. In fact, between December 2007 and December 2009, the private sector lost more than 7.3 million jobs, yet the number of government jobs actually increased by about 100,000.
My dear mother, a medical technologist, chose to work for a state hospital even though (in those days) she could have made more money working for a private hospital. (Yes, in the 60s there was such a thing as a private hospital.) As a child of the great depression she appreciated the stability of a “government job” that was less prone to layoffs with swings in patient bed counts. She also was attracted to the pension program that the state hospital extended their employees.
What we have today is a much different scenario. Governments have a wage, benefit and security advantage over the private sector. When governments pay significantly more than those of us in the private sector, they are impacting the marketplace in two ways. First they are able attract the best and brightest away from the private sector. That in turn puts pressure on us to pay more.
But what I find most troubling is that our government competing with us using our money. Let’s not forget that our governments are using money collected in the form of taxes to pay these superior wages and benefits.
To be clear, we need state and local government employees to do the work for our common welfare. They do important work that keeps our society together. However, the premium we are paying them has spiraled out of reason. I’m not some right-wing extremist who dresses up funny and carries signs to town hall meetings, but I must confess, I’m creeping closer to that with each passing day.
It is hard for me to conceive of a situation that is more destructive to business than our own governments using our own money to compete us. It galls me to think that it is being done by organizations like the Postal Service and Amtrak that require more of our money to subsidize their losses. Right-thinking business people have to make our feelings known. I’m not talking about dressing up in Uncle Sam costumes while sporting “Throw the Bums Out” posters decorated with dangling tea bags. But, if thoughtful letters to our elected representatives don’t work, maybe it’s time to get fitted for the suit.
Now back to that “imaginary” job choice… which one are you more likely to take?
Now imagine that you have two job offers. One pays a 20 percent higher starting salary, has an overall benefits package worth 45 percent more and virtually guarantees employment for life and annual compensation increases. The only higher numbers offered by the other job are hours of work and years to retirement…
Like many of you, I watch the three-ring circus of governmental agencies with equal parts horror and disbelief. More than at any time in my life, I am concerned with what seems to be open contempt for business. You need not look too hard to see government’s blatant disregard for the well-being of the private business sector. And like many Americans, I am increasingly concerned about what is in store for those of us who proudly consider ourselves “business people.”
One of the more recent causes for my consternation is a report from the U.S. Department of Labor showing that the average state and local government worker makes $39.81 per hour in pay and benefits versus private sector workers who make $27.73. When you stop and consider it, this is stunning news with far-reaching implications. The report, which doesn’t include federal workers, says governmental employees on average make $12.08 more per hour, a 44 percent difference. One can speculate that there would be a wider differential if federal workers, who traditionally earn more that their local counterparts, were included.
Why, you ask, is this an issue? Compensation in the private sector is set by open competition for the best-qualified candidates from the pool of available workers. Governments recruit for the same talent from the same pool.
In the private sector market forces like availability, productivity, and profitability dictate compensation levels. These factors seem to have no bearing with governmental institutions. Their compensation levels evidently are established arbitrarily. Their increases are typically based on one of various inflation indexes and the arbitrary base, rather than the dynamic realities of the market or even performance.Case in point: employees of the U.S. Postal Service are receiving a 2-3 percent raise this year in spite of the enterprise being awash in deficits. Also, government wages and benefits never decrease. Worst case, they increase at a slower rate. Juxtapose that with the aftermarket that saw most of its companies dealing with layoffs and company-wide salary rollbacks in the last 24 months. In fact, between December 2007 and December 2009, the private sector lost more than 7.3 million jobs, yet the number of government jobs actually increased by about 100,000.
My dear mother, a medical technologist, chose to work for a state hospital even though (in those days) she could have made more money working for a private hospital. (Yes, in the 60s there was such a thing as a private hospital.) As a child of the great depression she appreciated the stability of a “government job” that was less prone to layoffs with swings in patient bed counts. She also was attracted to the pension program that the state hospital extended their employees.
What we have today is a much different scenario. Governments have a wage, benefit and security advantage over the private sector. When governments pay significantly more than those of us in the private sector, they are impacting the marketplace in two ways. First they are able attract the best and brightest away from the private sector. That in turn puts pressure on us to pay more.
But what I find most troubling is that our government competing with us using our money. Let’s not forget that our governments are using money collected in the form of taxes to pay these superior wages and benefits.
To be clear, we need state and local government employees to do the work for our common welfare. They do important work that keeps our society together. However, the premium we are paying them has spiraled out of reason. I’m not some right-wing extremist who dresses up funny and carries signs to town hall meetings, but I must confess, I’m creeping closer to that with each passing day.
It is hard for me to conceive of a situation that is more destructive to business than our own governments using our own money to compete us. It galls me to think that it is being done by organizations like the Postal Service and Amtrak that require more of our money to subsidize their losses. Right-thinking business people have to make our feelings known. I’m not talking about dressing up in Uncle Sam costumes while sporting “Throw the Bums Out” posters decorated with dangling tea bags. But, if thoughtful letters to our elected representatives don’t work, maybe it’s time to get fitted for the suit.
Now back to that “imaginary” job choice… which one are you more likely to take?
