A Further Perspective

The Fairness Initiative

It's about time government employees learned they work for taxpayers.

By 10.5.10

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Kudos to USA Today, that most mainstream of all major media, for reminding us who "we" are. In an enterprising and courageous story published in August, the paper reported that the average U.S. private-sector worker receives $61,051 in compensation while the average U.S. government worker receives $123,049. I say "enterprising" because that latter figure, The Number we've all been looking for, has been a closely guarded secret for decades, more effectively guarded, manifestly, than most of the nation's military secrets. To tease The Number out of data designed to obscure it was a remarkable piece of journalism, an old-school, First Amendment-justifying "talking story." And I say "courageous" because the paper was predictably attacked by agents of the bureaucracy, who variously alleged error, irresponsibility, base motivation, and bad manners. Even in the media doldrums of late-summer, the constituency for big government recognized a mortal threat and lumbered on to the field to combat it.    

Let's look first at the nature of the threat and then at the campaign to defuse it. For most of our history, the reigning metaphor for government employment has been "public service." Embedded deep in the national imagination is the notion that a government job is the kind of work to which a responsible citizen is occasionally called, usually on a temporary basis, and for which he is expected to sacrifice not only creature comfort but also family time and the disruption of professional development. Although it is sometimes an adventure, that is, government work has traditionally been perceived as more duty than job, with Cincinnatus arrived reluctantly in town but still glancing longingly back at the plow.  (In my own short stints in government, I was told by recruiters to expect sharp cuts in my paycheck and, on this particular commitment at least, the government delivered in full. That was a political generation ago, however, before the Bushes and Clinton managed to rebrand the old liberalism as big-government conservatism.)

Most Americans, despite accumulating evidence to the contrary, have liked to believe that our public servants are high-minded sorts willing to serve the community at some economic cost to themselves; the kind of people who went into government, we liked to think, were in some ways like pastors or nurses or those nice people down at Goodwill Industries, most of whom seemed to be answering to spiritual vocation rather than material incentive. What USA Today did with the publication of The Number was to explode the central myth of democratic governance: namely, that taxpayers are the masters and bureaucrats the servants. What became sunrise-clear as The Number was passed from barber shop to lunch counter to factory floor to yoga class was that our public servants are paying themselves twice as much as we have managed to keep for ourselves… after paying them. Without our notice, it has now been universally noticed, our public servants have been giving themselves quiet raises all these years, tweaking  benefits, fattening pensions. Without our notice, they have been adding hundreds of thousands of new employees to their own ranks even as we taxpayers faced layoffs and cuts and freezes and closings: as we tightened our belts, they loosened theirs. The question has now re-formed itself in the national imagination: who, exactly, is working for whom?

In the aftershock of The Number, then, just who are "we"? We are the people who got snookered by the myth of public service, that much is clear. Confessedly, we are also the people who let the bureaucracy run wild. But we remain the people who have the power to redress this new and unacceptable situation. It says so right there in the Constitution, doesn't it? (I checked. There's nothing in there about bureaucrats being spared discomfort in an economic downturn.)  That's what it says all right, but the pertinent questions for this historical moment are not so much formal as procedural. Do enough of us still live and work beyond the reach of the bureaucracy? Do we citizen-taxpayers still have the raw numbers to survive a democratic showdown with the governing class and its political arm, the dependency class? And even if our numbers are sufficient to the task, can we muster the will to resist the encircling and stifling forces of statism? Read any blog, listen to any talk show and you know that many of our fellow citizens sense that we are approaching a Gladwellian tipping point, the point beyond which we would be incapable of reclaiming a vigorously free society. Just where are we on that graph -- are we still on the near side of the tipping point, the side from which we could still recoil and recover? Or have we just passed over to the far side, the side from which we would have no choice but to slog numbly toward the fading light of the American day?

Return for a moment to the attack on The Number itself. The most widely sprayed rhetorical pesticide was this: The Number misinterprets statistical reality by ignoring the fact that government workers are, on average, considerably older than private-sector workers: it would be only natural for older workers, with greater seniority, to earn more than younger workers. That's axiomatic, of course, but it's tautological as well. One of the reasons that government workers are older is that government work is the kind of work that older workers can do. (Shuffling papers from an ergonomic chair, it's been reliably reported, puts little strain on the lower back.) The other reason that government workers are so much older than the rest of us is that they are a static workforce, happily cemented in their privileged positions. They are rarely hired away, they are almost never fired, they are rewarded for immobility by steadily escalating compensation and, off at the end, they elide into a pension system so rich that many of them will ultimately make more for staying home in retirement than they made back at the office. Indeed, now that these "defined-benefit," income-for-life pensions have all but disappeared from the private sector, public-employee pensions have become an open scandal. Let's be clear about what's happened: after it became clear that taxpayers could no longer afford to pay for their own pensions, they were compelled to pay for government pensions. That would seem to settle the question of who is working for whom.

The other argument launched frequently against The Number is that USA Today's analysis was simpleminded, almost risibly so, in that it compared apples not even to oranges but to nectarines. Government jobs, the experts assure us, are not fungible with private-sector jobs and valid comparisons are thus impossible to draw. To which the answer from outside the Beltway echo chamber would be: "No problem. We'll handle it." No two jobs are identical in the private-sector, either, but every HR director at every private company is obliged to make defensible comparisons. That's what HR people do in the real world. They develop benchmarks and comparables, which is to say that they define with some precision the relationships among apples, oranges and nectarines. And if they happen upon a particularly novel or recondite question, they call in one of a dozen world-class management consulting firms, any one of which would be delighted to provide the same service to government. What is risible is the idea that our government considers the task of evaluating its employees so analytically daunting that, just to be safe, it has resolved to overpay all but the senior-most executives. It should be understood that men and women with significant HR experience share a presumption that government employment data do not in fact defy analysis, and the further presumption that, once that data is comprehensively analyzed, it is highly unlikely that the average government worker will be demonstrated to have been twice as productive as the average private-sector worker.

For a brief shining moment in late August, the big-government noise machine floated a third argument in rebuttal to The Number. It was snatched back so quickly that we barely caught a glimpse of it, but the gist of the argument was -- "we deserve it." The rationale for the compensation premium advanced in that moment of unguarded candor was that because the government worker is (a) older, (b) better educated, and (c) engaged in more difficult work than the average citizen -- because he's a member of the clerisy, if you will -- he should be paid twice as much. Adult PR supervision was soon imposed (it's considered bad form just before a contentious election for bureaucrats to be caught chanting at voters, "we're better than you are") and so the argument was never allowed to take full form. Its brief appearance, however, revealed still another dimension of the problem with our governing class. Because of the high pay, rich benefits, and scandalous pension payouts -- because government employment is now so financially attractive -- government is becoming in these bleak economic times an employer of first resort. As such, it is beginning to attract, if not yet the best and the brightest, many people who could have succeeded in the private sector and would have elected to do so in more economically secure times. The result on a macro-economic level is that our government is beginning to outbid the private sector for the scarce resources of brains and talent. That development is unwelcome in any form of market-based economy.    

A still-larger presumption upon which HR professionals would agree is that the government workforce is "thick in the middle." Here's a translation of the jargon. You will have noticed the almost daily "earnings surprises" reported in the business press over the summer, those blurbs on quarterly earnings results that "exceed analysts' expectations." Virtually none of those upside surprises was the result of sharply increasing revenues. Across the board, sales are flat to weak. Almost all of the earnings gains reflect, rather, cost-cutting initiatives and improved productivity. Granted, it seems counterintuitive: sagging sales and booming profits. How have American companies managed to perform so well, at least on the bottom line? Companies both public and private, slowly at first and then in hurry-up mode following the 2008 crash, have innovated in many ways but primarily by embracing the digital revolution to thin the ranks of middle management. Corporate America is now lean and mean, thin in the middle, with a few real decision-makers at the top directing the real workers who produce the product or provide the service on the front lines. Middle management has simply gone away and the resulting savings have fallen to the bottom line. (Maybe you've noticed: nobody admits to being a middle manager any longer. It can be hazardous to your corporate health.)

Government, as we have seen, responded differently to hard times. It ignored them. It continued to swell its ranks, continued to ratchet up its wage scales, continued to leave the digital opportunity largely unrealized and continued to send bigger and bigger bills to the taxpayers. Now that the winds of digital change have blown through almost all of corporate America and much of nonprofit America, the government stands as the last refuge of the middle manager, the kind of "executive" whose job description is speckled with one or more of the telltale slacker nouns: liaison, outreach, coordination, review, interface, feedback, schedule, assistance, oversight and the like -- i.e., the functions most taxpayers perform in their spare time on a PC.

The hour is late. Both time and trend work against the citizen-taxpayer. Day after day, the governing class expands incrementally, inexorably, uncontestedly. They control the data, set the budgets, publish the timetables, and enforce the rules. If there's any smart money still around, it would have to like the chances of the governing class over against what remains of the freedom class; the former steadily gains strength even as the latter watches its own leech away.  All of which, in my view, argues for an early division of the house, an early headcount of just how many of our fellow citizens will stand with the freedom class. All of which argues for a citizen initiative that would declare straightforwardly: It shall be the policy of government at every level to cap public-sector wages and benefits at private-sector comparables. This new policy would restore a measure of balance to the relationship between the citizen and his government; when the economy heads into choppy waters, we would all be in the same boat. It would establish the principle in equity that taxpayers and the people who work for them should receive equal pay for equal work. It would free up critical resources for the private sector to re-stock the national economy. And it could be set in motion without delay. Senior government officials -- mayors, county executives, governors, even the President -- could in many cases start the process by executive order. We could begin the transition period immediately. We could call this new policy the Fairness Initiative.

The legendary British marketing guru Maurice Saatchi remarked some years ago that "America's one-word (brand) equity is 'freedom'." In a language with 750,000 words, he noted, that's a priceless asset. How much is it worth today? 

 

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About the Author
Neal B. Freeman is chairman of the Blackwell Corporation.