Eye on the Pie and Opinion

MARCUS: The nightmare in my neighborhood

March 5, 2011

As I relaxed in my recliner, I pondered the surprise of February: the discovery of the most privileged elite in the United States—state and local government employees. Governors of Indiana and Wisconsin bravely revealed the evil perpetrated by this enormous cell of fiscal terrorists.

In case you missed it, many state and local government employees are unionized. It appears that unions force Americans to become arbitrary and authoritarian. People working in large organizations, banding together to negotiate the conditions under which they labor, destroy the harmony of the universe.

Now the virtuous, pressed into action by the realities of economic conditions, fight back. In response, grubby workers leave their posts as teachers, firefighters, health inspectors, geologists, medical workers and public safety officers to protest against noble efforts to reduce their influence, their pay and their dedication to public service.

A look at the facts will put this gallant charge into perspective. State and local government employees constitute 10.8 percent of all employed people in the nation. However, they receive 12.1 percent of the compensation, excluding capital gains. This gross imbalance also distorts the Indiana economy (10.7 and 11.5 percent, respectively) and is worse in Wisconsin (10.6 percent and 12.4 percent). 

Clearly, any group of workers with incomes in excess of their proportion in the economy are villains. The brave governors of Indiana and Wisconsin crusade for a world where all workers are paid the same (communism) or seek a world where the private sector dominates (fascism). I won’t believe this, but the evidence is before my eyes.

In Indiana, private-sector workers averaged $43,166 in salary in 2008 (the latest year for which data are available). State workers did better, at $45,930, and local government workers averaged an embarrassing $48,046. Why should we pay teachers with master’s degrees more than the sweating toilers flipping burgers?

Destruction of unions has been sought for decades by far-seeing Americans. Our nation strayed in 1935 when the federal Wagner Act allowed workers to join unions, which negotiate working rules as well as pay rates. Now, 76 years later, courageous leaders are mounting the long-awaited attack. Public-sector workers are too strong for the public good.

Yes, we want strong schools, buy why must we pay so much for them? Where is the spirit of public service? Yes, we want good police and fire services, but paying men and women above-average wages and pensions to perform difficult and dangerous jobs goes too far. Yes, we want good public hospitals, but do we need to pay taxes to support them? In fact, why can’t all public services be on a for-fee basis?

That’s the trouble with public services—they are provided free or at a small cost to the users, while the taxpayers get the bill. In this brave new world, let’s reduce taxes and use the model of our efficient and effective private sector: Charge user fees.

Education is the leading example. Let the families of students pay for schooling. Naturally, the poor will not be able to afford the services available to the rich, but if the poor really value education, they will find the money. Public hospitals should be the same. It is most evident that the rich and the poor are different. The rich are rich because they produce value for society while the poor, well, you know all about the poor—sloth.

When we treat all people alike, we defile and discourage our virtuous citizens. What reason does a person have to work if he can’t get a kidney faster than a social parasite? Hasn’t the time arrived to disband the stultifying superstructure of … ?

Do I hear a crying baby? No, it’s the cat on my lap. I’ve fallen asleep and had another of those right-wing nightmares.•

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Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.

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