Editor’s Note: Back in the early years of the 21st century, when California’s tech sector had collapsed and the stock market was down sharply, local government budgets were so strapped that they started closing their offices on Fridays, and applied “furloughs” to their employees to save money. But no public worker took an actual pay cut. They just worked 20% fewer hours for 20% lower pay. This was happening during a time when private companies were permanently reducing their workforce and imposing 20% (or more) actual pay reductions on their employees, who were working harder than ever. Also during this time, in the public sector, “retroactive” pension benefit enhancements continued to roll through city after city and county after county, in a “me too” parade following the SB 400 gift to CHP officers that started it all in 1999. Also through it all, “cost-of-living adjustments” continued to inflate public sector pay – again, at a time when private companies were fighting to survive. Why the imbalance? The power of government unions, who buy our politicians, and whose solution to every cash crunch is to raise taxes, cut services, and never take a pay cut. The best anyone can hope for is to slow the rate of public pay increases, and good luck with that. As Jon Coupal explains in the article to follow, it’s 2017 and nothing has changed.
In a recent column, I commented on how joyous the holiday season would be for members of the state legislature and our constitutional officers who are seeing a four percent increase in their pay. California lawmakers were already the highest paid in the nation.
But as the song says, you ain’t seen nothing yet. In a state the U.S. Department of Labor rates as first in pay for state and local government workers, one of the largest public sector unions has negotiated a pay raise of up to 19 percent for many of its members. Union leaders claim that many of the jobs their members perform are in high demand and, without the increases, employees will be lured away to the private sector. Therefore, a 19 percent increase for “financial experts” currently making between $7,300 and $10,000 per month, is warranted. However, everyone has been invited to the party. Even janitors will be getting an extra 3 percent on top of the standard 4 percent that has been negotiated for all the represented workers.
Other unionized employees, now negotiating pay increases with the state, will likely see similar raises. And it is important to mention that most of these “public servants” are receiving healthcare and pension benefits that most in the private sector can only dream of.
In November, voters said yes to new taxes and to the continuation of the highest income tax rates in the nation. The expensive campaigns that put these measures over the top were funded primarily by public sector unions, so it is not hard to guess where the bulk of the tax revenue will be going. Instead of state government providing more and better services, most of the funds will go to paying for raises for government workers. And let’s not forget the need to fund nearly a trillion dollars in unfunded pension liabilities for which taxpayers will be picking up the tab.
This is not to lose sight of the fact that many public employees work hard and provide valuable service. Most citizens want to see these employees fairly compensated for good work.
However, because government holds a monopoly on most of the services it provides — there is no competition or alternative — much of the work actually provided is subpar. Anyone who must use government services cannot imagine that these across the board raises state employees are receiving are based on merit.
There are those who will justify the additional money as cost-of-living increases. But cost of living increases are based on inflation, which has been minimal due to the sluggish economy. Just ask Social Security recipients, who will receive an increase in their benefits of 0.3 percent (three-tenths of one percent) for the coming year. This translates to about a $4 monthly increase for the average retiree, or about $48 per year. Had the average recipient, who must get by on $1,355 each month, been granted a four percent increase (the minimum for so many state employees) their monthly checks would bump up almost $55, or $660 annually.
But we shouldn’t have to argue over how much government employees should be paid. Since union leadership worries that the private sector will hire valuable workers away unless they are paid more, why not let them go? In the private sector, they can join or establish companies that can bid on doing the work currently performed by government employees. Let them pay themselves whatever they want, but they will have to bid on doing the work they now perform on the taxpayers’ dime. Government will hire the lowest qualified bidder and if their service is topnotch, they will keep their contracts. If not, the governor and Legislature can move on and engage another bidder.
As the late New York Governor Mario Cuomo — a Democrat and father of the current New York Governor — stated several decades ago, “It is not a government’s obligation to provide services but to see that they are provided.”
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.