Cut Pay For Government Workers (The only way to get serious about the deficit) (

Forbes ^ | 03/02/2010 | Brian Westbury and Robert Stein

[SeekAndFind]

Imagine a company that dominates its field. It's been No. 1 in its industry as long as anyone can remember. But lately it's fallen on hard times. Revenue has dropped dramatically. The only thing keeping it afloat is record borrowing based on its stellar credit rating, earned many years ago. Meanwhile, independent analysts have shown that workers at this company earn higher than average wages. Moreover, the workers have skills that are not easily transferable.

If this were an airline or an automaker, the solution would be a no-brainer: It would be time for a big pay cut. If the company didn't cut pay, or increased it, creditors and investors would question the seriousness of management.

But this is exactly what President Obama did in his most recent budget--request a wage increase of 2% for civilian federal workers in 2010. It's no wonder some are questioning the financial stability of the U.S. So why don't we do something serious. How about an outright pay cut of 10% for all civilian federal workers?

Just to be clear, we're not just picking on President Obama here. The pay increase in his budget would actually be the smallest in 20 years. But total compensation per federal worker--cash earnings plus fringe benefits--now averages twice that of the private sector. So cutting cash earnings by 10% across the board seems not only reasonable, but justified.

Truth be told, it would not save a great deal of money, at least not up front. The payroll (wages and salaries) for civilian federal workers is about $150 billion per year, so a 10% cut would only create $15 billion in outlay savings.

Nonetheless, a one-time pay cut of 10% permanently shifts future wages onto a lower path.

[Peter Horry]

One more point on the EMS. This also shows what can be accomplished when government limits it’s function to an unmet need and interfaces with the private sector.

If the EMS program had been approached the way the Congress is currently approaching health care the aim would have been to control the private sector (doctors & medical facilities) instead of working with it.

[Mobties]

“It’s alreay on the internet at OPM.gov. Knock your self out pasting it all over town.”

Not quite what I meant. I need to see the names of individuals, employed by the state (payed with our taxes) and next to each name the total compensation received.
Taxpayers should know how much and to whom their taxes are paid or wasted, government employees should have to look their fellow citizens in the eye and not hide behind some bureaucracy.

Ideally, these data would be published one full month before any vote on town budgets, city, county, state elections, etc.

[dashing doofus]

Exactly right. Pension liabilities are virtually bankrupting a number of states and localities, including California, Illinois, West Virginia and others.

Government employees (we see a few examples right here on FR), like to compare salaries, but completely disregard the enormous benefit packages they receive and how quickly they qualify for full retirement benefits.

Personally, I’m ok with most government salaries (although not the $150K cops you find in places like California, NY, Massachusetts, CT, and elsewhere), but I would scrap the pension plans and convert them to 401K plans with government match, similar to private sector plans.

These plans were NEVER designed for people to work for 20 or 25 years, and then get paid for another 30 or more after they “retire.” Plus, as you note, many don’t really retire. They collect that pension on top of another salary (usually government), sometimes earning credits toward a second pension.

And their contributions only cover a small portion of the retirement costs - taxpayer contributions cover the bulk.