Private vs Public Sector: Scary Vision Version

|Peter Boettke|

Public sector employees are more optimistic about their current economic situation than employees in the private sector.  But as this article by Michael Barone from AEI points out, this is not that big of a surprise since stimulus money has poured into the public sector to date. What will happen when that spout runs dry?

Hat-tip to Gerald O'Driscoll

Comments

[Greg Ransom]

City and county employees in most of Orange County, CA can retire at age 50 at 100% of final salary -- a "final salary" which is often spiked with banked holiday and sick day hours, special bonuses, and other goodies. And the average retirement salary for most blue collar "safety" workers is well into the 6 figures.

The only "solution" so for on the horizon, is civic bankruptcy as has happened in Vallejo. Vallejo was firing policemen and firefighters in order to pay the massive pensions of newly retiring 50 year olds.

The judges in the courts have continually backed the government unions over the citizens, citing laws with make government / government union contracts iron clad and unrevocable.

Another case where the transfer of institutions developed in the private economy / private law have metastasized into completely pathological forms when imitated within the institutions of state power.

[Greg Ransom]

Has any "libertarian" tackled the problem of government pensions?

In my experience it often seems that loyalty and devotion to the state is rapped up in loyalty and devotion to one's own personal pension.

[John Froehlke]

Somehow many corporations have managed over the years to grow profits and satisfy shareholders despite having to negotiate contracts with unions. If those negotiated contracts have onerous aspects, who is at fault? Could it be, for example, the corporate entity that denied immediate salary increases for pension benefits to be paid out later while providing both massive increases and massive benefits to execs? Or is it the worker who found himself striking for pennies an hour and settling instead for future benefits that are now in danger?

Tossing agreed-to and signed union contracts into the dumpster basically renders unions useless. That should delight the anti-union folk. But dissatisfaction with safety, working conditions, benefits, etc. won't disappear when unions are destroyed. Add in a total loss of trust in the corporation. Simmer with a healthy helping of growing distrust in all things governmental.

I know it's not as simple as this. But try telling that to the armed mobs when they come rampaging into your cul-de-sac.

[G. Ben-Diks]

Spanish politicians get full pensions after 7 years.