Pay gap widens between public, private workers - The call for government to enact “share the wealth” policies is growing louder, thanks to a recent Brookings Institution study on rising income inequality.
But this demand rests on a fallacy: that the amount of wealth is fixed, by which one profits at another’s expense.
The exact opposite is true, of course. Income generated in the marketplace — based on voluntary purchases and mutually-agreeable salary negotiations — is a positive-sum game, where both sides gain.
Indeed, the benefits of this wealth-creation process — an abundance of continually improving consumer goods alongside an increasing standard of living — have become so commonplace that they are often taken for granted.
There is one group, however, that actually does enrich itself at the expense of others: the government.
Median government wages have long exceeded those in the private sector — mostly due to occupational differences between the two groups. But that gap has exploded in recent years.
New U.S. Census Bureau data reveals a 43 percent increase in the pay gap between local government workers and their private, for-profit counterparts. That’s comparing median earnings of full-time, year-round workers for the 2010-2014 period against the previous five year period.
Nationally, the median private worker saw their earnings fall an inflation-adjusted 3.32 percent, down to $42,437, while local government earnings increased 0.87 percent to $49,444.
In other words, even though many private workers took a hit during the recession, government wages continued to rise. Almost certainly, that’s the result of multiyear contracts with guaranteed rates of pay, regardless of what hardships befall those responsible for bearing the cost.
In California, the disparity was even harsher: private earnings fell 3.59 percent, down to $45,028, while local government earnings increased 1.66 percent to $62,286. The resulting local government pay gap — 38 percent above private earnings — is over twice the 16.5 percent national overage.
Median earnings for public workers at dozens of cities — like Escondido ($78,602) and El Cajon ($84,508) — were over twice ($36,620 and $41,592) what residents earned, according to 2014 data from TransparentCalifornia.com and the Census Bureau.
In El Monte, California’s poorest residents paid for the state’s highest-compensated city worker: In 2014, former Police Chief Steven Schuster cashed in unused leave to boost his total pay and benefits package to $634,181, while the median full-time, working resident earned only $24,419 — the lowest of any California city surveyed by the Census Bureau that year.
Certainly, higher wages for all is a worthy goal, but clearly that’s not what’s happening. For government workers in these areas, it’s coming, quite literally, at the expense of those already struggling.
This mindlessly reflexive push for higher government pay — even while the rest of the community struggles — is something California teacher Harlan Elrich would “never support.”
And so, unable to legally opt out of paying dues to an organization with conflicting values from his own, Mr. Elrich is one of 10 California teachers currently petitioning the Supreme Court for that right.
Undoubtedly, many other government workers feel the same way. So what is driving such an inequitable outcome?
The culprit lies in mandatory collective bargaining laws — like those found in California — that force public agencies to contract with government unions. Such coercive statutes give government unions excessive leverage in negotiations with their ultimate employers — the taxpayers and the general public.
Notably, within the 28 states that mandate collective bargaining for local government workers, the average state’s median government earnings were 18.6 percent higher than private sector earnings. That’s more than triple the 5.5 percent overage in the states without such laws.
Making matters worse, the cost of a growing government pay gap is amplified by retirement plans that can cost up to 20 times more than what private employers pay.
While the median private employer contributed a maximum of 3 percent of pay toward their employees’ retirement accounts, the San Diego City Employees’ Retirement System cost taxpayers a staggering 60 cents per dollar of pay in 2014.
Based on a fundamentally flawed premise, wealth redistribution schemes ultimately harm the very people they are designed to help.
Instead, elected officials should lighten the burden that ballooning government pay imposes on those least able to afford it.
Riding the bus makes you healthier. No, really!
Mod: One of the more bizarre claims being made for taking the bus.
Sure. Bus riding increases physical fitness and mental health.