Budget Fight: What Public Employees Really Cost

Are they coddled, exploited or just misunderstood?

  • Share
  • Read Later
Greg Miller for TIME

Every state is different. In North Carolina, firefighters have a stable, well-funded pension, proof that fiscal discipline is possible

(4 of 5)

But wait — even if we knew exactly how much all those benefits are worth, our equation would still be missing the value of one of the most important benefits of all, one that most of us lost years ago. Job security is the gold-plated benefit of the 21st century. How much is it worth? No one knows for sure, but in experiments people value certainty at very high levels. And though public workers have suffered job losses in the past year (and will suffer more this year), the government remains the most reliable employer in the country. Compared with before the recession, there are only 1% fewer employees at the state and local levels, according to the U.S. Bureau of Labor Statistics. The federal civilian workforce is actually 12% larger than it was in November 2007. Meanwhile, the number of private-sector employees has declined 6.5%.

If we really want more effective governance, we should tie these generous benefits to meaningful outcomes. In Singapore, Cabinet ministers and top civil servants have had their pay increased to compete with private-sector earnings since the 1970s. That means the government attracts the best and brightest candidates, and they are harder to corrupt. But when the rest of the country loses money, so do they. In 2008, Singapore's Prime Minister and senior civil servants took 15%-to-20% pay cuts to reflect recessionary losses (which brought the Prime Minister's pay to a measly $2 million). Last year, when Singapore's economy grew by 15%, civil servants received bonuses worth more than two months of salary.

As anyone who works in the private sector knows, there is no perfect way of measuring performance. But that's not an excuse to do nothing. The best organizations use a mix of subjective and objective data tied to the actual job mission and then either repurpose or remove those who rank in the bottom tier — and give more money and responsibility to the top tier.

The government can pull this off. The U.S. Foreign Service, for example, maintains a competitive up-or-out policy. Every rank essentially has an expiration date. Anyone who is not promoted within that set amount of time must leave the Foreign Service altogether. But in most of America, taxpayers have little reason to trust that public-sector workers have been hired, promoted, paid or laid off according to how well they have served the public's interests; if they had, then sizable pensions would be easier for the rest of us to swallow.

This anachronism is unsustainable, and the most forward-looking labor leaders will tell you so. Andy Stern is the former president of the 2.2 million — member Service Employees International Union. "The only job security for public workers in the long run is quality and efficiency," he says. "People want efficient services ... There has to be a massive push, and I would hope unions will try to lead it, toward quality and productivity."

Lately, politicians in Wisconsin, New Jersey and Indiana have blamed unions for their states' fiscal crises. But the truth is, the unions could do nothing without the agreement of legislators, mayors, city councils and school boards. Eliminating collective-bargaining rights will not fix the main problem, which is a lack of healthy incentives. But we know by now that incentives can change, even in government.

Following the last recession, Georgia's then governor, Sonny Perdue, vowed to revolutionize government performance. Sound familiar? That's because leaders in 24 other states did the same thing over the past decade. Most of them failed. But five states actually delivered on their promises in a serious way.

  1. 1
  2. 2
  3. 3
  4. 4
  5. 5