Losing patience with public sector workers and unions

March 5, 2010

This USA Today story has the kind of numbers that stick with people:

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist in both government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available. These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.

Me: It’s the benefits that really stand out. There have been more and more stories out there about the fat union benefits of government workers, both federal and state. New Jersey Governor Chris Christie has been railing on this issue since he was elected last year. Here is a bit from a recent speech that got lots of play in the blogosphere:

Our citizens are already the most overtaxed in America. U.S. mayors hear it all the time. You know that the public appetite for ever-increasing taxes has reached an end. So when we freeze $475 million in school aid, I am hearing the reverberations from school boards saying now you are just going to force us to raise taxes. Well there is a 4 percent cap in place as you all know, yet school boards continue to give out raises which exceed that cap, just on salary. Not to mention the fact that most of them get no contribution towards the spiraling increase in health care benefits.

There is also this from USA Today:

The percentage of federal civil servants making more than $100,000 a year jumped from 14 percent to 19 percent during the first year and a half of the recession. At the beginning of the downturn, the Transportation Department had one person making $170,000 or more a year; now it has 1,690 making that.

And this from the LA Weekly:

In the past decade, Los Angeles Unified School District officials spent $3.5 million trying to fire just seven of the district’s 33,000 teachers for poor classroom performance


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James Pethokoukis

Mr. Pethokouskis

Good evening,

I enjoyed this evening’s CNCB broadcast (3/12/2010) concerning the fact that both you and Mr. Kudlow stated that current Government employees are now making on average approximately $68,000 plus $41,000 in benefits; while a private sector employee is making approximatley $61,000, plus $11,000 in benefits. These are indeed true statistics. I hope Mr. Kudlow, you, and others will continue to raise these outrageous disparities in income/benefits levels. To highlight the nature of these ‘scandalous’ disparities, I would suggest that either the General Accountng Office (GAO) or Office of Management & Budget (OMB) should be instructed to send a ‘direct flyer’ to every American residence detailing Federal Government salaries and benefits. After all this is public information, and most taxpayers are probably totally ignorant of these huge disparities in income.

Joseph Manuel
10005 Greenbrier Rd. #308
Minnetonka, MN 55305
(952) 926-0219
email: jrmnl@earthlink.net

Posted by Joseph R Manuel | Report as abusive

Excuse me, but not ALL US citizens are overtaxed. Not at all.

I, like most my friends, am paying a total tax rate 58 % of my earned income. This 58% total tax rate includes:
a) 33% federal inocme (I get hit by AMT)

b) 10% (state and local income)

c) 5% sales (assume I spend 30% of my take home with a local sales tax of 9% – include here also excise tax on phone, cable, utilities)

d) real estate tax (equals about 10% of my gross income).

Add all the above taxes and you see that most of us are paying about 58% of our gross in total taxes.

However, the top 400 families of the US enjoy an average 16% federal income tax rate (most of their income is dividends and capital gains – both taxed at 15%). Though these 400 families will pay sales tax and real estate tax, as a % of their gross income it is negligible. But even if you assume that 10% of their gross income is paid in sales and real estate taxes (that is 10% of $300 million+ or $30 million!! – we know they aren’t paying those amounts) that would have the top 400 families realizing a total 25% tax on gross income – HALF of what middle America is experiencing.

Most of the Federal budget deficit growth since Reagan is directly attributable to the tax breaks the top 1000 families of America have realized in the past 25 years. Reverse those tax give aways, and the US would soon have a balanced budget, as would many states and municipalities.

Posted by Acetracy | Report as abusive

BTW, the difference between average federal pay and private sector pay for the same job just proves that without a union or some collective bargaining for wages and benefits, the typical ‘private’ American salaried employee is losing benefits and his/her ‘real’ income is falling behind each year with inflation eating away an standard of living when there are no wage gains.

If anything, hats of to the federal employees for taking care of themselves. No one seems to be doing it for the private sector works and we see how their standard of living is decreasing.

Posted by Acetracy | Report as abusive

The Government has long known that monopolies distort market economics they just don’t include unions as monopolies.

And I don’t believe the earlier comment that higher taxes on the 1000 top earners would balance the budget. We are talking about $500 billion and up. They don’t average that much for their entire net worth.

Posted by William Siegl | Report as abusive

[…] Federal workers overpaid. (Hat Tip: James Pethokoukis.) […]

Posted by Time for Fiscal Hard Truth | Report as abusive