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Dead Constitution
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Title: Federal workers earning double their private counterparts
Source: USA Today
URL Source: http://www.usatoday.com/money/econo ... 2010-08-10-1Afedpay10_ST_N.htm
Published: Aug 11, 2010
Author: Dennis Cauchon
Post Date: 2010-08-11 16:37:22 by F.A. Hayek Fan
Keywords: None
Views: 710
Comments: 78

At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

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.

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.

"The data are not useful for a direct public-private pay comparison," says Colleen Kelley, president of the National Treasury Employees Union.

Chris Edwards, a budget analyst at the libertarian Cato Institute, thinks otherwise. "Can't we now all agree that federal workers are overpaid and do something about it?" he asks.

Last week, President Obama ordered a freeze on bonuses for 2,900 political appointees. For the rest of the 2-million-person federal workforce, Obama asked for a 1.4% across-the-board pay hike in 2011, the smallest in more than a decade. Federal workers also would qualify for seniority pay hikes.

Congressional Republicans want to cancel the across-the-board increase in 2011, which would save $2.2 billion.

"Americans are fed up with public employee pay scales far exceeding that in the private sector," says Rep. Eric Cantor, R-Va., the second-ranking Republican in the House.

Sen. Ted Kaufman, D-Del., says a pay freeze would unfairly scapegoat federal workers without addressing real budget problems.

What the data show:

•Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government's contribution to pensions. Employees contributed an additional $10,569.

•Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

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Begin Trace Mode for Comment # 53.

#1. To: F.A. Hayek Fan (#0)

it is true. Federal workers are paid very well, much better than the private sector.

There was a time when the difference between public sector & private sector compensation levels was much smaller. I think the private sector has been absorbing downward movement in its compensation levels for decades. But the decline in the private sector paychecks has accelerated dramatically in the last 10 years.

Consider the following. One thing that always set us apart as a nation was that our ordinary people were wealthy compared to the ordinary people of other nations. This is how it was in the late 1600's. Americans in the year 1700 were by far the richest people on earth when you consider the ordinary person's ability to get by. Our poor people were rich compared to europe's middle income people in 1700. In the late 1700's Benjamin Franklin contrasted the french standard of living to the American standard of living and said that the french were by comparison extremely poor.

But a study showed that our poorest 10% are now poorer than the poorest 10% in 22 other nations. Throughout our whole history we were #1 in that statistic. Until just 10 years ago. We're dropping like a rock and our people aren't even aware of how bad the drop is.

Red Jones  posted on  2010-08-11   17:13:48 ET  Reply   Untrace   Trace   Private Reply  


#3. To: Red Jones (#1)

deleted

Eric Stratton  posted on  2010-08-11   17:22:17 ET  Reply   Untrace   Trace   Private Reply  


#4. To: Eric Stratton (#3)

yes.

and if we start thinking about adjusting those federal salaries downward, then we should at least be cognizant of the fact that when we lower their salaries & benefits we would also be destroying part of our nation's economy & tax base. Like it or not when any segment of our economy is destroyed for any reason, then there is a multiplier effect in that it ends up taking down more as people spend less than what they otherwise would've spent.

Some people in our society have made the idea of 'protectionism' to be thought of as a bad idea. But we need to protect our economy. Instead of thinking about de-funding our economy, we should be thinking about funding it.

When we fund government by borrowing massively, then we are creating a future expense that we cannot afford. I read the government is going to borrow $2 trillion to fund the deficit spending of just one year. And the government only spends $3 trillion. Deficit spending went up to almost $1.5 trillion in the last year of the Bush admin, I remember reading an article that said CBO predicting that it would be that way in the last year of the Bush admin and also every year after that.

Borrowing money on this scale is suicidal. We should renounce the debt. The lenders will survive. They were stupid to lend it. When you lend on this scale it is not reasonable to think you'll be paid back.

It is a sovereignty battle. Who is sovereign? The government or the bankers? Government should assert its authority, slap the banks down and create its own money to fund spending that must be done to keep our economy going. If government created currency from thin air and invested massively in infrastructure projects, then our economy could get back to 'normal' quickly.

Many people argue that government should not create money because it will create too much and thus cause inflation. But the federal reserve is well known for facilitating rapid money supply growth. The idea that government is unfit compared to the federal reserve is dysfunctional. The federal reserve has gotten us into this mess. Government should take back that power.

In the 1800's we had almost no inflation for the entire century. Money was sound and stable. That was prior to when we enabled the federal reserve in 1913.

Red Jones  posted on  2010-08-11   17:36:14 ET  Reply   Untrace   Trace   Private Reply  


#7. To: Red Jones (#4)

deleted

Eric Stratton  posted on  2010-08-11   19:14:03 ET  Reply   Untrace   Trace   Private Reply  


#11. To: Eric Stratton (#7)

if it is a choice between letting the economy contract by 10% a year for years at a time and keeping the gdp stable, then the government should create money from thin air and spend this money. We need to be aware of the value of maintaining the gdp. it is irresponsible for government to just sit by and watch the economy contract dramatically.

I think you are correct that I have come to a keynesian moment. I don't advocate government borrowing money to fuel spending though.

after WW2 the top tax rate on high income people in America was over 90%. Guess what? the level of debt came down and the economy did not implode even with tax rates up over 90%.

I don't advocate that we must tax ourselves to prosperity in order to fuel government. Government can cut a very large portion of its spending simply by cutting its war funding and bringing all the troops home as well as by renouncing its debt and not servicing that debt.

concerning revenue - we should be very concerned that revenue from the corporate income tax has declined dramatically. From 1960 to 2000 the government got each year 10%-12% of all its revenue from corporate income tax. And by 2005 it was down to around 5% despite that corporate income increased dramatically from 2000 to 2005. Government just plain stopped collecting revenue from this source. this causes debt. we are truly stupid if we think that is good.

government has shifted its burden of taxation from rich people to middle income people. One of the government's big sources of revenue are the multiple payroll taxes levied on paychecks under $80,000 a year. When you consider the employer portion and the employee portion it is 15.8% of each paycheck. People who make over $80 grand a year don't even pay that tax. That payroll tax was raised in 1983.

Back in 1960 almost all tax revenue to the federal government came from rich people. Not any more.

the heaviest taxed people in America are the middle income people who make $50,000 to $80,000. They have to pay on the income tax and on the payroll tax both. Rich people only have to pay the income tax. poor people only pay the payroll tax. The richest people make money from investment. In 2004 the law was changed to create a new tax category called 'investment income'. The rate for that was lowered to 15%, they've since raised it very slightly. But think about it - the poorest people paid 15.8% on their payroll tax. The richest paid 15% on their investment income.

the debt is killing us. and some people can only think about keeping taxes low for rich people.

Red Jones  posted on  2010-08-11   19:32:55 ET  Reply   Untrace   Trace   Private Reply  


#46. To: Red Jones, Eric Stratton, Original_Intent, buckeroo (#11)

concerning revenue - we should be very concerned that revenue from the corporate income tax has declined dramatically. From 1960 to 2000 the government got each year 10%-12% of all its revenue from corporate income tax. And by 2005 it was down to around 5% despite that corporate income increased dramatically from 2000 to 2005. Government just plain stopped collecting revenue from this source. this causes debt. we are truly stupid if we think that is good.

Corporations are not people. Taxing corporations is just a hidden tax on the people as tax costs are passed on to consumers. Corporations should not have free speech rights either. They are not people.

O_I, wasn't there a court ruling that made corporations like people?

farmfriend  posted on  2010-08-12   1:33:48 ET  Reply   Untrace   Trace   Private Reply  


#50. To: farmfriend (#46)

Corporations are not people.

the government gives many privileges to corporations. The law is arranged to make it much easier for corporations to raise up financing than individuals. The law is arranged to cause the tax rate on corporations to be much lower than for individuals. Government favors corporations strongly over people. When you advocate that corporations be taxed not at all or very lightly, then you are advocating that a privileged institution be given yet more privileges. and you also advocate financial ruin for the government. When you just drop your revenue sources and don't try to bring in money, then you're creating debts in an irresponsible manner.

The people that own shares in corporations are taxed at a special low rate that is lower even than what low income people pay on their labor's tax rate. and before the profits are disbursed to shareholders the tax rate on corporate income is extremely low also. After 2000 and before 2006 it was decided that investors get that special low tax rate of 15%, much lower than the tax rate on everybody else, even on low income people who pay 15.8% just on the payroll tax. And also after 2000 and before 2006 taxes on corporations were cut dramatically.

None of these tax cuts caused jobs to be created. they only caused revenue problems. It was irresponsible to cause these revenue problems.

Red Jones  posted on  2010-08-12   7:34:49 ET  Reply   Untrace   Trace   Private Reply  


#53. To: Red Jones (#50)

You have it backwards. The solution is not to bring them down to our level of servitude, but rather, to eliminate the barriers that government puts up to prevent us from engaging ourselves fully in the economy. Your economic life is not a conditional privilege to be doled out to you by Massa Government. Eliminate government control over "who gets better financing" and other such claptrap, and then corporations simply exist as they used to, as simple companies.

There's no need to dig the hole of control deeper.

SonOfLiberty  posted on  2010-08-12   8:23:44 ET  Reply   Untrace   Trace   Private Reply  


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