Tag: public employees

Categories
free trade & free markets general freedom government transparency national politics & policies responsibility too much government

Post Dated

USPS, Postal Service, Post Office, Mail, bankrupt, government, inefficiency, Common Sense, Illustration

What does a business do whose market share is decreasing, is billions of dollars in debt, and which incurred one-​third of that debt just last year?

Realistically, it cannot be sustained. Not as a normal business.

Of course, the business in question has been struggling to reform, has been cutting costs. But can’t cut enough.

I’m referring to the United States Postal Service. Not a “normal business,” either: no “normal business” is authorized in the U.S. Constitution — or must suffer with the 535 members of Congress as its board of directors.

Kevin Kosar, writing at the Foundation for Economic Education, says the “existential crisis is already happening.”

And by this he doesn’t mean that the organization is going through a bout of anxiety leading to Nausea, or is so estranged from humanity that on a beach the company will kill an Arab — though that may be indeed true, “going postal” and all. He means, simply, what his title says: “USPS Is Going Down, and It’s Taking Billions with It.”

Many on the left say the problem is Congress’s insistence that the enterprise fund its employee retirement program. Kosar quotes an economist who figures that, even without current (and still inadequate) levels of pension contributions, the post office would have “lost $10 billion over the past seven years.”

Besides, those pensions must be paid for at some time — postponing them just delays the inevitable, making a future bust that much bigger, less manageable. (Current level of unfunded liability? $54 billion — which is not accounted for in its official debt.)

The Internet is more important than the post, now. Could it be time to junk mail?

This is Common Sense. I’m Paul Jacob.

Printable PDF

USPS, Postal Service, Post Office, Mail, bankrupt, government, inefficiency, Common Sense, Illustration

 

Categories
too much government

Paying the Right Wage

Local government is hard. In rural areas, it can be like organizing an ongoing bake-​sale. In metropolitan areas, it’s more like running a small country. 

Today’s big metropolitan governments tend to be run by un-​term-​limited oligarchs, so of course corruption is endemic. When there’s little competition for power and scant oversight, then the “above-​board deals” become, de facto, insider deals. 

And we wind up paying more in salaries and benefits for government workers than anything else. Recently, George Will off-​handedly noted that in California “80 cents of every government dollar goes for government employees’ pay and benefits.”

Is that “too much”? Had we limited government, we would still expect salaries to make up a huge chunk of government. But since transfer payments are part and parcel of so much of modern governance, the fact that employee compensation packages are actually crowding out other line items should give us more than pause.

Truth is, though, it needn’t be hard to tell who is over- or under-​paid, according to economist Arnold Kling:

If you do not have enough sanitation workers because you cannot fill job openings at the current level of pay, then those government workers are underpaid.

On the other hand, if you do not have enough sanitation workers because your budget is busted by the ones you have, then those government workers are overpaid.

Take that notion to your next local government board meeting. Big or small.

This is Common Sense. I’m Paul Jacob.

Categories
too much government

Where to Cut, and How

State and local governments have been hard hit by the current depression. What to do?

Cut.

But where?

Well, legislatures could simply repeal all increases and programs starting with the most recent, going back month by month, year by year to nix spending until total spending dips below current revenue. Legislatures around the country should go into sessions of repeal.

Or they could target endemic over-​spending. According to a January Cato Institute Tax & Budget Bulletin, one area of over-​spending in need of tackling is “Employee Compensation in State and Local Governments.”

According to the bulletin’s author, Chris Edwards, there are several distinct indicators that demonstrate that government workers are generally overpaid. 

Comparisons of compensation between state and local workers and private sector workers show a 1.45 ratio, with government workers garnering nearly half again as much as private sector workers.

The percentage of government employees to receive benefit packages over salary is also significantly higher than private sector laborers.

Further, Edwards notes, “data show that the average quit rate in the state and local workforce is just one-​third the rate in the private sector. This suggests that state and local pay is higher than needed to attract qualified workers.”

So, rational employers — that is, the citizenry — would start there, first by freezing wages and new hires, then by decreasing benefits and reining in profligate promises in retirement packages.

This is Common Sense. I’m Paul Jacob.