The Why of San Jose

You have no doubt heard about Obama’s recent “gaffe” about “the private sector’s doing fine.”

The private sector, of course, is not doing well, not at all — and it’s suffering from a public sector gone mad: Bailouts, increased spending, increased debt, increased regulation.

But our beleaguered and benighted president was trying to make the point that it’s our public sector that’s doing badly.

And there is something to be said — carefully, with much caution — about public sector jobs. In many states and locales, government jobs are not increasing in number. Well, at least not increasing as fast as bailout mania might lead you to think.

And Josh Barro knows why. Public sector jobs are in decline because public sector compensation has been skyrocketing, depleting resources from state and municipal governments, preventing job increases.

San Jose, for instance, used to have 7.5 employees per 1,000 residents. Now the city’s down to 5.6 employees per thou, “with further cuts expected next year.” Why?

[C]osts for a full-​time equivalent employee are astronomical and skyrocketing. San Jose spends $142,000 per FTE on wages and benefits, up 85 percent from 10 years ago. As a result, the city shed 28 percent of its workforce over that period, even as its population was rising.

Blame it on pensions, grossly over-promised.

It’s a problem politicians have: They like to dole out favors. And pensions are something they can promise without funding fully, making “future politicians” (uh, taxpayers) pay (like, uh, now). It’s the scandal of the age.

But I wonder if Obama would ever ’fess up to the real nature of the problem

This is Common Sense. I’m Paul Jacob.