Sunroom Desk

The week before California’s special election on the budget propositions, while study sessions in Glendale city council chambers reviewed city departments’ budgets and staffing, articles under the Paperweight focused on national entitlements, public sector employee unions, and taxes.

The New York Times wondered how President Obama can avoid national insolvency while increasing health care entitlements, while USA Today wonders whether either party, or Congress as an institution, “is capable of addressing the nation’s dire fiscal circumstances, which will only worsen as Baby Boomers hit retirement age.”

Mother Jones suggests expanding the federal safety net, increasing Social Security payments, and lowering Social Security and Medicare eligibility ages to 55, while reducing the payroll tax burden. How will we pay for such a dramatic increase in benefits? The article doesn’t address this question, except to state that:

…Social Security and Medicare should be treated as the bonded obligations of the government—like net interest—thus making explicit what is obvious, which is that these programs cannot go “bankrupt” any more than the government itself can.

Another view, by Robert Reich, is that Social Security costs are manageable, while Medicare costs are not.

The LA Times covered Arnold Schwarznegger’s budget disaster-preparedness talks last week, while the Wall Street Journal framed government budgets as a taxpayers vs. public-sector unions fight. The facts and numbers in this last article resonate in California and in Glendale, where activists have deplored the growth in city salaries and city employee union influence:

Today, public-sector unions sit atop lists of organizations that devote the most money to lobbying and campaign contributions.

…in California, unions spent more than $50 million in 2005 to defeat a series of ballot proposals that would have capped growth in the state’s budget. Now the state’s teachers union is putting its clout behind a ballot initiative, to be voted on next week, that would restore more than $9 billion in educational spending cut from the state’s budget.

The results of such efforts are evident in the rich rewards that public-sector employees now enjoy. A study in 2005 by the nonpartisan Employee Benefit Research Institute estimated that the average public-sector worker earned 46% more in salary and benefits than comparable private-sector workers. The gap has only continued to grow. For example, state and local worker pay and benefits rose 3.1% in the last year, compared to 1.9% in the private sector, according to the Bureau of Labor Statistics (BLS).

But the real power of the public sector is showing through in this economic crisis. Some five million private-sector workers have lost their jobs in the last year alone, and their unemployment rate is above 9% according to the BLS. By contrast, public-sector employment has grown in virtually every month of the recession, and the jobless rate for government workers is a mere 2.8%. For anyone who thinks such low unemployment numbers are good news, remember that the bulging public sector must be paid for with revenues that most governments don’t currently have.