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Indiana becomes a Midwestern alternative to the southern states.
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Between 1950 and about 1980, average compensation in the public and private sectors moved in lockstep. But after 1980, public sector compensation growth began to outpace private sector compensation growth, and by the mid-1990s public sector workers had a substantial pay advantage. In the boom years of the late-1990s, private sector workers closed the gap a bit, but public sector pay moved ahead again in the 2000s.
The public sector pay advantage is most pronounced in benefits. Bureau of Economic Analysis data show that average compensation in the private sector was $59,909 in 2008, including $50,028 in wages and $9,881 in benefits. Average compensation in the public sector was $67,812, including $52,051 in wages and $15,761 in benefits.
Bureau of Labor Statistics data, however, “show a much larger gap between average public and average private sector compensation than the BEA data. In June 2009, total compensation per hour was $39.66 in the public sector, which was 45 percent greater than the average $27.42 per hour in the private sector. The public sector advantage in average wages was 34 percent, while the advantage in benefits was a huge 70 percent.”
Democratic politicians spend taxpayers’ money to buy votes of public sector union members and to maximize political contributions from those unions. They got away with it while the nation’s economy was booming, while we were all “fat and happy.” But despite the concentrated benefits and diffuse costs explained by public choice theory, when times are tough people notice their tax bills and they begrudge public sector employees who complain about not getting raises but rarely worry about losing the jobs that the rest of us pay for. So with unemployment stubbornly above 8 percent, with the so many Americans having to cut back on spending as they watch the values of their homes and savings decline, with a new level of public awareness of overspending and wastefulness at all levels of government, people have woken up to the predatory fleecing of citizens by unions and their Democrat enablers.
In other words, public choice theory suggests that if 50,000 people each pay $1 that goes to fund one government employee, the employee (and her union) will fight for that money whereas it’s not worth the taxpayers’ time to arm-wrestle with government for $1. But in times like this, we do in fact care about the $1, and when there are enough citizens together willing to fight for our dollars, we can become as motivated and perhaps as powerful as the unions and other special interests.
When a truly “swing state” like Indiana can pass a right-to-work law, when a “blue state” like Wisconsin can elect a Republican governor who goes after public sector unions head-on, and when Virginia can eliminate PLAs from public sector construction projects, it is a welcome sign that labor pains are increasing. The weakening of unions, public sector even more than private sector, is the most important policy goal that state governments should have if their aim is the solvency of their budgets and the prosperity of their citizens.
Nothing will give politicians the courage to take on unions who will continue to behave like wounded animals backed into a corner as much as the success of the courageous politicians who are already taking the political, and even physical, risk of doing the right thing.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?