News Flash: Public Sector Employees Didn’t Destroy State Budgets
In the last few months, public sector employees have become the economic scapegoats. Governors and state legislatures around the country are claiming that their budget problems and shortfalls are due, not to the Great Recession, but to the overwhelming burden of public employee’s salaries and pensions.
James P. Hoffa, president of the International Brotherhood of Teamsters has something to say to these politicians today in the Detroit News:
It’s time for a reality check. Government employees did not blow a hole in any state budget, including Michigan. Economist Dean Baker points out that shortfalls were almost entirely caused by the recession. “If revenue had increased in step with normal growth (2.4 percent real growth, plus inflation), state and local governments would have had an additional $290 billion since the start of the downturn,” Baker notes.
Public employees didn’t create a huge housing bubble. Wall Street did that. And public employees didn’t cause the Great Recession through reckless speculation. Wall Street did that, too.
State governments didn’t get $3 trillion dollars in loans from the Federal Reserve and profit from those loans by relending them. Again, that was Wall Street.
It’s also important to remember, as economist Robert Reich points out, that the typical public employee’s pension is only $19,000 a year.
These attacks on working families and government workers are nothing more than divide-and-conquer tactics aimed at weakening or eliminating all unions. “
Tags: public sector workers, state budgets
the city of Camden NJ collected the weapons and equipment for 160 police officers and laid them off. 67 firefighters went also. This is a Democratic administration in the city. Governemt is trying to break the unions. Years ago the private sector made way more than people in the public sector. Today, because of a combination of factors, the public sector makes more. I have to laugh at some other forums I go on and see what I assume are conservatives talking about how come nothing is made in the good ole US of A anymore? The answer is simple, you allow cheap you get cheap. Just remember you get what you pay for. So when you call for a cop because your neighbor is being noisy and you are trying to sleep, don’t be surprised if they show up at 2AM and you called at 10:30PM. Better yet, they don’t show at all. Or your house burns down because of firefighter layoffs and station closures. Or you or someone you loves dies because the EMS couldn’t get there in time, because no one was available, just remember you get what you pay for.
Express Funding Group
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States spend money on many things, from employees to roads to building maintenance. If public employee compensation is a huge drag on state budgets, then this trend would likely show up in the data on state expenditures on government workers. If state spending on employees is really out of control, then we would expect the share of state expenditures spent on employee compensation to be very high, and would have rapidly increased in recent years, especially in states with high public-sector union participation. Yet there is very little evidence that state expenditures on employees are a problem. And for a national economy deprived of aggregate demand—in the form of spending these state-sector workers engage in every day—reducing the amount of cash advance in workers’ pockets would weaken our already tepid economic recovery.
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