IBJOpinion

MARCUS: The nightmare in my neighborhood

Morton Marcus
March 5, 2011
Back to TopCommentsE-mailPrintBookmark and Share
Morton Marcus

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.•

__________

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

  4. GOOD DAY to you I am Mr Howell Henry, a Reputable, Legitimate & an accredited money Lender. I loan money out to individuals in need of financial assistance. Do you have a bad credit or are you in need of money to pay bills? i want to use this medium to inform you that i render reliable beneficiary assistance as I'll be glad to offer you a loan at 2% interest rate to reliable individuals. Services Rendered include: *Refinance *Home Improvement *Inventor Loans *Auto Loans *Debt Consolidation *Horse Loans *Line of Credit *Second Mortgage *Business Loans *Personal Loans *International Loans. Please write back if interested. Upon Response, you'll be mailed a Loan application form to fill. (No social security and no credit check, 100% Guaranteed!) I Look forward permitting me to be of service to you. You can contact me via e-mail howellhenryloanfirm@gmail.com Yours Sincerely MR Howell Henry(MD)

  5. It is sad to see these races not have a full attendance. The Indy Car races are so much more exciting than Nascar. It seems to me the commenters here are still a little upset with Tony George from a move he made 20 years ago. It was his decision to make, not yours. He lost his position over it. But I believe the problem in all pro sports is the escalating price of admission. In todays economy, people have to pay much more for food and gas. The average fan cannot attend many events anymore. It's gotten priced out of most peoples budgets.

ADVERTISEMENT