Saturday, July 24, 2010

Government Salaries

July 2010. Voters often have little knowledge or control over Government salaries.According to the U.S. Bureau of Labor Statistics, the average weekly salary of the American Worker as of January 2010 is $629.04, or $32,708.10 per year.

News reports have revealed the City Manager of the City of Bell, California, makes nearly $800,000 a year. Bell is a relatively small city in greater Los Angeles. The city population is 36,000 people. Other city employees have salaries of hundreds of thousands of dollars a year, and many have six figure pensions when they chose to retire.

Famously the City of Vallejo, California, with a population of about 124,000, went into bankruptcy a couple years ago and it was revealed somewhere around 150 city employees received over $100,000 a year in salaries, plus very generous pensions and benefits, with a number of city employees, and some nurses and public safety personnel making over $200,000 a year not counting pensions and benefits.

The controls over public sector salaries often don't work. The employees who want to make more money have knowledge, access and influence over the local legislative bodies. The local legislators want to get reelected so they work to please the most vocal and aware voters. It is almost impossible for voters to control public sector salaries as they have little time, little or no information, and it is inherently difficult to measure productivity in many government jobs since there is no bottom line to measure against.

Government is important, but the private sector is what creates wealth.

Government should function as a service where the employees are motivated primarily by the desire to help people, not by the desire to make money. But the notion of "public service" has become an argument for higher salaries, rather than a measure of something forgone to serve the public. Government jobs already tend to provide more stability than private sector jobs because of the ongoing nature of government responsibilities. People who are motivated primarily by making a lot of money should not be working for the government.

The lack of working controls over Government salaries has resulted in many people who are primarily motivated by making money moving into, or staying in public employment. Even people who started out in Government motivated by a desire to do "public service" may stay in Government later in life after their focus becomes more on making money. They use their knowledge of government to find a way to squeeze more money out of government. The system should be set up so people who are primarily motivated by money move into the private sector.

Conclusion? Perhaps Government salaries and benefits should be limited by law to schedules measured by the average private sector salary/benefits in that region. The schedules should be set so Government workers who reach a point in their life where they want to make more money will move into the private sector. No government employee should make more that 3 or 4 times the average private sector salary.

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