From USA Today:
Mitt Romney’s spending plan includes a pledge to “align federal employee compensation with the private sector,” and it cites studies showing that “federal compensation exceeds private sector levels by as much as 30 to 40 percent when benefits are taken into account. This must be corrected.”
As far as President Obama’s campaign is concerned, that means Romney is talking about a federal pay cut of up to 40%.
“To pay for tax cuts for millionaires and billionaires, (Romney) drastically cuts pay for the men and women who secure our borders and skies, enforce our laws, inspect our food and search for better treatments and cures,” said Obama spokesman Adam Fetcher.
Do federal employees really earn up to 40% more than the private sector?
The short answer is yes. According to the Congressional Budget Office, federal employees average only about 2% more in actual pay, but they have better benefits, about 48% better on average.
The wage and benefits discrepancies are not across the board, however. Both wages and benefits are significantly better for those without a college education who choose a life in civil service. For those with graduate degrees, they are taking a cut in benefits, when compared to the private sector.
Here’s the chart:
Who are these federal employees?
For Romney to implement this plan with any significant savings, it would mean that much of that money would be coming out of the pockets of those serving in the military.
The vast majority (63%) are employed by the Department of Defense. The second largest agency is the post office, at just 15%. Of the 3.2 million DOD employees, nearly half are active duty military personnel.
The implementation of Romney’s plan would be especially hard on military personnel and their families. It would also have a lasting negative impact on the military’s ability to recruit. Benefit cuts to military personnel would presumably include cuts to the GI Bill, a program which helps veterans obtain an education, making them more valuable to the workforce.
Why do federal employees have better benefits?
30 years ago, the types of benefits enjoyed by the public sector were pretty much the norm. However, as people have lost the ability to represent their own interests at work, through unionization, both wages and benefits have taken a dramatic hit. On the other end of the spectrum, CEO compensation has dramatically risen.
Benefits are becoming a thing of the past for many companies. Small companies, who employ nearly half of the nation’s workers, are the least likely to offer any benefits at all, meaning that people lose pay if they stay home with the flu. They are less likely to have health insurance, meaning the taxpayers could be stuck with the bill if an employee were to become seriously ill. They are also least likely to have any sort of retirement package.
Then there’s the nation’s largest private sector employer, Walmart. Not only has Walmart’s outsourcing been a major contributor to our nation’s unemployment woes, it so overwhelmingly underpays and under-benefits their employees, that they become taxpayer burdens. Only 43% of Walmart employees even have health insurance. Their sick pay policy is atrocious, meaning there’s a fairly good chance that the person stocking your lettuce or the person ringing up your purchases could be exposing you to a communicable disease.
This, apparently, is what Romney would consider the model for public sector employment.
Do those sort of cuts work?
Since the start of the recession, we’ve heard a lot of talk of austerity. Budget cuts, especially payroll cuts, are perhaps the worst way to pull us out of a financial slump. The European Union has had a harder time pulling out of the recession than the United States. Much of that is because of their strict austerity measures.
The reasoning is simple. Our economy is largely consumer driven. If people have money in their pockets, they spend, helping businesses flourish. People with money to spend also pay more in taxes, driving revenue.
Romney’s plan has been tried before. Roosevelt tried budget cuts and austerity. It put the country back into a recession. It is only with deficit spending that the economy will be stimulated back to growth.
The GOP likes to reminisce to a time when the nuclear family was the norm, a time before anyone knew the term “latchkey kid,” a time when dinners were made in the kitchen of the home instead of the grills and heat lamps of McDonalds. However, one key component of that GOP fantasy is left out. During those “glory days” (days that were pre-civil rights, pre-women’s rights, pre-gay rights), a single paycheck covered the bills. It put a car in the garage of a three bedroom home. It provided for a quality education. Mothers could stay home with their kids.
Instead of returning us to a time when workers are paid well enough to support the American dream, Romney would like to see a military where spouses are forced to work, despite the fact that military families rarely stay in one place for very long. He wants to cut military pay, while doing nothing about the pay of military contractors.
Romney’s vision of America is not one of families and traditional values, it’s one of serfdom and worker poverty.