Myth of the greedy public-sector workers

Subject: Myth of the greedy public-sector workers

Myth of the greedy public-sector workers

How can politicians and the media be complaining about

pensions for government workers when a decent society

would guarantee a decent retirement for all workers?

August 18, 2010

POLITICIANS AND the media have found a new scapegoat for

the economic crisis and the savage budget cuts being

carried out by state and local governments:

public-sector workers and their unions.

It turns out the problem all along was overpaid and

underworked government workers. You know–all those

teachers and firefighters and social workers. And

especially the retirees selfishly living large on a fat

government pension.

“We have a new privileged class in America,” Indiana’s

Republican Gov. Mitch Daniels told Politico. “We used to

think of government workers as underpaid public

servants. Now they are better paid than the people who

pay their salaries.”

Unbelievable. But these claims aren’t just coming from

Republican jerks. Earlier this month, the liberal New

York Times ran an article about the “coming class

war”–but in its upside-down world, the greedy villains

were teachers and bus drivers, not Wall Street bankers

or corporate CEOs:

The haves are retirees who were once state or municipal

workers. Their seemingly guaranteed and ever-escalating

monthly pension benefits are breaking budgets


The have-nots are taxpayers who don’t have generous

pensions. Their 401(k)s or individual retirement

accounts have taken a real beating in recent years and

are not guaranteed. And soon, many of those people will

be paying higher taxes or getting fewer state services

as their states put more money aside to cover those

pension checks.

Of course, the budget crisis hitting state and local

governments is real. On the very same day that the Times

drew a target on the backs of retired teachers, it

published an article documenting how states and

municipalities are making stunning cutbacks–from Hawaii

shutting down public schools on 17 Fridays during the

last school year, to the city of Colorado Springs

turning off one-third of its streetlights.

But the claim that public-sector workers are the source

of the shortfalls is absurd.

– – – – – – – – – – – – – – – –

FIRST OF all, the real cause of the state government

budget crisis is a massive reduction in taxes on

business and the wealthiest individuals over the last

quarter century.

If states and cities wanted to find money for public

spending, they could try eliminating the tax breaks they

handed out like candy to big corporations. Likewise, the

federal government could get $700 billion more in

revenues over the next decade if it got rid of the Bush

administration’s tax breaks for the richest few.

If public-sector workers seem to be better off, it’s not

because they’re doing so well, but because workers in

the private sector are doing so much worse.

One big reason for this is Corporate America’s attack on

unions. For the first time in U.S. history, government

workers are a majority of union members, largely because

of the sharp decline in unionization in the private

sector. Today, more than 37 percent of public-sector

workers belong to a union, compared to just over 7

percent of people who work for private companies,

according to the Bureau of Labor Statistics.

So one underlying motive for the scapegoating of

government workers today is the capitalist class’

old-fashioned hostility to working-class organization.

The attempt to demonize greedy public-sector workers is

part of the attack on unions in the one sector of the

economy where they remain strong in any measure.

But when you look a little closer at the claims of the

six-figure-income politicians, it turns out that even

the advantages that public-sector workers supposedly

enjoy are overstated.

Wages are, indeed, higher for government workers than

for many private-sector employees who do comparable

work, but state workers also tend to be older and more

likely to have graduated from college.

According to a study by economists Keith Bender and John

Heywood comparing private- and public-sector workers’

compensation over the last 20 years, once variables like

age and education are factored in, state employees

earned 11 percent less and local workers earned 12

percent less than their private-sector counterparts.

According to Bender and Heywood, “Over the last 20

years, the earnings for state and local employees have

generally declined relative to comparable private sector


The primary target for the scapegoaters is public

employees’ retirement plans–which are, in fact,

stronger than most private-sector workers enjoy today.

But once again, there’s a lot of deception here. For one

thing, many government workers aren’t eligible for

Social Security benefits when they retire, so a pension

is the only thing they can count on when they stop


Then there’s a larger question to answer: What do

employers, whether the government or a corporation, owe

workers when they become too old to work? If the

policies of private companies are taken as the measuring

stick, the answer is: Nothing at all. Except in a few,

dwindling cases, pension plans have become a relic of

the past. As the Center for Economic and Policy

Research’s Dean Baker wrote:

The reality is that public pensions are better than

private pensions, but this is largely because most

private-sector workers have little or nothing by way of

pensions. With a few notable exceptions (police and fire

pensions, along with those of IMF economists, tend to be

very generous), most public-sector pensions do not

provide retirees with an especially high standard of


We believe that all workers deserve to be able to retire

without fearing whether they can make ends meet, or if

their savings in 401(k) investment plans will get

hammered the next time the stock market tanks. Every

worker deserves a Cadillac pension plan–nothing less.

– – – – – – – – – – – – – – – –

AN ARTICLE in the NewRepublic makes it clear what the

attack on public-sector workers is really about. Its

title: “Why Public Employees Are the New Welfare


In the 1980s, the Republican Reagan administration tried

to focus blame for the economic crisis on “lazy welfare

mothers” who supposedly drove around in Cadillacs

collecting big government checks.

The lies about “welfare queens” and wasteful government

spending on social programs to help the poor were part

of an ideological offensive–along with the claim that

overpaid union members were pushing Corporate America

into the poorhouse–that accompanied the attack by big

business on working class living standards.

The ruling class offensive to take back the economic and

social gains of the 1960s and early ’70s was carried out

on several interrelated fronts, ranging from national

politics, to factories and offices, to popular culture.

Key to this employers’ offensive was creating scapegoats

to divide workers–union and nonunion, unemployed and

employed, Black, Latino and white–so that big business

could rule them all.

Today, it’s lazy, overpaid government workers–and their

“Cadillac” retirement plans. And while politicians and

the media try to pit different workers against each

other, the real welfare cheats get off scot-free. As

Baker wrote, commenting on the Times article about the

“coming class war”:

It is more than a little bizarre, and arguably more than

a little offensive, that the NYT would publish an

explicit call for an attack on the pensions of millions

of workers who never earned more than $40,000 or $50,000

a year. This is in a country where people like Erskine

Bowles (the co-chair of President Obama’s deficit

commission) get $350,000 a year serving as a director of

a company (Morgan Stanley) that only exists today

because of the generosity of the Fed and the taxpayers

when they rescued it in its time of need.

Make no mistake, either–this is a bipartisan attack.

When the Democrats’ candidate for California governor,

Jerry Brown, last month voiced support for Arnold

Schwarzenegger’s budget-cutting proposals, including

raising the retirement age, he explained himself this

way: “I’m not going to blame public servants for

problems that have been created by Wall Street hedge

funds and mortgage sellers, but at the same time, as I

did as governor, I know when it’s time to tighten our


But today’s assault on public employees in the name of

“getting through the crisis” will make it that much

easier to attack private-sector workers and their

shrinking union membership. Local governments are going

after unions precisely when workers need all the

organization they can muster.

As New York Times economics columnist Paul Krugman


In effect, a large part of our political class is

showing its priorities: given the choice between asking

the richest 2 percent or so of Americans to go back to

paying the tax rates they paid during the Clinton-era

boom, or allowing the nation’s foundations to

crumble–literally in the case of roads, figuratively in

the case of education–they’re choosing the latter.

There is a class war–and the politicians are on the

wrong side. All workers have a stake in taking on the

American ruling establishment’s warped priorities–and

countering the myth of “greedy public-sector employees”

that is being used to divide us.

We can’t let the politicians sell the lie that

government workers are taking too much of the pie when

Corporate America has control of the whole bakery.

PortsideLabor aims to provide material of interest to

people on the left that will help them to interpret the

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About Mad Scientist

Member of California Association of Professional Scientists
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1 Response to Myth of the greedy public-sector workers

  1. Organian says:

    I am a California state worker with a professional degree which I earned in the late 1970s. At my current job, which I have held for about 8 years, I am nearly at the top of the salary scale for my classification, yet I make only about 2/3 of what a brand new graduate in my field can make in the private sector, and about 1/5 of what someone at my experience level makes. I work fewer hours, but I do an excellent job and I put in a full-time week. I expect my retirement benefits to make up for what I would have been able to save at private sector wage levels. Thanks for posting this.

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