The So-Called “War On Public Sector Workers”

Writing at The Progressive, Matthew Rothschild is concerned about a “Cynical War on Public Sector Workers.”

The attack is cynical in so many ways.

First, as [Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees] noted, “The problem in the economy has not been created by public workers. It was created by Wall Street.”

Second, it’s not as though any public sector workers are getting filthy rich like the Wall Street bankers who got bailed out and are now back to bathing in ridiculous bonuses.

Third, the attack on public sector workers is an attack on the idea that there should be a decent middle class in this country.

If everyone’s wages and benefits have to be reduced to those offered by the stingiest private sector boss, you can kiss the middle class goodbye.

Fourth, the attack is but a thinly disguised thrust against unions. The public sector unionization rate is 36.8 percent; in the private sector, it’s 7.6 percent. Slashing the wages and benefits and rights of public sector workers is a way to delegitimize their unions. And for Republicans, it’s a way to get back at a Democratic power base and fundraising arm.

Finally, attacking public sector workers is bad for the economy. Cutting their wages and benefits will result in less purchasing power overall. The economy is suffering from a lack of demand already. This will just make that worse.



Rothschild is wrong in so many ways.

First, the problem in the economy was created by Congress, regulators, Wall Street, mortgage lenders, mortgage brokers, borrowers, speculators, and plenty of others.  There is more than enough of blame to go around. 

More importantly, McEntee and Rothschild are attacking a straw man of their own creation when attempting to sever a link between concerns about public workers and the overall economy.  Government spending is just one element of our economic troubles.  But ballooning government employment, resulting over-regulation, excessive compensation for government workers, and massive unfunded government pension liabilities are additional somewhat independent problems.

Second, comparing government workers to the relatively few “Wall Street bankers who got bailed out” is ridiculous.  The problem arises when you compare, for example, government landscapers or mechanics to their counterparts in the private sector.  Federal workers are paid double what their private sector counterparts earn:

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Third, the notion that concern about public sector pay and benefits is simply “an attack on the idea that there should be a decent middle class in this country” is stupid on stilts.  Hell, even the most evil, cold-blooded, bastard capitalist imaginable needs a robust middle class, even if just to prey upon.

The statement that “[i]f everyone’s wages and benefits have to be reduced to those offered by the stingiest private sector boss, you can kiss the middle class goodbye” compounds the stupidity.  The money used to pay public sector workers does not magically appear.  Directly or indirectly, every single dollar — even those that are being borrowed — paid to public sector workers is taken at some point from the wages or investments of other workers through taxes.  Lower government spending and lower taxes means those others may earn more or retain more of what they earn.

Moreover, even “the stingiest private sector boss” has to pay actual market wages.  Otherwise, workers will not work for that particular boss.  They will go to another boss who pays market wages.  That is how markets work.  The objection is to paying grossly above-market wages and benefits to government workers, at the expense of everyone else.

Fourth, of course unions are a target — they are part of the problem.  “And for Republicans, it’s a way to get back at a Democratic power base and fundraising arm.”  Yes.  Why should Republicans accept massive wealth transfers to public employees, whose unions extract millions of dollars from taxpayer-funded salaries to spend on defeating Republican office-holders?

Finally, Rothschild again exposes his economic ignorance by claiming that cutting public sector wages and benefits is bad for the economy.  Government spending does not add to the economy; it takes money from the private sector — decreasing demand or investment there — and moves it to the public sector.  As the Obama stimulus has shown us, government spending is, at best, like taking water from one side of a bathtub and pouring it into the other side. 

Via Real Clear Politics.

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Published in: on January 3, 2011 at 4:30 pm  Leave a Comment  

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