Since 2005 the pay (wages plus benefits) for state and local government workers in the U.S. has increased five percent, while compensation for private sector workers has remained flat. That extra five percent isn’t exactly peanuts:
State and local governments pay more than $1 trillion in compensation annually (actually, that’s an astounding number–I had no idea it was that high). If compensation is 5% higher than it should be, that’s $50 billion in excess pay costs for the state.
Not only does this $50b of mandated excess generosity on the backs of the taxpayers add up, it adds up rather nicely:
Lo and behold, that $50 billion would roughly cover the total size of the state budget gaps. For example, in February a survey found that the combined budget gap of all 50 states was $55 billion for the 2011 budget year and $62 billion for the 2012 budget year.
Why, it’s as if there’s a solution in there somewhere…
Apply that to Canada, where the bureaucracy is even larger. I keep saying a majority government awaits that party which aims and acts to downsize government. In these economic times, there’s even a solid financial argument for doing so.
Alas…
a lot of dough for leaning on a shovel at the union rate.
A research paper, published in 2008, by the Canadian Federation of Independent Business, compared identical public-sector and private-sector jobs at the federal, provincial and municipal level.
Municipal employees earned 11% more in wages than their private-sector counterparts. When benefits were included, they earned 36% more than private-sector counterparts.
Provincial employees earned 8% more in wages than their private-sector counterparts. When benefits were included, they earned 25% more than private-sector counterparts.
Provincial employees earned 17% more in wages than their private-sector counterparts. When benefits were included, they earned 42% more than private-sector counterparts.
Today, a comparison between public-sector and private-sector wages and benefits would find that the gap has increased even more.
The recession of 2008-2009 hit the private-sector hard. Many employees in the private-sector had to take cuts in wages and benefits just to retain their jobs. The public-sector was spared these cuts.
Right, the public sector, paid for by the taxpayer, is a protected elite set of workers.
Note that the public sector is a monopoly and without competition. Unlike the private sector, the public cannot go elsewhere for those services- whether it be in public transit, health care, land and title registration, immigration services, etc.
Furthermore, unlike the private sector, the public service is unaccountable. If their services are slow, indifferent, error-prone – this neither affects the security of these employee’s jobs nor their costs.
The powerful unions have one goal – to extract more money from the taxpayer – to enrich the union executive. The modern union is no longer for the worker but is itself a corporation..that gets its income from union dues.
Consider the Toronto Transit Commission, whose workers receive TWICE the wage increases of the private sector, with health and dental benefits totally out of reach of the private sector. If they don’t receive these demands, they go on strike – and since they are, legally, the only transit in the city – they paralyze the economy. Ticket collectors, that’s right, ticket collectors, can earn over 100,000 a year.
The high costs of these wages and benefits mean that there’s no money for infrastructure, so the subway stops are filthy, the escalators and elevators broken, the service inadequate. Their solution? Get the province or federal govt to give more money. Remember, that money comes from the same taxpayer. It never occurs to them that their elite ‘workers’ take all the money for themselves.
Jim Home @8:10AM,
was that Federal employees who scored the 17% increase in wages?
Theres a bigger picture out there.Globalists have set this up,corporate interests have had their way with the economies of the developed world.Does anyone want to explain where the tarp money went.Bernanke flat out refused to disclose where the tarp money is.Joe citizen cant borrow a dime,the American people are facing a serious reduction in the quality of life and standard of living that they used to enjoy.Obama is joking about allowing the invest banks to plunder the US.Are you going to wait for this to happen here before you acknowledge that exotic investment schemes are being used to bankrupt Iceland,Greece,Portugal,Spain and the list is going to continue to grow while we fiddle away valuable time hoping it will never happen here.Soon the state will have to suspend the constitution because the Tea Parties are threatening to begin to ask for greater Truth and Transparency from elected officials.Illegals are allowed into the states for no other reason than to provide a huge progovernment anticitizen voting block that thinks Obama will be their savior.Next on the agenda pension funds seized to prop up failed banks.Dont wait for CBC,CTV or Global to report this the internet is buzzing with this stuff.Google Greg Palast tells how IMF set up Iceland.
ET;
Your comment about TTC ticket collectors earning $100,000 per year is pretty disingenuous. Their hourly wage is in the range of $20 an hour which works out to about 40,000 per year. The only way they can make the kind of money you’re talking about is to work enormous amounts of overtime.
Civil servants do require a level of protection a little higher than the public. The reason is they have to do a lot of things that do not make sense due to conflicting priorities they do not set. That being said there are a lot that should have that protection removed. I once had a request from Ottawa to send two sets of reports to two different controllers. They shared a secretary. I said photocopy it because I was sitting in a hole to send two reports of the same thing, to the same place and I do not type well. You ain’t that special.
From there we went to hire people with degrees because otherwise it was a waste of money to educate them and we have quotas. Then I figured the game was pretty much done. Our productivity dropped about 60%. When Ottawa noticed it was about three years too late.
Mikeg, enjoy your posts but they are tough to read with no sentence breaks or paragraphs.
Mikeg, sorry to read you can’t be bothered to try to communicate your messages, which are well worth reading by the way, so they can be read by the most people that you can reach in your postings.
Your call. With so many great posters on SDA that are must reads and limited time I must edit my viewing of the thread so will have to skip yours.
Maybe some one out there knows,but how many non govt. taxpayers does it take to pay one govt.worker? Govt workers dont pay tax,they get paid by taxes.The Soviet Union had no taxes as every one worked for the govt.
You think the troubles in Greece are bad… wait until California or Ontario defaults on it’s debt:
http://globaleconomicanalysis.blogspot.com/2010/03/california-usa-vs-ontario-canada-which_29.html
AAhhh, but thanks people…”for keeping Crowns Crown!”
SGEU…extracting Fort Mac wages out of a wheat economy.
Dave.you illustrate my piont most capabaly.You focus on the irrelevant at the expense of the most critical,for me it begs the question are you a public service employee.
There has to be an incentive for public service to maintain the ‘us and them’ culture that percolates down from the administrative and executive class.
This is public sector unionism mimicking governmental entitlement culture remuneration. Pay increases are not merit based but entitlements of public sector employment.
Us and them – the gap widens both culturally and economically.
Let’s not forget how Quebec is dragging down Canada’s potential.
An independent Quebec is a win, win for both sides.
Is another Greek Tragedy in the making?
Dave.you illustrate my piont most capabaly.You focus on the irrelevant at the expense of the most critical,for me it begs the question are you a public service employee.
Posted by: mikeg at May 5, 2010 10:57 AM
mikeg, Dave was making a valid point. Like Dave, I skip walls of text, and didn’t read your first post. You would do yourself a great service by better organizing your written thoughts with paragraph and sentence breaks.
Also, to “beg the question” is to reference a specific fallacy in logic, more commonly known as a circular argument. You should use the phrase “raise the question” in this context. (Not intending to ‘pile on’ here, the beg-the-question misuse is simply a personal pet peeve and I take any opportunity to correct it).
Apologies to our hostess for the O/T post.
mikeg;
I don’t know why you would say what you did to Dave. He’s been quite complimentary of the content of your posts, saying that they “are well worth reading by the way”.
A question for you. Have you noticed that no one has commented about the content of your posts, but rather just about the poor style. Something to think about perhaps.
EBD, I wonder if this fully counts the pension issues – in the past ten years, a defined contribution plan was pretty good, as the market would give you a good return. Many gov’t jobs are defined benefit plans – which takes the market variation out of the equation.
I don’t know how people’s pensions (defined contribution) will look over the next ten to twenty years. . . .
A research paper, published in 2008, by the Canadian Federation of Independent Business, compared identical public-sector and private-sector jobs at the federal, provincial and municipal level.
Municipal employees earned 11% more in wages than their private-sector counterparts. When benefits were included, they earned 36% more than private-sector counterparts.
Provincial employees earned 8% more in wages than their private-sector counterparts. When benefits were included, they earned 25% more than private-sector counterparts.
Federal employees earned 17% more in wages than their private-sector counterparts. When benefits were included, they earned 42% more than private-sector counterparts.
Today, a comparison between public-sector and private-sector wages and benefits would find that the gap has increased even more.
The recession of 2008-2009 hit the private-sector hard. Many employees in the private-sector had to take cuts in wages and benefits just to retain their jobs. The public-sector was spared these cuts.
Why is it that there are unions for those that work for the taxpayer?
Was it not that the unions were created for helping the workers to get a better deal for their labor?
Who has got a better deal, the taxpayer of the tax consumer?
Was it not Trudeau’s idea to unionize the public service?
One can see that the politicians would go for the unions to get control over the bureaucrats, it obviously backfired and now they and us are stuck with it. There is no politician in the whole world to declare the public service unions void.
There was one once, Pres. Reagan
Now the plebeians will have to wait until the whole show collapses.
This is not preferred solution, though there is monumental absence of will to do anything.
It is easier to suck money out of the plebeians, than confront the reality.
Shoul read:
Who has got a better deal, the taxpayer “or” the tax consumer?
Jim Horne;
I neither doubt nor question the numbers you put out in your 11:44am post, but that isn’t always the case. Municipal workers for the city of Toronto received no raises between 1991 and 1998 while inflation was eating away at around 2%-3% per year. That’s a drop against the cost of living of about 20% all tolled.
On top of that, they had a 5% reduction in the form of “Ray Days” (forced days off) as they were called at the time.
What I would find interesting is the total amount of Government revenue actually spent on salaries and benefits. Apparently California spends 80% of it’s revenue on just that, salaries and benefits, so whatever services one receives from the government is probably useless anyway. Filler as it where to justify those 100k a year jobs.
CFRA news (Ottawa) today – City workers Average salary 2009 – $63,000.00 with benefits average = $66,000.00.
The TARP issue is complex but I’m gonna take a stab at it.
Reserves protect deposits, banks are required to keep X amount of their equity in reserve to satisfy demand on deposits. Think it’s a Wonderful life and the Savings and Loan has a lineup to withdraw deposits. Well deposits are what is used to lend.
In other words protection on a run on the bank,
Now in today’s world lending is significantly more complex. Bank’s will lend in the overnight market in order to bolster reserves.
Again this is a over simplification. Money can move so fast that a overnight market is required to simply comply with regulations.
If you have instability or a broad view that much of the assets that are held for reserve are worthless then reserves can be tainted. So a counter party will be reluctant to lend overnight, or for 30 days 60 days etc. because the validity of the reserve assets come into question.
Should that be the case then you can’t borrow in the overnight market to stay on side with reserve requirements.
If that is the case then lending all down the chain is affected.
On any given day a single bank will move 20 billion in various and sundry debt instruments so to find a net is difficult when you have essentially a couple of hours to the close to determine your net position. At that point mark to market is calculated and your counter party balance sheet is essentially determined.
So when the possibility that your counter parties base may be tainted with Mortgage backed securities that are considered a severely depreciating asset you will not lend to a requesting bank to fill out their reserve requirements.
Should that be the case lending all down the chain freezes up because if can’t stay on side with your reserves then you shut down all lending that will potentially put you offside.
So TARP basically gauranteed the assets that defined reserves. In order to free up capital to be lent for business to carry on.
What most people don’t realize is that most of the money flying around the world during any given day is done on word of mouth in other words pick up a phone and buy or sell $250,000,000 of debt or equity its is accepted as a verbal transaction. I believe that is called Honesty, integrity. If you had to write a physical contract for every financial transaction in the world we would essentially shut down. To much money moves to fast to negotiate a physical contract they have to be honored without question.
That the system has operated this way for at least 150 years is a testament to the soundness of the progam.
To facilitate these transactions reserve requirments have to be met. So the treasury took questionable assets and replaced them with the full faith of the federal government. This was done in order to create the impression that the assets backing the lending were sound and the loans would not default.
It is odd you know that folks will lament a municipal employee not getting a raise.
For me however, I was downtown one afternoon and watched 9 men, who took 3 hours to pave a 3 foot by 20 foot trench in the road.
To “Colin from Mission BC”.You are tilting @ Windmills old son.
“Most authorities now view the current ‘raise the question’ meaning as acceptable, even if that is a somewhat grudging recognition that the weight of numbers of those who use it that way is overwhelming. It is also suggested by some that the minority who know and understand the original version should avoid using it, unless they are amongst consenting adults, as they aren’t likely to be understood. That would be an unfortunate route to take. Whatever we might prefer, it is very likely that the percentage of the population that knows, or cares, that they are using the phrase incorrectly will continue to decline.” Wikipedia
As I see it ALL government worker (from the part-time local school janitor up to the PM) should never ever get more than MINIMUM wage.
That will fix the problem of big government in a snap.
Most government employee union promote the idea of benchmarks and pay equality. Perhaps those ideas should be implemented to bring the down the income gap between public and private sector employees.
bob c- yes, they get a lot of overtime. The 100,000 salary was in the news and was not ‘disingenuous’ but is factual. A ticket collector requires no skills, no work, nothing – other than sitting there and selling or accepting tickets. Nothing. A salary of $20.00 an hour plus those benefits is far in excess what the work merits to the taxpayer.
Their last accepted offer, expiring in one year from now, was for wage increases of 3% a year. The average in the private sector is 1 to 1.5%.
Their benefits are well above that of the private sector, including major dental care, orthodontic, chiropracter, disability etc.
Again, public service is a monopoly and compensation doesn’t depend on the value of the goods/services offered but on the political thuggery of the unions – who work hand in glove with the politicians. In Toronto, the unions control City Hall.
They not merely fund candidates but they have their union members go out and work of a ‘preferred candidate’, i.e., a union-friendly politician. Their union members are told to canvas, hand out brochures, work the offices, on behalf of ‘their’ candidates. Then, the unions extort these huge wage, benefit and pension increases – far beyond the value of the work done, and threaten to strike if they don’t get these demands.
Unions are parasitic corporations; they have nothing to do with the well-being of workers but have set up an elite Set of ‘Workers’ – protected, unaccountable, can’t be fired, who do minimal work…and the public unions are the worst of them all.
Thanks for the input.Ive already maxed myself out by learning to type with two fingers.Given my limited education and my crappy attitude toward any form of authority I dont hold anybodies opinion of me of any consequence.There are precious few I feel are worthy of my respect,but if there maybe a hope people will wake up I promise to take your input and advice to heart.Apologies all round.
Jeff Cosford @ 2:00 PM :
“That the system has operated this way for at least 150 years is a testament to the soundness of the progam. ”
Not hardly Jeff. The central banking Fractional reserve system you dote on has only existed since 1913. From 1913 onward has been an unstable roller coaster ride of depressions, recessions, and savings-killing inflation, and now, a paniced contraction of frivilously over extended fait currency and credit. “The program” is open to, and rife with, corruption – particularly where the rate of credit/dollars issued to reserve currency/assets held is concerned.
Prior to this for 500 years we ran on hard asset currency systems and smaller banks, individuals and currency users/savers were better off and far more secure. Depression was unheard of and what ever minute inflation there was actually paid interest to the gold/silver bearer for just keeping the money in his pocket. Your pants pocket currency paid interest without risking it in a Bank as the hard currency (Gold/Silver) you carried/earned accrued in value just sitting in your pocket. For a Banker to entice you to part with it he had to pay better interest than currency value increases. Great days those. Each individual in complete control of their economic future and the Bankers having to cater to the economic power of privately held wealth.
I doubt we’ll see those days again as the banking cartels which run the over inflated value depleted fiat monetary systems would rather implode them than see economic power in the hands of the individual again.
THe IMF reserve currency/credit system is the road to global economic armageddon. Every economist worth his salt has called for the free nations to return to some form of hard asset currency/credit system.
watcher: What is it with guys like you, you can’t make a reply without throwing out some insults to bolster your opinion. Moron.
I wasn’t making a statement on the pro’s or con’s of fiat currency or the system in general but simply trying to put meaning to a program of the government that is grossly misunderstood.
And if you think that the returning to a system that serviced a significantly smaller population
who’s primary activity was agriculture then your dreaming.
Nothing would get done because you could not use future earnings to fund expansion today. The problem is not fiat currency, per se but the corruption in the agencies that manage it. Think congress for a start.
Your world view is to put it kindly provincial.
I agree with you, Jeff, on the question of fiat currency (somewhat to the distress of some of my friends 😉 On the other hand, I don’t think that calling someone a “moron” is an effective chastization of their “throwing out insults to bolster [their] opinion”.
“watcher: What is it with guys like you, you can’t make a reply without throwing out some insults to bolster your opinion. Moron.”
I didn’t insult you. Grow a skin.
“Your world view is to put it kindly provincial.”
Now who’s insulting?
My opinion is shared by a lot of economists. Secondly, why do you blind faith people always underplay the disasters your systems create? As well what’s with the all-or-nothing logical fallacy? I said there has to be a return to “SOME FORM” of hard value currency. There are other tangible value instruments besides precious metals to use as a national reserve to cover circulated currency. And we have seen leaving fractional reserve systems in the hands of private banking cartels has proven to be a breech of trust.
The current system is faulty to the point of imploding. Deny that all you want but the daily bad news from “too big to fail” failures and continuing global melt downs would indicate your faith in this system is not a matter of assessing the facts on the table.
ET;
In your post at 8:46am you said, “Ticket collectors, that’s right, ticket collectors, can earn over 100,000 a year.”
In point of fact, when I googled for it all I found was an article that referred to one guy who managed to accomplish that, a guy who worked 421 shifts in the year in question.
Let’s analyze that. A full time employee works 5 days a week which accounts for 260 shifts. This guy worked an additional 161 shifts on top of that. To do that he would have had to work double shifts (16 hour days) for 8 of the 12 months, or he would have had to work every single one of his days off plus double shifts for 3 months out of the year.
Simply put ET, ticket collectors (plural) don’t come close to making 100k a year, just a single guy who busted his hump so hard that he would make a pack mule look like a slacker.
For that kind of a work ethic, you describe the guy as a member of “an elite Set of ‘Workers’ – protected, unaccountable, can’t be fired, who do minimal work”. Good grief ET, shake your head.
Im glad someone else noticed ETs apparent lack of honesty.It seems he thinks many of us unworthy of this basic level of respect.
bob c- no, I didn’t describe this one individual as an elite set of workers. I described ALL members of a public service as an elite set of workers. Why?
I’ll repeat it.
Because their wages, benefits and pensions are two to three times that of the private sector. Because they function within a monopoly service such that the taxpayer-user has no choice but to use their services. This makes them an elite set of workers.
Because their insistence that they get their union demands (i.e., those wage increases that are double that of the private sector, those benefits, those pensions)..or they will go on strike is effectively an act of extortion. This makes them an elite set of workers.
Because they essentially can’t be fired; their services are unaccountable; they get away with poor quality and indifferent service, which would not be tolerated in the private sector. This makes them an elite set of workers.
The cost of keeping this elite set of workers is over 70% of the taxpayers’ funding for the service. Therefore there is no money for infrastructural requirements. With regard to the TTC, since most of the money goes to this elite set of workers – their bloated wages, benefits and pensions – then, the equipment of buses, streetcars, subway cars, stations, tracks etc, is essentially unfunded. The stations are filthy, the escalators and elevators not working, the system totally out of date and in many cases, unusable by many taxpayers.
That’s an elite set of workers. Funded by the taxpayer. But providing a zero quality of service for that taxpayer.
Vitruvius it wasn’t that long ago I attempted to have polite conversation with someone similar to watcher, as the conversation progressed the insults grew more intense. I have neither the time nor the patience today to indulge a repeat performance.
As for Central banks the 1913 Fed is the third iteration of a Central Bank in the US, not to mention the Bank of England which is somewhere around 400 years old.
GREECE is Broke, how so?
By the way, bob c, it wasn’t one TTC ticket collector earning over 100,000; it was 21.
“He was among 21 token collectors and 62 bus, streetcar and subway drivers who earned over $100,000 last year, according to a list of public sector salaries disclosed yesterday by the province.
http://network.nationalpost.com/np/blogs/toronto/archive/2009/03/31/eager-ttc-ticket-collectors-earning-over-100k.aspx
“Councillor Denzil Minnan-Wong said on the one hand the TTC faces staff racking up tremendous amounts of overtime while on the other there is a problem with absenteeism.
Last year workers off the job sick cost the TTC $5 million, while compensation claims have soared. This year the transit agency wants to spend $5 million to hire more staff to address the absenteeism problem.”
The Elite Set of Public Service Workers. Heh.
I agree, Jeff: I too have neither the time nor the patience today to
indulge a repeat performance. Um, so, why did you start to do that?
I’m not trying to pick on you, Jeff, yet as someone I agree with on
this matter, I think the argument is better off argued without the use
of the word “moron”. Let “Watcher” hang himself ~ he’s doing a fine
job of it ~ but don’t get on the scaffold with him.
Vit out of respect for you I will in future resist any urge I may have to call watcher a Moron.
ET;
You make an absolute fool of yourself when you say things like, “Because their wages, benefits and pensions are two to three times that of the private sector”, and that government workers provide “zero quality of service for that taxpayer.”
If the first of those statements was true that would put the average level of compensation for a city worker in the range of 90 to 135 thousand per year. What a sick joke. Even groups like the Taxpayers Federation don’t make that kind of ludicrous claim.
If the second of those statements was true there would be be no roads for you to drive your car on, no water treatment plants to keep your water clean, no buses or subways for you to use, no parks to enjoy and walk in on a nice summer day etc, etc, etc.
To argue that any of these services could be better provided or at a cheaper cost is legitimate, but to say what you did is just breathless exaggeration.
Get your meds checked ET.
Absolute fool? What, did I accidentally stumble
into a language abuse seminar here? Look, folks,
if you abuse hyperbole to the point that it no
longer has any value, then what are you going to
do when you need to use hyperbole?
By the way ET, you still haven”t addressed the point I made about the enormous amount of OT a person would have to work in order to make that kind of money, far more than you’ve ever done judging by how often you’re on here regaling us with your ill-informed opinions.
Yes, step right up, ladies & gentlemen: get your ad hominems here. Oy vey!