Cheat-Seeking Missles

Sunday, May 13, 2007

Edwards Is Right: There Are Two Americas

Unbelievable as it is that mega-rich John Edwards would chose a "rich America/poor America" theme, there's a grain of truth to what he says.
As the first wave of 79 million baby boomers heads to retirement, the nation is dividing into two classes of workers: those who have government benefits and those who don't.
That's USA Today reporting (quoted in Steve Greenhut's OC Register column today) that government workers get better benefits and are much more likely to actually get their pension than their private sector counterparts.

The old adage was that in return for these better benefits and more sure retirement plans, government employees go through their careers paid less than their private sector counterparts. But Greenhut shows this is no longer the case:
Government workers often also make more in salary. There are dueling statistics on public-sector vs. private-sector salaries, but the Bureau of Labor Statistics gives public employees (over the entire range of job categories) a 25-percent premium. Looking solely at federal workers, the Cato Institute explains that those in the government sector earn 56 percent more in salary alone than those in the private sector. Public sector employees also have more days off, shorter work days, better health care benefits and so forth.
It's patently unfair and fundamentally opposed to the laws of economics.

Now, I don't buy into the stereotypes of government employees as do-nothings because I've seen plenty who are dedicated and hard-working -- just as I've seen plenty of paper clip counters in the private sector. But the inherent lack of risk in government work, coupled with assured benefits, demands that pay be lower, on average, than private sector work.

But I do know that when you mess with the laws of economics you get burned. And in this case, it will be a major pension benefits meltdown, and we lesser-paid, lesser-benefited private sector folks will be a big part of the bailout.

Of course, the public employees will also be, since taxes will have to rise to get us out of this mess, but when was the last time the public sector volunteered to help pay off a collapsed private sector benefit program.

Right. Patently unfair.