The Private Sector Now Serves the Public Workers, the Privileged Elite

The ruling elite have flipped the script: the private sector now services the public sector. The majority of world citizens have been conditioned to depend on government and to desire even larger and more intrusive government. The ruling elite have amassed for themselves an obedient and loyal group of people, dependent on government. The governments of the world are uniting to form the anti-Christian world system, the consummate beast described in the book of Revelation. And the socialists who support and admire this system are the deceived with the mark of the beast.

Jobs Returning — But Good Ones Not So Much

Someone has to service the public sector, America's last source of middle class.

March 9, 2011

The Lookout - When it comes to jobs, it's not just quantity that matters--it's also quality. It's great news that the economy is finally producing jobs again--even if it'll take another few years of this kind of growth to get us back to where we were before the Great Recession. But that also means it's now time to ask what kind of jobs are being created. And on that front, things are a lot less encouraging.

Several recent studies suggest that the new jobs pay less and offer fewer work hours than the ones they have replaced. Let's look at the numbers:

• Lower-wage industries -- things like retail and food preparation -- accounted for 23 percent of the jobs lost during the recession, but 49 percent of the jobs gained over the last year, a recent study (pdf) by the National Employment Law Program found. Higher-wage industries, by contrast, accounted for 40 percent of the jobs lost, but just 14 percent of the jobs gained. In other words, low paying jobs are increasing as a percentage of total jobs, while high-paying jobs are on the decline.


• Meanwhile, the percentage of those working who have part-time jobs and want full-time ones surged in mid-February to 19.6 percent -- almost as high as it was a year ago before the recovery began, according to Gallup numbers. That suggests, of course, that a large number of the new jobs created over the last year are part-time.


• And a recent Wall Street Journal analysis found that even though productivity rose 5.2 percent from mid 2009 to the end of 2010, wages increased by just 0.3 percent. That means only 6 percent of productivity gains were shared with workers. In past recoveries, that figure has averaged 58 percent. This time around, far more of the gains went to shareholders, in the form of profits, which are at record levels.

There are no easy answers for how to fix the problem. Some argue that workers need more clout in their relationship with employers, something that would require a renaissance of private-sector labor unions, which have been on the decline for the last half-century. But that prospect looks unlikely: Indeed efforts are underway in several states to make public-sector unions as weak as their private-sector counterparts. [Editor's Note: The federal sector, most especially the military, is still protected for now — see next story.]

Still, as the economy continues to add jobs in the coming months, it's worth keeping the issue of quality in mind. An economy with a glut of low-paying and part-time jobs isn't an economy that's working for most Americans.

OPM's Berry Grilled by Lawmakers on Federal Pay Freeze

Corporations have been moving away in massive numbers from the defined benefit programs that governments had emulated. In 2008, just 48,000 companies in the U.S. offered pension programs -- down from 150,000 in 1988. Instead of maintaining costly pensions and committing to a lifetime of defined benefits for retirees, companies contributed to mobile retirement accounts, such as 401(k)s. The nation's workforce has also changed. By January 2010, for the first time, public employees made up the largest percentage of union workers. Several recent studies show that at least some public employees now make more than their private-sector counterparts, although that is not true across the board. - Star Tribune, Public Pay, Benefits Set Off New 'Civil War', February 13, 2011

Low-wage public-sector workers also had better access to retirement plans: 74% were eligible, compared with 40% in the private sector. - The Public Sector “Haves” Get Richer Benefits Too…, The Swine Line, July 28, 2010
March 9, 2011

govexec.com - The federal government should not impose an across-the-board employee pay freeze or cut, according to think tank analysts who believe civil servants on average receive compensation more generous than that of their private sector counterparts.

President Obama has called for an overall two-year pay freeze for federal employees, but such measures "would unfairly penalize those federal employees who are not overpaid while still leaving others with premium wages," said James Sherk, senior policy analyst in labor economics at the Heritage Foundation, a conservative think tank in Washington.

Sherk's comments were part of his written testimony for a Wednesday afternoon hearing on Capitol Hill comparing the compensation packages of government and private sector workers.

Lawmakers at the highly anticipated House hearing also questioned the purpose of an Obama pay freeze, but for different reasons. Rep. Jason Chaffetz, R-Utah, peppered Office of Personnel Management Director John Berry with questions and statistics on the net increase of federal employees from 2008 to 2010, bonuses and step increases for some civil servants, and whether the pay freeze as proposed actually would save any money. Berry defended the freeze as a cost-saving measure, and noted most of the awards for federal employees amounted to less than $1,000 per worker.

Full committee Chairman Darrell Issa, R-Calif., followed up on some of Chaffetz's questions. Issa asked Berry whether a freeze on within-grade, or step increases, was possible for this year to make the president's freeze a "real one." Berry said he did not think that was possible at the moment, and defended within-grade increases as a "natural progression" for federal workers.

Calling civil servants "good, hardworking people," Berry offered a vigorous defense of federal employees' pay and benefits.

"Raw comparisons of average pay between federal and private sector employees mask important differences in the skill levels, complexity of work, scope of responsibility, size of organization, location, experience level, and special requirements, as well as exposure to personal danger."

The hearing continued a debate that came to the fore during the 2010 election season over whether federal employees are overpaid, or in the view of some, underpaid. According to OPM data, the average salary for federal employees was $74,311 in 2010 compared with $50,462 for the average private sector worker -- a statistic cited by Rep. Dennis Ross, R-Fla., chairman of the House Oversight and Government Reform Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy.

Rep. Elijah Cummings, D-Md., said during the hearing:

"I am tired of these federal employees being beaten up. It pains me."

The American Enterprise Institute held a conference call with reporters Wednesday morning featuring analysts who echoed Sherk's ideas about an across-the-board pay freeze.

"We are not keen on the across-the-board pay freeze or any pay cut," said Andrew Biggs, a resident scholar at AEI who also has conducted an analysis of public and private sector compensation and who also testified at Wednesday's hearing.

Biggs argued that overall when looking at salaries, benefits and job security, federal workers' total package is worth 39 percent more, or nearly $60 billion annually, than the total compensation for private sector workers. But it's federal employees at the lower and middle rungs of the career ladder who typically earn more than those in the private sector, while civil servants at the top of the pay scale receive a smaller pay premium, or earn even less, than their industry counterparts.

Biggs said pay freezes and other such "one-time adjustments" won't help bring federal compensation more in line with private salaries and benefits. Greater flexibility in hiring and firing will help the government place a higher premium on performance and reward workers for their productivity more so than their longevity.

Sherk, whose research found that federal employees on average earn hourly wages 22 percent higher than those of their private sector counterparts, said the government should get rid of the General Schedule pay system and create a pay-for-performance model more closely tied to market forces. He also said the government should outsource as much work as possible.

"These steps would equitably bring the wages of federal workers in line with those of the private sector workers whose taxes fund their salaries," Sherk said, asserting that these measures would cut $47 billion from the deficit this year.

At issue is the methodology used to support the arguments on both sides. Labor economists use a "human capital" comparison that takes into account how certain characteristics such as experience and education affect workers' pay. The government, in the form of the President's Pay Agent, compares comparable jobs in the public and private sectors.

"They compare the real GS-13 to the alleged GS-13 in the private sector," said Jason Richwine, senior policy analyst of empirical studies at Heritage, during the conference call.

Richwine worked with Biggs on the compensation analysis. The most recent estimate from the President's Pay Agent is that federal employees earn 24 percent less on average than those in the private sector.

The President's Pay Agent has expressed concern with its methodology, as did Office of Personnel Management Director John Berry in his written testimony on Wednesday before the committee. Berry said the approach should be re-examined to ensure the most accurate comparisons, pointing out that neither the methodology nor the government's pay structure is ideal.

"We are required by law to reduce the comparisons of all the federal and nonfederal occupations and geographic regions down to one number. This does not reflect the complexity of the world we live in."

Colleen Kelley, president of the National Treasury Employees Union, questioned the reliability of research that concludes that federal employees are overpaid compared with private sector workers.

"They are putting forth self-serving, self-created data, while we are referring to data from an independent, nonpartisan, credible source," Kelley said, citing the Bureau of Labor Statistics, which the President's Pay Agent uses in its analysis.

She also pointed out that federal employees contribute a greater share of their income to their health care plan than do most private sector workers.

Kelley also commented on the current climate for federal employees.

"They are seeing proposals every day to expand and extend that [pay] freeze," she said. "They are reading about efforts to cut the retirement benefits they have spent years earning and have seen proposals to require unpaid furloughs. They are being called lazy, selfish and greedy. Sometimes, even by members of this body, who earn much, much more than they do."

House Votes Down Issa Amendment Canceling Step Increases

February 19, 2011

Federal Times - The House late last night defeated an amendment from Rep. Darrell Issa that would have canceled step increases for hundreds of thousands of General Schedule employees for the rest of the fiscal year.

The 191-230 vote came shortly before 2 a.m., and only one Democrat voted for it. Rep. Todd Rokita’s amendments, which would have canceled other federal raises and forbid federal employees from engaging in union activities while on the job, didn’t come up for a vote.

The House passed the spending bill, which slashes agency budgets and aims to cut more than $60 billion from the deficit, at 4:35 a.m. on a largely party-line vote.