Clearing snow doesn't justify state raises or the benefits
The state's snow plow drivers and first responders have done a heroic job in face of a herculean challenge. We are all grateful.
Yet, every time it blows or snows, someone rises up to "defend" our first-responders and emergency services workers.
But who is attacking them?
The "defenders" point at critics of "big government." Well, if the "defenders" bothered to listen to critics of big government, they would know that the critics are the most ardent defenders of first responders and public safety workers. The critics want to re-emphasize these essential functions that government has always performed - law, order and public safety - and scale back the massive expansion of non-essential activities into which government has crept over the last half century.
This "defense" has the effect, intended or not, of exploiting public gratitude for our first responders' performance and converting it into support of public sector workers in general - excusing excesses in the public sector and demonizing those who criticize such excess.
Let's go to the heart of the matter. Again, thank you to our essential public workers for several days of exhausting work clearing an overwhelming amount of snow.
Now, some cold hard facts. Connecticut state workers are four years into six years of guaranteed job security. In contrast, most of the legions of Connecticut private sector workers who lost their jobs in the Great Recession remain unemployed.
And, after more than 20 years of stagnation, the state's private sector employment picture is worsening - if that's possible. In the last half of 2012, our unemployment rate rose from 8.1 to 8.6 percent, well above the national rate of 7.9 percent. It would have risen further but for the alarming report that 50,000 citizens dropped out of Connecticut's labor force.
Clearly, conditions in Connecticut's public and private sectors are stunningly different.
Connecticut state workers have enjoyed four years of salary protection (some say "wage freeze"), and, as of this coming July 1, will receive the first of three consecutive 3 percent annual wage increases. So, while median private sector personal income fell drastically in the Great Recession and still has not recovered, Connecticut public sector workers saw no decline in pay and soon will enjoy raises that will increase their pay almost 10 percent. Is that fair? Is that "shared sacrifice?"
Now consider state employee retirement benefits. The problem is underfunded benefit plans, which, at the extremes, represent either unkept promises or unkeepable overpromises. Let's debate the issue and come to a compromise on reasonable reform.
Arguing on the side of "unkeepable" is the fact that, according to Barron's, Connecticut has the highest combination of unfunded public retirement plan obligations and outstanding state debt, a striking 17 percent of state GDP. Three-quarters of states are at 5 percent or less. And, as just described, our private sector is very sick, and, logically, unable to support increased contributions to public employee retirements.
Nevertheless, the Governor's proposed budget calls for a $1.05 billion, or 5 percent, increase in spending in FY 2013-14, about 60 percent of which will go to increased employee compensation ($125 million for pay raises and $468 million for increased contributions to retirement funds). So public sector compensation is crowding out spending on state services. Is this affordable or sustainable or fair?
And, remember, nowadays, virtually no one in the private sector enjoys the retirement benefits we are talking about. Is that fair?
And, further, remember that both employers and individuals watch trends, including the state's horrible jobs picture and fiscal condition. Individuals wonder "Can I find a job here (there)?" Companies see probable future tax increases to pay for the continuing fiscal recklessness. And both act accordingly.
So how can trends be reversed? Equitable treatment of public and private workers would be a good beginning.
Gratitude and praise for the dedicated performance of essential public workers should not be exploited to excuse unfair and unsustainable levels of public sector compensation.
Red Jahncke heads the Townsend Group, a business consulting firm in Greenwich and is an occasional contributor to The Day.
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