03/02/10 Stockholm, Sweden – With the 2011 federal budget the Obama administration is adding a two percent wage increase for civilian federal workers. It doesn’t sound like much but, at a time when the total compensation for the average federal worker is double the average of a private sector worker, any increase is too much.
Here’s how Forbes describes the madness of the US government payroll:
“Imagine a company that dominates its field. It’s been No. 1 in its industry as long as anyone can remember. But lately it’s fallen on hard times. Revenue has dropped dramatically. The only thing keeping it afloat is record borrowing based on its stellar credit rating, earned many years ago.
“Meanwhile, independent analysts have shown that workers at this company earn higher than average wages. Moreover, the workers have skills that are not easily transferable.
“If this were an airline or an automaker, the solution would be a no-brainer: It would be time for a big pay cut. If the company didn’t cut pay, or increased it, creditors and investors would question the seriousness of management.”
Yet, with the above perfectly sound logic what we see is another pay increase. Forbes doesn’t claim that a payroll cut would sharply increase government savings — a 10 percent decrease would only save about $15 billion — but it would at least send the right message… that the nation’s leadership isn’t asleep at the wheel.
The complete article is worth a look, and can be found in Forbes coverage of why we should cut pay for government workers.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
The Daily Reckoning is your premier source for making sense of the news Washington and Wall Street generate. Each business day, The Daily Reckoning calls on its stable of world-class writers and thinkers to show you how to get ahead.
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What about immediately rethinking what is really effective and what is required to protect our country including the “safety from terrorism” we’re supposedly gaining from the wars in Iraq and Afghanistan?
I believe about a 50% immediate cut in funding for defense in in order and necessary. BTW, what ever happened to that $2.3 T that then Sec. of Defense Rumsfield agreed could not be accounted for on Sept. 10, 2001 from the Pentagon budget. Did we ever find that money? We could certainly use it now.
I am a government worker in the healthcare field, and I wonder where all of these great salaries are, that Mr. Vega speaks of. They certainly are not in my field. I currently earn less than my civilian counterparts, and that has been historically true. I could earn much more in the private sector. But I chose not to and I have opted out for the job security and job satisfaction that goes with government SERVICE. Because, I have worked in the private sector in the past, and I have watched unprofitable hospital/clinic closures and the daily rationing of healthcare due to one’s ability to pay, the shuffling out of patients not fully recovered or cured, and just the stresses of being part of a broken down healthcare system, I left the healthcare insurance industry. Mr. Vegas stereotyping of over paid government workers, was an affront to the hundreds of thousands of hard working citizens who have opted out for the big bucks, for the calling of military and government service.
To AM. . . Spoken like a true gubbamint worker. Service . . ha! Your productivity as measured by take-your-pick statistic is WAY below private sector, so taking that into account, you are grossly overpaid. Go back to your magazine or web surfing on-the-job and stop whining.
Gov worker here, I agree, can somebody please tell me where all these great gov jobs are? I haven’t found one yet. I have a masters degree in applied physics, have been working in govt for 10 years, and make about $35K/yr less than my contractor counterparts. I stay in gov because it is steady, no layoffs, and I enjoy working for my country. But if I could make DOUBLE what the private sector is, I’d consider it! Please tell me!
Yaa its right that Government Salaries should be cut now,interesting one.