Public Versus Private Employee Salaries

 I was watching the “Jersey Shore” on MTV last night, when my thoughts turned to reports by the Cato Institute, Free Enterprise Nation, and others, which found that federal worker wages were 50 percent greater than the average private employee. 

When wages and benefits are combined, federal employees receive twice the amount of compensation than private sector employees.

There’s a fundamental disconnect there, in my opinion. You have to wonder who’s serving who.  Private business is the engine that drives the economy and pays the taxes, and the economy is still struggling in many aspects.

As a small business owner and a taxpayer, I have often wondered how much government spending is really necessary and how long can we continue to fund government at the rate that we do. Now we’re at the point where the private sector is struggling to compete with the compensation provided by the public sector.

With deficits mounting at every level of government, you have to ask how much longer this excessive rate of government spending can go on.

While it would be easy to say that we could eliminate all government services – and pay no taxes -- there are necessary government functions. The question is how many programs and agencies do we really need, and what should be adequate compensation. I’ll leave those decisions to the experts and the voters (and to you my readers), but it seems to me something’s got to give.

In business, when times are tight you have to reduce expenses and payroll. It’s difficult, but it is necessary when revenue is on the decline. That’s the business cycle. This reality often does not always affect the public sector however, and we witness negotiated employees raises year in and year out regardless of the overall economy.   Government, however, can act immune from these economic realities if it is allowed to borrow money recklessly and without oversight by the voters.

In my opinion it’s the syndrome of “other people’s money,” where it’s easy to spend lavishly when you don’t have a stake in the consequences. All too often that is case with public funds. I further believe that the downsizing principles that businesses have been applying since about the late '70s need to be applied to government, and other sectors such as health care and education. In this way every dollar is accounted for and spent efficiently, and we begin to restructure government.   We can’t continue the way we’re now going.