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Pay Day

Bloomberg today has an astounding report on how workers have been able to abuse compensation systems in various states:

Nine years ago, California Democrat Gray Davis became the first U.S. governor in 82 years to be recalled by voters. The state’s 20 million taxpayers still bear the cost of his four years and 10 months on the job.

Davis escalated salaries and benefits for 164,000 state workers, including a 34 percent raise for prison guards, the first of a series of steps in which he and successors saddled California with a legacy of dysfunction. Today, the state’s highest-paid employees make far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base pay to overtime.

Payroll data compiled by Bloomberg on 1.4 million public employees in the 12 most populous states show that California has set a pattern of lax management, inefficient operations and out-of-control costs. From coast to coast, states are cutting funding for schools, public safety and the poor as they struggle with fallout left by politicians who made pay-and-pension promises that taxpayers couldn’t afford.

It’s not just California. Pension managers are among the worst. In Texas, the head of the Teacher Retirement System was paid over a million dollars last year. Psychiatrists are making $300,000 per year. They even have a few police officers netting nearly $200,000 in compensation.

Look, I think state workers should be paid reasonably. And, on balance, they are. Cato’s research has shown that while federal employee compensation is massively in excess of industry standards, state employees are closer (although with generous benefits and greater job security). But the system of overtime, unused leave and pension spiking, combined with a basic lack of supervision, have created a situation where certain individuals can collect gigantic salaries. In California, one psychiatrist claimed he was working 17 hours a day and pulled in $822,302 in 2011.

You really need to read the whole thing. We are talking about billions and billions of dollars here. From states that are having to slash extant services to feed the pension and perks beast. It’s a disgrace. And everyone — from conservative who hate government spending to liberals who want government spending to help people — should be up in arms about it.

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  1. Argive says:

    It’s all too common for mayors and governors to pass generous pension and perks deals destined to kick in long down the road. The politician gets the credit but someone else has to deal with the budgetary mess.

    Cato’s research has shown that while federal employee compensation is massively in excess of industry standards, state employees are closer (although with generous benefits and greater job security).

    This is a little off topic, but I think it’s important to remember that federal civilian employee pay scales (to the best of my knowledge) have a high floor and a low ceiling. Basically when you work for the federal government, you do well, but the sky is most definitely not the limit. Once you’ve reached the top of the federal pay scale, you can still be promoted and given more responsibilities, but with no corresponding increase in pay, which is not something that happens with regularity in the private sector. Don’t get me wrong, working for the federal government is a great deal, especially as far as the benefits package is concerned. But in some fields (such as law), there is potentially way more money to be made in the private sector. Also most government agencies instituted a pay freeze several years ago.

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  2. AlexInCT says:

    Once you’ve reached the top of the federal pay scale, you can still be promoted and given more responsibilities, but with no corresponding increase in pay, which is not something that happens with regularity in the private sector.

    Speaking from personal experience, I will tell you this is untrue. There are plenty of instances, and they go up in orders of magnitude, where people do not get compensation hikes but are straddled with more responsibilities in the private sector. And do not forget that most private sector employees have to perform at levels that would have public employees crying like little girls because they were being abused just to meet the minimum job requirement. I have had the “pleasure” of seeng this first hand.

    But in some fields (such as law), there is potentially way more money to be made in the private sector.

    With the exception of tha class action suits, I think the lawyers getting the pigest paydays are the ones in our government. You know, congress?

    Also most government agencies instituted a pay freeze several years ago.

    Mostof them also lowered the amount of work the employee does for that pay by hiring more cronies….

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  3. Argive says:

    Speaking from personal experience, I will tell you this is untrue. There are plenty of instances, and they go up in orders of magnitude, where people do not get compensation hikes but are straddled with more responsibilities in the private sector.

    Fair enough.

    With the exception of tha class action suits, I think the lawyers getting the pigest paydays are the ones in our government. You know, congress?

    Speaking from personal experience (most of my family members and their friends are lawyers, although I’m not), lawyers at corporate firms, particularly partners, can make boatloads more than any lawyer in the public sector. The private legal market is more volatile, especially since the financial crisis started, and pay for first year associates has leveled off in recent years, as it was unsustainably high before 2008. But if you’re lucky and if you have the appropriate credentials, working for a big corporate firm is a great living. Hell, I know people who spent years working for the government in a legal capacity only to quit and go to the private sector so they could make more money.

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