Opinion and Economic Analysis and Government

HICKS: Smart cuts won't hit all government workers

July 7, 2012

Over the coming decade, governments across the country are going to slim down. The structure of government spending argues that almost all the cuts will come from either government payrolls or entitlement spending. Even eliminating all infrastructure and military spending—two bad (but not unimaginably bad) ideas—wouldn’t be enough to spare public employees, so it is helpful to analyze who these workers are and what they do.

In the interest of full disclosure, I must say that my most meaningful employment has been in government. While I have successfully dabbled in the private sector, from my days working the Youth Conservation Corps (at age 17), as a GS-2 supervisor of 10 workers (at age 18), through 28 years as a soldier, as a professor at four universities, and as an appointed official of both Democratic and Republican governors in two states, I am a beast of the public sector.

I know and appreciate many things government can do. Still, it is useful to categorize government employees into three types based on the private-sector job comparisons available. It is often argued that government workers are overpaid and over-benefited. That may be so, but I consider the composition of the government work force a more pressing matter in making smart cuts.

The first type of public employees is those necessitated by the Constitution. Elected officials and public safety workers—firefighters, police and soldiers—are the best example. Their pay and benefits largely should be tied to the market. Can we hire and keep enough of the right types of men and women for these jobs?

The second group of workers is those who do jobs with some private-sector equivalent (say professor or computer network specialist), but who work in areas in which government clearly has a role, such as education or disbursement of driver’s licenses. Again, here it is a market flush with private-sector competition where wages and benefits should be set.

Finally, we have government workers who directly compete with the private sector. These activities include the collection of trash; the operation of public facilities; and dining, printing and other services for which the private sector has many robust and generally cheaper alternatives.

For the first two types of government employees, the number we employ should change primarily with need balanced by budgets. Greater specificity than that is dishonest because state and local conditions and the threat to public safety vary widely.

However, it is time to reduce the ranks of the third type of government worker. Few governments, and none in Indiana, can now afford to continue doing things the private sector does. Effectively shrinking government spending requires us to figure out what government should and should not do.

Anything done well by a business should be kept out of government.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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