The relationship of government employees to the private sector

There is a problem inherent in all government - the motivational factors that control private enterprise are not present in government enterprise.

In private enterprise the funds available for salaries are dependent on how well you do what you do.  If you are successful at the enterprise generally you generate more income.  If you make bad decisions or lose focus on what you need to do that fact will be brought to your attention by a loss of income as customers turn elsewhere.

But by its nature government decides how much money government needs and then assesses taxes or fees to produce the money and then decides how to spend the money.

We are all familiar with the most glaring examples of this tendency - dictatorships around the world where the government primarily serves to enrich those in control.  But even democracies have the same problem.  We are experiencing that fact right now with much of the developed world wrapped up in huge budgetary problems due to the tendency of governments seeking to remain in power to be reluctant to tax, but happy to hand out benefits to public employees who are potential voters.

Here is a statistic I find illustrative of the problem.  According to census bureau figures the Metropolitan area with the highest household income in the country is - Washington D.C.  What puts Washington above even Silicon Valley?  Well for starters the average federal employee makes more than $126,000 a year in combined salary and benefits.   Couple that with the fact the town is full of lawyers (1 in every 12 city residents is a lawyer) and that government work is very lucrative (young attorneys make an average of $186,000 a year in Washington compared to the national average of $123,000).

Here is what makes sense to me.  We should be lobbying at the local, state and national level for a Charter or Constitutional amendment that links the salary and benefits of government jobs to the average salary and benefits in the private sector.  Say 98% of the private sector average for equivalent work.  We also cap government salary at some multiple of the average private sector salary, rather than allowing government managers to drive their pay up to extraordinary levels by comparing themselves to salaries in the private sector.

Despite what economist think, not all people are motivated by money.  Many people, once they have achieved a basic level of economic comfort and security, are motivated by service, by the opportunity to do good things for others.  Those are the people we want in government, and they sometimes get pushed aside by people motivated by money.  Let those motivated by money pursue their ambitions in the private sector.

(Statistics taken from a Bloomberg News Article published in the San Francisco Chronicle business section, page D5, October 20, 2011)