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THE CONSERVATIVE REVIEW - March 12, 2010
Who Should Pay the Piper?
by Pat Buchanan
Greece this past weekend saw the worst rioting since the
debt crisis began. After Athens had announced new tax
hikes and budget cuts to reduce a deficit of 13 percent
of gross domestic product, mobs drove guards from Greece's
Tomb of the Unknown Soldier and attacked police.
In our own country, students, teachers and administrators
at UC-Berkeley held a "Strike and Day of Action to Defend
Education" to demand more money from taxpayers -- for
themselves.
How badly are they suffering?
According to Peter Robinson of Hoover Institution,
California spends $13,000 per student in the state system,
compared to $6,000 in New York.
Yet riots in Greece and demonstrators in California do
portend a time of troubles. For the budget cuts and tax
hikes needed to keep the welfare states of Europe operating
as populations age and fewer children are born will be
staggering and endless.
And, in the U.S., California is where we all are headed.
Nevada, Arizona and New Jersey are staring at budget gaps
of 25 percent. New York and Illinois are not far behind.
Michigan has an unemployment rate of 14 percent. Detroit
is the quintessential sick city.
Republicans may get by this fall surfing an anti-government
wave. But they will soon have to reveal where exactly they
propose to cut.
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Fortunately, good politics and good policy give the same
answer. USA Today's lead story on Friday -- "It Pays to
Work for Uncle Sam" -- contrasted the wages and benefits
of federal workers with those of employees in the private
sector.
Using federal figures from 2008, reporter Dennis Cauchon
found:
U.S. government workers earned an average salary of $67,691
for occupations that exist in both government and the
private sector, which was $7,600 a year more than workers
in the private sector doing the same jobs. Health and
pension benefits for U.S. government workers average
$40,795 per year, but $9,882 per worker in the private
sector.
Nurses employed by Veterans Affairs hospitals earn an
average of $74,460 a year, which is $10,689 more than
private-sector nurses.
Chris Edwards of Cato Institute has compared the pay and
benefits of local and state government employees with
private-sector workers.
He found the average hourly compensation, wages and
benefits of state and local government employees in 2009
was $39.66 per hour, 45 percent higher than the $27.42
per hour package of private-sector workers.
Where 80 percent to 90 percent of state and local govern-
ment employees get paid sick leave, health insurance and
life insurance, and 90 percent receive pensions, that is
true of only 59 percent to 71 percent of workers in the
private sector.
These disparities suggest that government work is becoming
a sweet deal for those who can get it, which may explain
why government has begun to crush the private sector that
has to carry the government on its back.
Consider. Between 2000 and 2010, U.S. manufacturing, back-
bone of the nation, lost 5.7 million jobs, one-third of
all the manufacturing jobs America had. But government
employment rose that same decade by 1.9 million jobs to
22 million, with three-fourths of the new workers being
added to local government payrolls.
States like California, whose public employees are among
the best paid in the nation, are the states closest to
chapter 11. Their last, best hope to close their deficits
is a U.S. taxpayer rescue a la Fannie, Freddy, GM and
AIG. But do the states merit a taxpayer bailout if their
crises come out of their own continuing profligate ways?
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Writes Edwards:
"Public sector workers... can typically retire at age
55 after 30 years of service, as in California's CalPERS
system. In CalPERS, workers receive an annual pension
equal to 60 percent of final salary after 30 years. Public
safety workers in CalPERS can retire at age 50 after
30 years of work with benefits equal to 90 percent of
their final salary.
"In California, there are 6,144 retired public employees in
the CalPERS plan and 3,090 retired teachers in the state
teachers' plan receiving annual pension benefits of more
than $100,000."
And folks wonder why California is bankrupt. Should middle-
class Americans be forced to subsidize $100,000-a-year
pensions for middle-aged California retirees?
Yet, Barack Obama, Nancy Pelosi and Harry Reid, in that
$787 billion stimulus bill, shoveled billions of federal
tax dollars into California to pay salaries, pensions and
health benefits of Californians who have been paid more
than private-sector workers all of their lives. Where is
the fairness here?
Not another federal dime should go out to any state govern-
ment whose employees receive more in pay and pensions than
the average worker in that state or the other 49.
As for the U.S. government, Republicans should call for a
one-year freeze on federal salaries and a two-year freeze
on congressional salaries. If sacrifices are to be made,
the people who had a fat decade at taxpayers' expense
should make them sacrifice, not a ravaged private sector
that has contributed almost all of the conscripts to
today's 15-million-man army of the unemployed.
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