Are Federal Workers Overpaid?

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Mark of New Jersey

Mark is a Founding Editor of The League of Ordinary Gentlemen, the predecessor of Ordinary Times.

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221 Responses

  1. Avatar DensityDuck
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    says:

    I don’t think I’ve ever seen someone tout institutionalized dysfunction, turf-building, and “he’s just the President, wait four years and there’ll be another” as good things that we should want.Report

    • Avatar Mark Thompson in reply to DensityDuck
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      says:

      ???

      [And let me admit up front that I’m less than happy with how this post came out]Report

      • Avatar DensityDuck in reply to Mark Thompson
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        says:

        “[T]he federal government doesn’t have these concerns – it’s going to be providing basically the same products and services two years from now as it is today, no matter what happens.”

        In other words, how we’re doing it is how we’re gonna do it now and forevermore, Amen, so don’t be trying any of this ‘useless regulation’ garbage with us.Report

        • Avatar Mark Thompson in reply to DensityDuck
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          says:

          It’s not so much “how” government’s gonna do it as it is “what” government’s gonna do.  And I would love to see a government with a lot less power; I generally vote based on who I believe will be most likely to reduce government power, even if that means voting for the LP as or more often than the R’s or D’s.  But realistically, one President is not overnight, or even in two terms, going to return us to the Coolidge era.  If it took 80+ years to get to this point, then it’s going to take 80+ years to go back.  As well it should – rapid, radical change tends to have pretty nasty side effects, particularly when we all have made plans in reliance upon the existing system.

          If the government is going to inevitably continue providing a given service, then I want the people providing that service to be as experienced and familiar with the system as possible.Report

  2. Avatar Will Truman
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    says:

    Though I cannot say what kind of dropoff – if any – would occur with a different hiring regime, I am not exactly on board with the program, so to speak. While you are correct that private industry has a profit-maximizing incentive the government doesn’t, the latter ought to have a budget-maximization goal that would follow the same incentives (for the most part). So I think it’s relevant that industry has not followed this lead, for the most part.

    On the other hand, I don’t like the way that private industry often handles personnel matters, either. The incentives you ascribe to industry are, in my experience, part of the problem with industry.

    A good employee is worth their weight in gold to keep. In government, they don’t necessarily worry about the employees being good enough to be worth the weight. In industry, they don’t worry enough about keeping the good ones.

     Report

    • Avatar Mark Thompson in reply to Will Truman
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      says:

      +1 to your last two paragraphs.

      Regarding your first paragraph, I’m not at all certain that government should have a budget maximization goal.  Solvency and sustainability, definitely, and to the extent Keynes was right, in prosperous times it probably is best to make efficiency a high priority; but when times are less than prosperous, inefficiency in government can be a damned good thing, at least if you take Keynesianism seriously.Report

      • Avatar Will Truman in reply to Mark Thompson
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        says:

        Mark, even from a Keynesian standpoint, I don’t think I buy overpaying employees as the best way to go about it. Rather, I think the priority ought to be to pay more people less rather than less people more. The government’s personnel methodology, however, is counterproductive to that end. The more you pay an employee, and the more rigid the hiring/firing structure, the more trepidation when it comes to bringing on new people.Report

    • Avatar Roger in reply to Will Truman
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      says:

      No Will, they are not worth their weight in gold. They are worth what others will voluntarily pay them. Half the comments on this post are operating under the economic fallacy of inherent value.Report

      • Avatar wardsmith in reply to Roger
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        says:

        worth their weight in gold

        Clearly when we look at this article federal employees are already so perfect they are never fired. Now given the bell curve analysis Patrick recently did, either the feds are continually taking the best and the brightest from the right tail of the distribution or their standards are incredibly low. Given my personal experience in dealing with them I think I know the correct answer.Report

      • Avatar ~trumwill in reply to Roger
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        says:

        It’s a figure of speech. It’s not about inherent value. It’s about, among other things (including what you refer to), it’s about value-added to the company.

        The problem with focusing on “what others will voluntarily pay them” is that you usually find out what others will pay them by way of Two Weeks Notice. When it’s too late.

        It’s been my experience that companies rather consistently underestimate the cost of good-employee turnover.

        Low-balling pay, or treating your employees badly, on the notion that they “won’t be able to do better” (even if you have a BLS spreadsheet saying that your salaries are competitive) is, in my experience, a great way to lose precisely the valuable employees that can do better. To the company’s detriment.

        (And all of this overlooks the tendency of employees who think they have one foot out the door – or think they do – slowing down productivity because… why bother? I’ve seen a fair amount of this, too.)

        More broadly, business has got it in its mind that employees are interchangeable above and beyond the degree to which they are. And they act accordingly. The bad employee who doesn’t get fired is hardly a public-sector phenomenon, for instance. Good employees who leave take a whole lot of tribal knowledge with them, that it costs the company a lot of time and effort to instill in newbies.

        You can look at this as being about “inherent value,” but there is a value apart from competitiveness. Some employers keep around employees that cost the company money. That, in an accounting of contributions and resources absorbed, they would be losing money by paying them nothing at all.

        So there is, indeed, a value apart from what some other company is willing to pay them.Report

        • Avatar Roger in reply to ~trumwill
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          says:

          Hi Will,

          I agree in many ways to your last post. The value of the employee is indeed rooted in the value they can produce. That is why other companies try to attract them. And that determines their wages.

          And you are right that the current system is not great at identifying the most productive and separating them out from the slugs. I suspect firms will get better at this in the future. The way I did it was to outsource. I could bring in all kinds of contractors and then just renew the contracts with the awesome producers. Contracting is a lot more flexible, but I paid those that were good a lot.

          As Patrick has been stressing lately, getting better at identifying value added employees will create problems as well as solutions. I didn’t renew most contracts.Report

          • Avatar Jesse Ewiak in reply to Roger
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            says:

            I can think nothing better than a world where nobody in the 99% makes more than one penny of their “optimal” value.Report

          • Avatar Will Truman in reply to Roger
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            says:

            Roger, for what it’s worth, I am a fan of contract-to-hire. But, once you have identified the ones you want to hire, making it worth their while to stay. Not guessing at the minimum you can pay them so that you don’t think someone will offer more, but making sure that someone won’t offer more (for the ones you *really* don’t want to lose – there’s a sliding scale here).

            (Truthfully, though, I think more of an emphasis should be placed on non-monetary things. This is where I think a lot of employers *really* screw up.)Report

        • Avatar Mark Thompson in reply to ~trumwill
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          says:

          This, basically.  Though I somewhat disagree that it’s necessarily a value apart from competitiveness; instead I’d argue that it’s a question of the extent to which you’re going to value long-term competitiveness over short-term competitiveness or vice-versa.Report

          • Avatar Will Truman in reply to Mark Thompson
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            says:

            Note that when I say “competitive” in this context, I mean specifically the competitiveness of the wages in the job marketplace and not the overall competitiveness of the company in the overall marketplace.

            Do we still disagree?Report

            • Avatar wardsmith in reply to Will Truman
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              says:

              when I say “competitive” in this context, I mean specifically the competitiveness of the wages in the job marketplace and not the overall competitiveness of the company in the overall marketplace.

              And there’s the rub Will. In the real world (or the imaginary one Jesse inhabits) the executive who fitters away his day playing on Facebook is going to become part of a dysfunctional corporation (at least his division that the supposed executive is supposedly in charge of). That corporation or that division is going to lose money and eventually they just won’t exist anymore. We can’t say the same thing about abysmal incompetence in the government. It takes losing a major war or a civil war or an “Arab Spring” to change a government. Merely losing money isn’t sufficient grounds.

              The economist’s argument is that since the government is immune from the slings and arrows of corporeality then efficiency is sacrificed (at least) and we end up in the Keynesian world of half the people digging ditches and the other half filling them in. Unfortunately that world is unsustainable.Report

              • Avatar Will Truman in reply to wardsmith
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                says:

                Ward, all of that can be true, and yet basing wages on job market competitiveness can still be an operational error that cuts into overall competitiveness. That turnover rates are taken for granted by American industry does not mean that they are optimal.

                (And note, by saying that, I am not suggesting that the government’s model is optimal, either.)Report

  3. Avatar Tod Kelly
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    says:

    A rather excellent post, and I have to say an equally excellent follow up by Will above.

    I have very little to add, except one obvious point and one likely irrelevant one:

    I suspect that everyone takes out of this study exactly what preconceived notions they entered with.

    Regarding those employees with HS only education, Unions may indeed account for part of he discrepancy, but here is another: in govt., minimim education is always one piece of a very rigid job qualification criteria. In the private sector, HS grads can often prove themselves enough to get management positions; there are also tons of jobs in sales that can pay very highly that are dominated by people without college degrees.Report

  4. Avatar Michael Drew
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    says:

    Sorry to hear you weren’t happy with the post, Mark.  I thought it was excellent.Report

  5. Avatar stuhlmann
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    says:

    If this study “proves” that federal workers, at least those without college degrees, are overpaid, does it not also show that in the private sector, those with professional/doctorate degrees are overpaid?  They make significantly more than comparable federal workers.Report

  6. Avatar Renee
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    says:

    Old timers in government provide experience, knowledge, and ability to navigate the bureaucracy.  They also provide institutional inertia, rigidity, and cynicism.  I have experienced both.  If you think you are going to get the latter type on board with new methodologies or technology, you got another thing coming.  He knows how to do his job, thank you very much.

    Also, federal employment serves to keep people working for the federal government — not in the particular job they are at gaining experience.  I have seen many great young employees work a year or two at an agency only to move to another.  Which has its advantages and disadvantages.

    In fact, for any anecdotal advantage you can come up with, I can come up with an anecdotal disadvantage.  And vice versa.  The problem in trying to measure, as always, government performance is that we only really know the inputs.  Hard to know what the outputs are.

     Report

    • Avatar Matty in reply to Renee
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      says:

      Also, federal employment serves to keep people working for the federal government — not in the particular job they are at gaining experience.  I have seen many great young employees work a year or two at an agency only to move to another.  Which has its advantages and disadvantages.

      Out of interest is this deliberate? I’m told that in parts of the British civil service it is part of the training of new recruits to spend a few years working in different areas for six months at a time before being permanently placed in one department.Report

      • Avatar Renee in reply to Matty
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        says:

        From my (albeit limited) experience, I would certainly not use the word deliberate.  On the other hand, there may certainly be deliberate programs set up for such cross-training experience.  Having said that I don’t think the advantages of such a system (breadth of experience, etc) are completely unintentional.  I think HR recognizeds that as a benefit, but not designed for that particular purpose.Report

  7. Avatar BSK
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    says:

    Are the numbers controlled for area of the country? My hunch would be that most government jobs are in or near big cities, especially if we are thinking of the federal government. Cost-of-living is generally higher in these areas so wages must follow.

    The guy who sweeps the floors in Congress should earn more than the guy who sweeps floors in the Widget Factory of BF, Montana, if only to account for the incredible disparity in cost of living.Report

    • Avatar Annelid Gustator in reply to BSK
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      says:

      Damn near all the custodial services are contracted and not on the GS.Report

      • Avatar BSK in reply to Annelid Gustator
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        says:

        I was unaware.  Still, I’d be curious to see how geography factors into the equation.Report

        • Avatar Mark Thompson in reply to BSK
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          says:

          This was something I tried to research, at least to a limited extent, though not regarding the COL issue, since I knew they had factored that in.  What I was trying to figure out was whether areas with high concentrations of government employees were also areas with high numbers of working poor such that it could be said that some meaningful percentage of the difference amongst less-educated employees was offset by a marginal reduction in number of welfare/Medicaid recipients.  The Washington DC MSA has about 14 percent of federal employees, and DC has a remarkably high number of people eligible for public assistance, but those statistics don’t get you very far.Report

  8. Avatar Falmouth
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    says:

    My understanding is that cost of living was factored in. However other important variables and questions remain. Are employees under the old retirement plan included or does this use the newer which is less expensive to the govt ? If employees still working and yet to retire are included its not really an accurate comparison of the cost of an employee hired in the last ten years. Veterans also get their service included in their retirement and are given preference in hiring for most Govt  jobs. This inflates the cost to the Govt and is not included in the analysis. Something that should have been included is a comparison to the private sector twenty years ago, so that we could see if maybe the problem is not with Govt benefits but with the elimination of benefits in the private sector which, though I am a little biased in this ( though I do not work for the Govt), is probably the real problem which should get more notice and discussion.Report

  9. Avatar JCog
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    says:

    “Something that should have been included is a comparison to the private sector twenty years ago, so that we could see if maybe the problem is not with Govt benefits but with the elimination of benefits in the private sector which, though I am a little biased in this ( though I do not work for the Govt), is probably the real problem which should get more notice and discussion.”

    Exactly, it is fascinating to me that no one even thinks to suggest that it is possible that private sector blue collar workers are under-compensated. Having held a few government jobs, I can attest to the fact that they are hardly the gateway to wealth. As a matter of fact, for many of the working poor, they are one of the few options left for class mobility.Report

  10. Avatar M.Z.
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    says:

    On the professional side, one reason that accounts for the wage disparity is the expectation of mandatory overtime.  Lawyers at the justice department work hard, but they aren’t ladder climbing like in the private sector.  This also something hard to account for statistically.  Given enough time, I imagine we could come up with about a half dozen soft benefits to professional, government work.

    On the manual labor side, I’m always curious if people would find it more respectable if governmental units led the way with number of employee dependents on state welfare programs ala Walmart.  Granted a lot of positions wouldn’t qualify for health benefits in the private sector, but in the public sector, the health benefits are going to come out of the same pocket anyway.Report

  11. Avatar Roger
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    says:

    The dynamic forces of a relatively free market drive producers to be as efficient, innovative and effective as possible to optimize profits. Part of this dynamic is a set of incentives for employees to be as effective as possible, incentives for firms to bid up the wages of the most productive employees, and incentives to limit the natural tendencies of firms toward bureaucracy, overpayment and bloat. The consumer is sovereign in the private sphere as revealed by profits and losses experienced by the firms competing for their business. This is a dynamic learning system that evolves to solve more problems better for consumers.

    There are no similar dynamics in the public sphere. Little or no competition, little or no incentive to discover efficiency (in fact incentives to become larger and less effective), little or no incentive for employees to become more productive, and so on. Overpaying workers is just the tip of the iceberg on inefficiencies and ineffectiveness of public service. Over time the dynamic reveals it will continue to get less effective, more bloated and will actually be rewarded in many cases for propagating problems rather than solutions.

    Most public services are complex forms of exploitation. Competitors are forcibly (by dudes with guns) kept out of the market. Consumers are forcibly required to purchase the service and to pay whatever price the cartel of workers, bureaucrats and politicians can manage to extract from them.

    We need competition to fix this dynamic. Then we can discover what the fair, going rate is for public service. Most government services could be handled by private firms. Even more importantly, we need to focus public services to the narrow range of public goods.

    Public services evolve into inefficient and exploitative shake-down rackets. There are more effective ways to solve our social problems. Progress will emerge as we learn how to  free ourselves from this dysfunctional situation.

     Report

    • Avatar Patrick Cahalan in reply to Roger
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      says:

      Roger:

      You are comparing private enterprise organizations and public service organization as if they are separable into two buckets, and all private enterprise organizations fit into a “respond to outside (market, in this case) forces” bucket and all public service organizations into a “don’t” bucket.

      I submit this is overly reductionist.

      A well established private enterprise in a commodity level market will indeed trend fairly close to market forces.  Providing a service that requires, say, 40 year, massive capital expenditure facilities will indeed mean that you and your competitors focus very highly on efficiency and respond fairly quickly to market pressure.  That represents… actually, not a very large percentage of private enterprises, in total (although a fairly large percentage, in dinero terms).

      Most organizations that function in the private market are a hodge-podge of established processes and entrepreneurial chaos in an attempt to bring a game changer to the market that gives them a competitive advantage, because they are not working with commodity products.  It is not the company that produces the desktop computer at 0.5% less cost than the competitor that wins, here, but the one that produces the new hot gadget – form factor currently unknown – that outsells the desktop computer by the millions and thus creates a more or less entirely new market.

      In these companies, efficiency is not nearly as big of a contributor to organizational success.  In fact, companies that focus too much on efficiency in producing their established product very often engage too deeply in double loop learning and don’t see major potential market-changing upheavals until their lunch has been eaten and even the crumbs have been picked up.

      There are public service organizations that indeed fall into all the bad behaviors you list, but we can’t pretend that there are *no* outside forces on those organizations.  Voters, special interest lobbyists, populism movements, political shenanigans… they all act to shape and change organizational behavior.  They aren’t profit/loss motivational forces, but they exist.  They’re there, shaping things to *some* degree.

      Yes, typically, these forces force public sector organizations to respond with less precision or less accuracy than market forces in a commodity market force private sector organizations to respond.  However, the converse is also true: those forces *can* make public sector organizations respond *much faster* than market forces in a commodity market: look how long it took the City of Bell cabal to get their collective heads handed to them once their smoke and mirrors game was exposed.  Comeuppance can come quickly in the public sector.

      Granted, compared across all cases and all organizations I’ll give you that private sector companies respond to market forces, on the whole, more often with efficiency than public sector organizations.  But this is a continuum, not a bipolar comparison.  And while we certainly could use a lot more efficiency in the public sector, that’s only part of what the public sector could learn from the private.Report

      • Avatar Roger in reply to Patrick Cahalan
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        says:

        Patrick,

        I basically agree. Efficiency is just one dimension of competition. Markets solve problems and the market pressures are for them to solve them as well as possible for as little as possible in a win/win fashion. Markets also are drawn to creating novel solutions.

        I also agree that it is not always bipolar, and that there are positive and negative forces affecting both private and public efficiency and effectiveness. Privilege/rent  seeking, logrolling, bureaucratization, relatively emasculated competition and benchmarking and knowledge problems create huge barriers for efficient and effective public service. We need Public Choice.

        I suspect the system will eventually be drawn toward effective services, but it will be more revolutionary and disruptive. Yes, comeuppance will come quickly. I suspect a whole lot of public service pensions will never be collected, and that a lot of people will be harmed when the levee breaks. Lives will be damaged.Report

    • Avatar Liberty60 in reply to Roger
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      The reason the private sector is so efficient is that it is in a state of constant chaos and turmoil, as inefficient providers are going bankrupt, or altering their delivery, or trying new strategies. “Efficiency” is also acheived by eliminating services that are not lucrative or consumers who aren’t able to be in the market.

      Is this the dynamic we want in government services?

      Does it benefit the public to have low cost firefighting by Acme Firefighters, Inc. and Jones Bros Firemen, Ltd., except that at any given time Acme is closed for reorganization and Jones Bros decided they don’t want to service your area?

      Government services, like health care, is not a consumer good like toasters or pizza delivery.

      Guaranteed 24/7 universal service to everyone everywhere” is not compatible with the free market-either the mythical “free market” or the real thing we have.Report

      • Avatar Roger in reply to Liberty60
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        says:

        Good question Liberty,

        I agree with limited government supply of public goods. We could argue what these are, but in my opinion, it is a small fraction of what we have government involved in today.Report

        • Avatar Roger in reply to Roger
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          says:

          Oh, and this is exactly the dynamic we want for most of what the government does today that it shouldn’t.Report

          • Avatar Liberty60 in reply to Roger
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            says:

            Such as?Report

          • Avatar wardsmith in reply to Roger
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            says:

            Ooh ooh, can I play teacher, pretty please may I?

            Let’s see shall we? 47 job training programs, 44 of them overlap and only a whopping FIVE have produced outcome reports since 2004. Back when I was in school (admittedly the stone ages) the profs said, “That which doesn’t get measured doesn’t exist”. Of course if I were a government bunglecrat I wouldn’t want anyone to measure my performance either.

            We could pick on food oversight, and how many agencies have their thumbs on that scale. 82 teacher-quality programs, and just look how gewd Jonnie is redding! But I’m jumping on Roger’s answer here, he might want to take it in an entirely different direction.Report

            • Avatar James Hanley in reply to wardsmith
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              says:

              I’d add that much of this “chaos and turmoil” can be duplicated fairly well by bidding on contracts to produce government services.  Just because government is the provider of the service (the “provider”ensures that the good or service is made available), does not mean the government actually has to be the producer of the service.  So where appropriate* competitive bidding on contracts to be the producer of the service ought to be the standard model. Some cities that have engaged in such contracting out have found that after initially giving the contract to outside firms their own agencies have sometimes submitted successful bids when the contracts come up for re-bid. The “chaos and turmoil” puts the public agencies under competitive pressure, to the public’s benefit.

              * It’s not appropriate for every service; it is appropriate for more services than most people realize.Report

        • Avatar Stillwater in reply to Roger
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          says:

          Roger, You say that our government could engage in only a ‘small fraction’ of the activities it engages in today, but what would those be? I mean, you appear to accept the liberal view of government intervention in broad outline and only disagree on the edges. So what would constitute this ‘small fraction’ of activities which you would sustain? Or really, what are the activities which constitute the ‘vast majority’ of government activities you reject?Report

          • Avatar Roger in reply to Stillwater
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            says:

            Liberty and Stillwater,

            I doubt the difference between us is on the fringes.

            I can see a role for government in basic defense (a tiny fraction of our current “offense” budget), courts, environmental protection, policing and in those safety nets that cannot be handled well by private mechanisms.

            I am unsure on what percent of schooling should be handled by the government, but I do see a role here. Poor kids, for example should be assured a good education. I am sure there are other services that are best handled by government that i can’t think of right now. Most are public goods.

            I would try to introduce constructive competition in any of these which I could reasonably figure out how to. This includes competing agencies, subsidiarity, limited time charters, taxpayer directed taxes and so forth.

            What would you guys eliminate?Report

            • Avatar Liberty60 in reply to Roger
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              says:

              The more you post, the more I think we ARE talking about the margins.

              We all agree that at the city level we need gummint run emergency services (which already comprise the bulk of most cities’ expenses anyway)

              At the state level we agree there should be a public school system and basic safety net (which again, constitutes most states’ expenses already)

              And at the federal level we agree we need basic defense and emergency response services- which accounts for about 1/3 of our current budget. Throw in a “basic” safety net like Social Security and Medicare and you cover 3 Trillion of our 3.8 Trillion budget.

              I would argue that a comprehensive list of “Everything Roger And the Conservatives Want To Cut” would amount to no more than 10% of any government at any level.

              Balancing the federal budget is way O/T anyway, and should be reserved for another thread.

              The topic here- whether or not federal workers are being overpaid- seems like it really isn’t a source of our budgetary troubles.Report

              • Avatar Roger in reply to Liberty60
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                says:

                Liberty,

                This girl has some mighty large margins.

                I see no reason garbage and fire could not be handled privately or privately/publicly. The same with schools.  Imagine if schools were as efficient as they were back in the 70s (and they sucked then too).

                I would slash defense by more than half (way more). I would privatize most social security and some medicare (they are basically old age insurance programs with subsidies). This would move trillions out of politicians hands. It would also lower health care costs.

                I think that government workers are vastly overpaid to produce grossly inferior results. I’d like to see fewer workers, paid less do better with a more focused scope.

                 Report

              • Avatar Jesse Ewiak in reply to Roger
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                says:

                Schools were efficient in the 70’s because we didn’t care any about little things like special ed, ESOL the kids were in massive concrete blocks, and the most technologically advanced item in the whole place was a Xerox.Report

              • Avatar Roger in reply to Jesse Ewiak
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                says:

                Jesse,

                I’m sure there are legitimate forces that would push toward higher costs of education. I can also list dozens of forces which would push toward efficiencies (many technological). Absent open competition we will not know how these can play out. Do you support open competition in schools?Report

              • Avatar James Hanley in reply to Roger
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                says:

                I’m sure there are legitimate forces that would push toward higher costs of education.

                Technnology is one. An overhead projector is a one-time cost that last forever with minimal maintenance (the occasional light bulb, etc.).  But computer technology becomes obsolete quickly, so it becomes a large on-going cost.

                Another problem may be the “cost-disease” theory of William Baumol (if you buy the concept; not all economists do).  Basically it says costs increase without attendant productivity increases. Teacher salaries keep increasing, but because teaching is primarily labor-intensive rather than capital-intensive it’s difficult to impossible to get attendant increases in productivity.  There’s only so many kids each teacher can teach effectively, and its hard to increase that number without diminishing quality dramatically.

                 Report

              • Avatar BlaiseP in reply to Roger
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                says:

                Those overhead projectors go through bulbs like a fat kid eating popcorn.   You’re absolutely right about the unseemly trend toward cost increases without attendant productivity increases.   These costs can be contained but only if you have a clear measure of productivity.

                I have a theory about why education costs annoy so many people:  they don’t see the benefits clearly.   Let’s clear the board here and think through how people might get a better picture.

                While technology isn’t the answer to all problems, there’s one problem it really can solve, grading closed-domain problems.   Math should be taught in software.   Each student would be sent through various levels of math, starting with simple addition.   He only progresses to the next level when he has mastered all the questions at that level, getting ten correct answers in a row would automatically promote him to the next level.   The teacher can see everyone working away on some monitor:  some kid’s consistently having trouble at one level, the teacher can intervene immediately and help the kid through some conceptual problem.   There are no “tests” in this framework, it’s more like a video game, climbing a mountain might be a better analogy.

                Another perceived weakness of education is our failure to identify talent.   Failure we’re good at, success, not so much.

                Class size is always an important consideration but it’s not the most important consideration.   Ultimately, it comes down to one-on-one encounters between student and teacher.   Every kid ought to get some individual attention on a regular basis.   It’s sorta like parenting in some ways, it’s not that kids need a lot of attention lavished on them, but they need some attention all the time.   Seems the only time kids get any attention is when they’re acting out or failing and that’s just wrong.  Catch your kids doing something good, every day.   Every kid is unique, with individual strengths and weaknesses,   A good teacher knows all this.Report

              • Avatar Roger in reply to Roger
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                says:

                And with the relative absence of competition and profit/loss we have fewer effective ways to determine whether we should buy the projector (or all those back office administrators) in the first place.

                The internet is going to revolutionize teaching one way or another.

                I enjoyed Baumol’s Free Market Innovation MachineReport

              • Avatar James Hanley in reply to Roger
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                says:

                Blaise, there’s an awful lot in your comment that I agree with.  I think that approach would also be less frustrating for math teachers.  I’m trying to incorporate some of those ideas into my (non-math) teaching now–or more precisely, I’m trying to figure out how to incorporate some of those ideas.Report

      • Avatar Jaybird in reply to Liberty60
        Ignored
        says:

        To what extent is our Federal Government analogous to a local Fire Department?

        I mean, if I were going to compare the Department of Agriculture to something, it wouldn’t be a *FIRE DEPARTMENT*.Report

  12. Avatar Ryan
    Ignored
    says:

    I really have to take issue with a lot of this.

    First, the suggestion that what amounts to tenure makes for better employees. I just don’t see any argument that this is even remotely true. We’ve seen what it’s doing to college professors in the private sector, i.e. encouraging increased attention to more and more abstract and arcane academic interests at the expense of actual teaching, and we’ve all experienced what it means for interacting with public sector employees. They’ve got absolutely no incentive to be responsive to their customers *or* their bosses. Tenure is why the lady at the BMV, while not actually making any “mistakes” is going to be so insistent on whatever impossible combination of forms you’re supposed to have to register the car you just purchased. Tenure is why there are tons of people receiving SSDI benefits who shouldn’t and tons of people who have to sue to get the SSDI benefits to which they are entitled, i.e. the bean counters acting as gatekeepers have almost no incentive to actually get the thing right. Tenure is why the roads in Pennsylvania suck so much, i.e. the government and unionized employees who receive ridiculous wages see no real reason to finish any project well or on time.

    Second, even if a “stable and consistent” workforce is worth something, you haven’t actually argued that it’s worth the premium we’re paying. But more importantly, you;vewhether it’s something we could ever have afforded. The reason the private sector has phased out defined-benefit pensions is because they’re prohibitively expensive. As in, if you actually crunch the numbers, CalPers needs to set aside something like 30-40% of every employee’s salary every year to be adequately funded. And that’s if you put money aside during the period of employment. If you don’t, it’s a continuing 60% of their base salary for anywhere up to three or four decades, sometimes longer than they actually worked. My employer contributes 9% of my salary into my 401k, and I’m grateful for it. But I think the benefit numbers the CBO is using probably drastically underestimate the amount of money these retirement benefits actually represent. Because they don’t actually tell us how they calculate their numbers or whether they’re just ignoring a huge unfunded obligation (like most state and municipal retirement plans are), it’s hard for me to put too much weight on their numbers.Report

    • Avatar Kim in reply to Ryan
      Ignored
      says:

      Ryan,

      All due respect? you is full of shit!

      PA HIRES MINIMUM BIDDERS for their damn roads. And then they break. There’s a reason we got an ice cream called Pittsburgh Pothole up here.

      Maryland, god save their souls, hires moderate bid folks (middle of the pack). BUT if their road breaks within X time, they have to fix it for free.

      Tends to keep the potholes down, if you know what I mean.

       

      (and yes, penndot sucks. but not half as bad as verizon. verizon I gotta pay to screw things up. $100 a year service charges, etc)Report

    • Avatar Mark Thompson in reply to Ryan
      Ignored
      says:

      Ryan:

      On your first point, this is part of what I was getting at when I said I didn’t like how this post turned out.  I was not at all clear on that point, and really should have made an explicit distinction between the type of stability involved in tenure systems or in systems such as the federal government’s where it is made extraordinarily difficult to terminate someone who is incompetent or worse versus the type of stability created by defined benefit pension programs.   The former provide relatively little extra incentive for a good employee to want to stay, and plenty of incentive to be lazy; the latter are going to provide a strong incentive for good employees to stick around, and, in the absence of absurdly strong protections against termination, will even provide a strong incentive for the employee to excel.

      On your second point, I just want to emphasize that I’m not here arguing that the benefits of stability are necessarily worth the premium we’re paying; I’m just saying that it’s possible that they are.

      On what I take to be your third point (everything after “but more importantly”), I think that’s vastly more worthwhile question, and I have quite a bit of sympathy for the position it represents.  I also, however, think it’s a somewhat separate question from the one the posts I link to are trying to answer.  Frankly, if they had tried to answer that question, which amounts to a straightforward economic question of “are federal employee benefits sustainable?” rather than the value-laden question they did ask of, in effect, “are federal employee’s fleecing the American taxpayer?” then I wouldn’t have written anything on the subject and would have deferred to the debate amongst the experts.Report

      • Avatar Ryan in reply to Mark Thompson
        Ignored
        says:

        All of that’s fair. Though I think I should probably have hit harder on just how little I trust those CBO numbers. There’s a distinct possibility that they reflect the numbers the federal government has budgeted for its pension plans but not what the actual cost is going to be. I have a pretty strong suspicion that the latter number is significantly higher than the former, which would tilt even the professional-level compensation significantly higher on the federal side.Report

    • Avatar JCog in reply to Ryan
      Ignored
      says:

      No, just no.

       

      The reason the private sector has phased out defined-benefit pensions is because they wish to maximize profits, so they can make even more money than they already are. They are not some sort of benevolent gift they are actually part of your pay, so their elimination amounts to a reduction in your base pay while the CEO gets yet another multimillion dollar bonus. And the woman at the DMV insists on all that paperwork because she has to, in an effort (often futile) to prevent fraud. These decisions are made at a level considerably above her pay-grade.

       Report

      • Avatar Roger in reply to JCog
        Ignored
        says:

        Jcog,

        Just take an economics course.Report

        • Avatar Michelle in reply to Roger
          Ignored
          says:

          So much of economics is pure bullshit because it works on the ideal of a non-existent free market system. All economies operate within historical, political, and cultural contexts that economics ignores.

          And yes–I’ve taken an economics course or two.Report

          • Avatar Roger in reply to Michelle
            Ignored
            says:

            Michelle,

            Yes, economics works within political and cultural contexts.  So does wishful thinking.Report

          • Avatar James K in reply to Michelle
            Ignored
            says:

            In introductory economics courses the theories you come across are mostly bullshit because they are setting the theoretical ideal conditions.  Those theories are just the foundations upon which the useful theories can be built.  Once you have a handle on those they start throwing in complications (collectively known as “market failures”), which make the description more realistic.  Then you can start figuring out what particular government policies would do to the operation of real world markets.

            And as to Roger’s point – the thing to remember that any benefits you have are part of your compensation package, ultimately the cost of them comes out of your pay.  If you didn’t get a pension, you’d be paid more.Report

        • Avatar JCog in reply to Roger
          Ignored
          says:

          I fail to see how ad hominem attacks against my perceived level of education really answers my points.

          All of the economics classes in the world will have a hard time convincing me that the fact that average CEO salaries increased by 400% during the same time period as employee benefits were no longer economically viable are unrelated to one another. As to treating these benefits as part of an employees base pay, that is exactly what this post does for the federal worker. Therefore it is completely logical to treat reductions in these benefits as reductions in base pay. As a matter of fact I’m not really sure what it is about my post that you disagree with. You will have to forgive my delay in replying, I was in a class and Professors tend to frown on blogging during their lectures.Report

          • Avatar DensityDuck in reply to JCog
            Ignored
            says:

            Consider that a CEO is both a tax shelter and a marketing activity for a company.  The salary makes more sense in that context.Report

            • Avatar JCog in reply to DensityDuck
              Ignored
              says:

              Oh, I get that believe me. I never supposed that there wasn’t a sort of sense to it. I would however state that it is a sort of sense based firmly in greed with no moral or ethical underpinning at all.

              My actual point I guess is that no, federal workers by and large are not overpaid. In fact the noted disparity only points to the fact that private sector employees are underpaid.Report

            • Avatar Tod Kelly in reply to DensityDuck
              Ignored
              says:

              DD, interesting comment.  Can you flesh this part out a bit – in what way is a CEO a tax shelter?Report

              • Avatar DensityDuck in reply to Tod Kelly
                Ignored
                says:

                Companies are allowed to write off CEO compensation as a business expense.  The more they pay the CEO, the less they pay in taxes.Report

              • Avatar Tod Kelly in reply to DensityDuck
                Ignored
                says:

                Then I’m not quite understanding your point.  Those companies could have chosen to have biz expenses by paying their employees more, or expanding benefits… or capital expenditures, or even donations for PR.  Why is this a reason for the growth of CEO compensation in particular?Report

              • Avatar DensityDuck in reply to Tod Kelly
                Ignored
                says:

                Because paying a larger salary to a single employee (rather than a little bit more to everyone) further limits the tax burden.  Many taxes, such as Social Security, have a “maximum income on which you are taxed”.

                You’re right that this still isn’t a reason why you wouldn’t increase all the employees’ salaries by a little bit, but it’s a way that it might be explained.Report

              • Avatar greginak in reply to DensityDuck
                Ignored
                says:

                Or CEO’s are stars and hero’s and bring flash. They are much more likely to be friends with the other C level dudes and Board members as opposed to the workers who disposable.Report

          • Avatar Roger in reply to JCog
            Ignored
            says:

            Jcog,

            I’m sorry. Let me be specific….

            The reason the private sector has phased out defined-benefit pensions is because they wish to maximize profits, so they can make even more money than they already are.

            This statement is 100% true. For profit firms are expected to optimize profits. The free market depends upon this being true. This is not something nefarious, any more than saying consumers are expected to optimize value (benefit divided by cost), and employees are expected to optimize wages. The magic of free enterprise is how these forces balance out in a creative and productive way. This is the source of modern prosperity. It is a feature, not a bug.

            And why do you care so much about CEO’s salaries as opposed to Oprah’s or Lady Gaga’s or David Beckham’s? If a board is willing to pay them that much, what makes you so sure they are not worth it?Report

            • Avatar JCog in reply to Roger
              Ignored
              says:

              I have been away for two days so I hope that I am not too late in replying. Perhaps I should not post if I do not have the time to engage in the debate, however I do feel compelled to reply.

              You have (both here and below) laid the prosperity of the last 200 yrs. at the feet of the free market. I feel that this is dishonest at best. At the end of the 19th Century the overwhelming majority of people were subsistence farmers and an even greater number of people lived in absolute poverty. For most of the world the progress that you are speaking of occurred in the 20th century, and rode the back of government programs and interference ranging from the Sherman Antitrust Act of 1890 to the GI BIll, TVA, and the creation of the interstate highway system.

              I realize that this does not pertain to the original post, but I feel the need to answer some of the libertarian sentiment on here. In attempting to look up the most free-market countries in the world I discovered that all of the lists that I could find only listed countries with mixed market economies. I wonder if places like Somalia would not better fit the libertarian ideal of a regulation and subsidization free market, and if so why exclude them. This also makes me wonder why, if free-markets are so great, China is the fastest growing economy in the world?

              As to why I care about CEO (and you might as well throw stockholders in there) salaries and not the names that you listed. It is because those people do not increase their bottom line by taking other peoples livelihoods and benefits away, they only wreck our culture.Report

              • Avatar Roger in reply to JCog
                Ignored
                says:

                Jcog,

                It’s all good. The only way I can follow the threads is via email alerts. That is why it helps to list the audience by name — otherwise I may miss that it is a reply to me. (hint hint to all)

                It is not dishonest. James and I both admitted that government plays a role — for example in property rights, the effective rule of law and such.  I suspect universal education and highways are also great stimulants for growth, though I would follow James’ advice and contract out competitively and/or privately for these services.

                Let me be as clear as possible. Widespread prosperity comes about by solving the problems and needs of people. It comes about by providing the food, shelter, entertainment, pleasure, health care and so forth.

                Before we can fulfill a need we need to first creatively learn how to do so. Then we need to produce and spread these solutions. Then we need to combine them, improve them and cumulatively gain in problem solving ability.

                The basic process (with nods to D Campbell) is one of:

                Experimentation — Creatively learn how to solve problems via variation and selection

                Spreading — Preserve solutions, spread them and replicate them

                Building —  Starting with what works, ratchet it up with further improvements and by combining solutions into larger, better solution sets and networks

                Free enterprise and science are the two problem solving/spreading/building systems of post enlightenment modernity. They are dynamic systems that, if unimpeded, constantly drive toward widespread problem solving (in different but overlapping domains).

                Free enterprise works because of the magic of division of labor and exchange. Individuals are incentivized to specialize in problem solving and to constantly improve at it and then to exchange these solutions to others. This allows humans to be the only species which can escape the Malthusian curse. More people, if connected together via positive sum, win/win networks of interdependent specialization can create more and more wealth. We learn to solve, spread and build better and better. Indeed the system is driven to do so. Government’s role is to facilitate this process.

                Your comment on Somalia reflects an error in understanding libertarianism. To oversimplify, Libertarians believe in liberty meaning the freedom to do things that do not actively harm or constrain others. We believe in well defined property rights and in only using coercive force to repel coercive force.  Somalia and crony capitalism/unionism are both the antithesis of libertarianism.

                China is fastest growing because the dynamic of catching up is a heck of a lot easier than leading the innovation space. They liberalized a few decades ago and are now able to reap the fruits of free enterprise themselves.

                Finally, CEOs (and Oprah and Lady Gaga btw) don’t TAKE anything from anyone*. In a free market they are willingly paid to lead large divisions of these aforementioned problem solving machines. This does not take wealth from anyone, because wealth — in free enterprise — is a positive sum thing. It is win/win. An effective leader (Jobs, Gates, Walton) creates wealth for employees and consumers. It is possible for everyone to gain (or all to lose and hence the danger of an ineffective CEO).

                But this gets to the great progressive blindness. They perceive the world as zero sum even in those rare fields that are not (Science and free enterprise for example).

                * for the record I am not sure the CEO market IS a free marketReport

              • Avatar JCog in reply to Roger
                Ignored
                says:

                Roger

                Thanks for the reply. Reading back through my posts I was a little concerned that I came off as too adversarial. If that is the case, then I would like to apologize. It was not my intent.

                On to a point about the proposed privatization of Government services. Having spent 14 years in the military, and 7 yrs. as a correctional officer in the NCDOC I have seen the dangers of privatization up close. NC contracted out to privatize several of her prisons during the 90’s. By the time we realized that we desperately needed to re-assume control of these prisons we were narrowly able to avoid mass escape attempts and were left facing millions of dollars in law-suits. In Iraq I continuously saw instances where KBR employees were payed to do work that left qualified military personnel sitting on their hands collecting a check for nothing (cooks), or just the opposite a KBR employee gets 100,000 a year to sit in an air-conditioned guard shack while military personnel actually provided security. It occurred to me then, and I still believe, that this is a huge waste of money, and is the picture of inefficiency.

                In NC most of our road work is now handled by private contractors. The roads are in much worse shape than they were 30 years ago, and apparently (if you believe our politicians) have become an unbearable financial burden.Report

              • Avatar James Hanley in reply to JCog
                Ignored
                says:

                JCog,

                I’m a staunch advocate of experimenting with contracting out and privatization (technically two slightly different approaches).  But experiments don’t always produce fruitful results.  I have become convinced, in agreement with you, that privatizing prisons is a failed experiment that should be abandoned.

                As to your military example, I think we can fairly ask the question of whether the cook example is really a case against privatization or a case against the military having its own cooks.  I don’t pretend to have an insight on the answer–it depends on costs and benefits.  Is the military paying to put people through basic training just to have them become cooks (or do cooks actually come through a different path)?  If so, does that make sense?  Are the cooks likely to be needed in the line of duty at unpredictable times?  If so, it might make sense to have every cook be a rifleman (if the Marines here will forgive me for co-opting their phrase); if not, perhaps contracting out is better.

                Certainly the duplication is pointless.  And certainly the no-bid contracts the Bush White House gave out were a damned fiasco.  But then I’ve never met a libertarian who thought the government should be giving out no-bid contracts.  (There may be some, but I haven’t met them, and wouldn’t be very polite to them if I did!)Report

              • Avatar James Hanley in reply to JCog
                Ignored
                says:

                JCog,

                I wonder if places like Somalia would not better fit the libertarian ideal of a regulation and subsidization free market, and if so why exclude them.

                Short answer: “No,” and “For Very Good Reasons.”

                Longer answer: Somalia is a warlord state.  The warlords are competing for the claim to “a monopoly on the legitimate use of force” (Max Weber’s definition of government), and are the de facto governments over the territory they control.  They do regulate and subsidize, just not in the orderly administrative manner to which we are accustomed, but arbitrarily and randomly.  Libertarians aren’t big on arbitrary governments whose approach to regulation is to shoot, then investigate.

                This also makes me wonder why, if free-markets are so great, China is the fastest growing economy in the world?

                Two reasons.  First, labor mobilization.  This is the movement of people from low-margin labor intensive activities (e. g, subsistence farming) to higher-margin capital intensive activities (e.g., manufacturing).  Governments can create that kind of economic growth pretty well because they have a monopoly on the legitimate use of force–they can just order people off the farms and into the factories.  Labor mobilization was the cause of the fantastic growth rates that the USSR, Taiwan, and S. Korea all experienced at one time. But after that it requires real productivity increases (output per worker) to sustain economic growth, and governments aren’t good at that because it requires innovation and good financial incentives.  The USSR, Taiwan and S. Korea all hit walls when their labor was fully mobilized–Taiwan and S. Korea eventually got past the wall, the USSR didn’t.  The USSR remained a brittle inflexible government-dominated economy.  Taiwan and S. Korea became more free-market oriented.  The good news for China, for the time-being, is that it still has lots of labor to mobilize, just because it’s so gosh-darn big.

                Second, China is in fact becoming a more free market country.  It still has lots of government-owned businesses, but it is not actually communist anymore.  That is, production goals aren’t set politically.  Even their government-owned industries are operating in world markets, reacting to world demand.  And they have a surprisingly large and continually growing private sector that competes in both domestic and international markets.  That’s also good news for China–once it’s fully mobilized it’s in a position to keep improving its productivity.  It may not be a simple and painless transition, but it will be more like Taiwan’s and less like the Soviet Union’s.Report

              • Avatar JCog in reply to James Hanley
                Ignored
                says:

                James Hanley,

                Doesn’t any system that requires a constant increase in productivity seem doomed to failure. I mean logically a person can only produce so much before an increase becomes physically impossible. To be clear I am not saying that we are at that point just that the point exists.

                As to the failure of the USSR I would submit that it had more to do with getting caught in an arms race that they absolutely lacked the resources to maintain, than with the economics of a command economy. Once again to be clear I am not a proponent of a command economy just trying to be historically accurate.Report

              • Avatar James Hanley in reply to JCog
                Ignored
                says:

                Doesn’t any system that requires a constant increase in productivity seem doomed to failure. I mean logically a person can only produce so much before an increase becomes physically impossible.

                Good question.  That gets right to the heart of the fundamental economic concept of increasing marginal costs and decreasing marginal returns.  That is, increases in productivity will get harder and harder to achieve, and each incremental increase will cost more to achieve. In fact some of the early economists thought we’d reach that point eventually, and there everything would stagnate.

                But I think there’s light at the end of the tunnel for two reasons.  First, the system doesn’t “require” constant increases in productivity; it just tends to produce them as a consequence of competitive pressure.  And that means the system is better than a non-competitive one which doesn’t tend to produce such increases.

                Second, while we naturally tend to talk about productivity in broad terms, as though it’s something that applies to the whole economy, it’s actually product/service specific.  That matters because certain products/services become obsolete.  We don’t really need increased productivity in creating bowler hats for the League’s Gentlemen, because almost nobody buys bowler hats today (and the few that do buy it as a pure luxury good, so are willing to pay higher prices for it).  The larger argument here is that the system is dynamic–if maximum productivity is reached for one product or one sector of the economy (how do you increase the productivity of a massage therapist, for example?), it doesn’t mean it’s reached for all sectors of the economy.  So the economy will never stop growing due to productivity constraints because the mix of goods and services is ever-changing.

                That’s my view of the world anyway.Report

              • Avatar Roger in reply to James Hanley
                Ignored
                says:

                James,

                Smokin’ hot answer! Plus 1Report

              • Avatar James Hanley in reply to James Hanley
                Ignored
                says:

                Thanks, Roger.  I spend an inordinate amount of time thinking about that concept and looking at what’s actually going on in the world through that lens.Report

              • Avatar Roger in reply to James Hanley
                Ignored
                says:

                James,

                You should write a published article on this topic.

                BTW, in the virtual world — which we are increasingly shifting toward — the dimensions for experimentation are even greater. It is an even bigger infinity so to speak. But you probably already thought about that too.Report

      • Avatar James Hanley in reply to JCog
        Ignored
        says:

        All my liberal grad school friends luuuvvved them some defined benefit pensions, and distrusted defined contribution models because the old folks could get screwed if the stock market collapsed.

        Of course if your company goes under your defined benefit pension just might go the way of the dodo, something they never seem to figure out because they have a static view of markets and really think that there are firms that are too big to actually face competition.

        I’m in a defined benefit plan, and thankful for it.  Not that I really expect my employer to go under, but 1-2 small colleges fail every year, and as of 5 years ago we were on that path (enrollment having shrunk by more than 1/3).  We’ve turned around now, but who can predict what the future holds?Report

        • Avatar DensityDuck in reply to James Hanley
          Ignored
          says:

          Another big attraction of the defined-benefit you don’t have to think at all about managing it.  If you don’t have a lot of confidence in your ability to handle things that have, like, numbers and stuff, the notion of “work forty years and then you get your salary forever after” seems like a great deal.  A 401(k) or similar defined-contribution plan is always sending you these papers and statements and fund allocation options and tax forms and ohmigod why is this so complicated all I want is to know that when I retire I’ll have money!

          (of course, there’s also the flip side of the concern you raise–not only could I get screwed if the market tanks, but some guy who made the right investment choices could end up with more money than I got.  And that Just Will Not Do.)Report

          • Avatar Roger in reply to DensityDuck
            Ignored
            says:

            Duck,

            It’s all good. We’ll just redistribute. The marshmallow eaters always get a second helping.Report

          • Avatar James Hanley in reply to DensityDuck
            Ignored
            says:

            DDuck,

            True, I hate figuring out what to do with my money.  But of course with a defined-benefit plan I’m placing my trust in someone else, and they may not actually do that much better of a job.  I keep my stuff to pretty safe investments that mostly–although not all–track the market average, because most people who try to beat the market average take a bath.  That includes pension fund managers who think they’re particularly clever.  (See, e.g., A Random Walk Down Wall Street.)Report

  13. Avatar Jaybird
    Ignored
    says:

    One of my friends recently asked what classes I took to become a system administrator and I winced because I was lucky enough to get hired at a job where I made 12 bucks an hour but I knew how to type and the people at the job were desperate enough for people that they were willing to train me on the job… and so I went from knowing how to use Windows 95 because I owned it to being able to… oh, I don’t know what would make a good example… read a tombstone file and figure out if the CPU was bad or if the memory was bad. Do disk space management stuff. Do hardware management stuff. Do data management stuff.

    If the government is a place where they’re willing to take people with High School degrees and train them on the job, with Associate’s degrees and train them on the job, or with Bachelor’s degrees and train them on the job, then the government is actually being *SMARTER* than the private sector.Report

    • Avatar Kim in reply to Jaybird
      Ignored
      says:

      best “class” for sys admin is called being a cluster admin at school, so far as I can tell.

      Thing is? most places want someone responsible in those jobs… it’s only the desperate that are willing to train folks.Report

      • Avatar Jaybird in reply to Kim
        Ignored
        says:

        I suppose, every single computer lab I’ve worked with, from the biggest and baddest (thousands of systems, hundreds of workstations) to the dinkiest (let’s say 5 servers and a dozen workstations) have all had deliberately non-standard setups to deal with kludges of kludges of kludges and the oldest sysadmins told stories of the guys who were old when they started and how they set up such-and-such and how it’s still working. Sure, the *NEW* systems were built according to best practices… but the “legacy” ones? The ones that did all of the heavy lifting? They were all special.

        That was true for the lab with the dot matrix printers, that was true for Military Contractor, that was true for the data center for International Conglomerate.

        The culture was as important (if not more important) than the language.Report

        • Avatar BlaiseP in reply to Jaybird
          Ignored
          says:

          I always tell n00b coders and IT guys “It is the hallmark of the idiot in this business that he wants to reinvent the world.   Nobody starts out to implement a kludge.   When you find ugliness in the course of your work, restrain your urge to complain about it and start documenting it.   You will always find the ugliness is an artifact of some unpleasant compromise.   Until you have fully come to terms with that compromise, you will never be able to un-kludgify it.”Report

      • Avatar BlaiseP in reply to Kim
        Ignored
        says:

        Not from what I’ve seen in all these 28 years of consulting.   Firms are getting fed up with the products of college IT programs.   Most of these people are completely incapable of supporting an existing IT infrastructure.   They have no concept of version control or backup methodologies or user admin or iptables or how to set up anything new without breaking everything else.   They can’t talk to the DBAs or the software people, blankly ignorant of configuring web servers or services or deployment tools of any sort.   They’ve got no business sense and can’t give reasonable estimates for anything.   They’ve got no mainframe or capacity planning experience at all.   Most of all, they lack any political horse sense.

        These skills can be taught and they ought to be taught in context.Report

    • Avatar Fish in reply to Jaybird
      Ignored
      says:

      I took typing in high school.  Then I spent nine years in the military supporting various computer systems (IRIX being the only notable here).  When I separated, I got lucky and was hired on by a friend who had separated a few months before me and had been hired to staff a second-tier help desk (my part of it was HPUX and Red Hat Linux).  Got pissed at my boss for being a young wanker exec and took a temp position (more IRIX, some Solaris).  When that contract ended, I lucked into another opening where a friend worked and stayed there for six years (Solaris, Windows, networking, some management).  When that job ended, my boss got me in with the company his wife works at (Solaris, Solaris, Solaris, learned how to write scripts in Korn shell, and some systems security).

      So, to summarize:  typing, the military, contacts, and a lot of luck.  That’s how I became an admin.Report

  14. Avatar Dan Miller
    Ignored
    says:

    Does the study break out how much of this is due to the difference in unionization rates? The private sector has engaged in a pretty vicious run of union-busting for the past few decades, and my sense is that the same thing hasn’t happened in government, but I don’t know how big a factor this is in the overall picture or if that would even be possible to break out.Report

    • Avatar Mark Thompson in reply to Dan Miller
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      says:

      Dan: It does not, but my assumption is that this is a pretty sizable chunk of the difference, and is probably close to all of the difference amongst those with a HS diploma or less.Report

    • Avatar Roger in reply to Dan Miller
      Ignored
      says:

      Dan,

      By a “vicious run of union-busting” I take it you mean that in a competitive market the unions priced themselves out of existence?Report

      • Avatar Mark Thompson in reply to Roger
        Ignored
        says:

        The decline in private sector unionism in this country actually traces back to the Taft-Hartley Act and the Landrum-Griffith Act, which are nothing if not the use of the heavy hand of the federal government to bust unions, whilst the rise of Right-to-Work laws are nothing if not the heavy hand of state governments to bust unions by interfering with their right of contract.  Except for about 20 years after passage of the NLRA (which was undoubtedly a pro-union government intervention), and a brief period in the mid-to-late 1910s (when unions were basically unregulated one way or the other), federal labor law has been far more useful in union busting than the opposite.

        That’s not to say that we’d have 50%+ unionization in this country if we repealed all labor relations laws tomorrow.  But there’s a pretty good chance we’d go up to around 15-20% unionization.Report

        • Avatar Stillwater in reply to Mark Thompson
          Ignored
          says:

          Nice response Mark. Concise. Clear. Devastating.Report

          • Avatar Mark Thompson in reply to Stillwater
            Ignored
            says:

            Thanks Still.  I confess that the linked post is one of my 10 favorite posts that I’ve written here, maybe one of my favorite 5.Report

          • Avatar Roger in reply to Stillwater
            Ignored
            says:

            Stillwater and Mark,

            I am not following. I am not a fan of government interference in peaceful negotiations between workers and firms.

            Do we agree workers have a right to unionize? Yes

            Do we agree neither side should use violence or threats of violence to accomplish their goals? I think the answer is yes.

            Do we agree firms have a right to replace or fire striking workers? I assume the answer is yes here, but perhaps I assume too much?Report

            • Avatar Mark Thompson in reply to Roger
              Ignored
              says:

              Do we agree firms have a right to replace or fire striking workers? I assume the answer is yes here, but perhaps I assume too much?

              Even in an idealized market anarchist utopia, the answer to this is “it depends on the contract that the organized workers have negotiated with the employer.”  And of course, even where the contract lacks language protecting the right to strike and the employer does hire scabs in this market anarchist utopia, the striking workers have plenty of purely non-violent means at their disposal to put pressure on the employer, not least of which is the secondary boycott and wildcat strikes, though there are no shortage of others.  In other words, in such a hypothetical utopia, the employer’s right to fire striking workers can be rendered effectively meaningless.

              Taft-Hartley and the Wagner Act (which admittedly has other provisions that make it generally more pro-union than anti-union) outlaw these methods of obtaining leverage over the employer (see also this excellent guest post from Kevin Carson).  Then  of course there is the whole issue of “Right to Work” laws that are nothing other than legislative interference in the freedom to contract, not to mention the provisions of Taft-Hartley that prohibit contracts creating closed shops.   And finally is the issue of how the Sherman Act and state laws were used as an especially effective way of busting unions in the decades prior to the Wagner Act.  Indeed, perhaps the first significant pro-union legislation in this country was the Clayton Act of 1914, which was an attempt to reduce the powers provided by the Sherman Act – in other words, it was an attempt to scale back government intervention in the labor markets; unfortunately by 1920 the Clayton Act had been basically read out of existence by the courts.

              The point here is that your operating assumptions, “that in a competitive market the unions priced themselves out of existence,” are wrong, albeit commonly held.  To the contrary, the history of labor relations in this country is that unions are quite capable of thriving in a competitive market.  Management, of course, does not like when unions thrive regardless of whether those unions are thriving in a competitive and free market (or indeed, because of a competitive and free market).  It has thus more often been the case in this country that management has sought and obtained market interventions, including many that are truly offensive to the First Amendment, to protect itself from unions than unions have sought and obtained market interventions to protect themselves from management.

               

               Report

              • Avatar Roger in reply to Mark Thompson
                Ignored
                says:

                Mark,

                So I am reading your answer as: employers have the freedom to fire unless they have contractually agreed to waive this freedom. So we agree.

                BTW, I also agree that private industry workers should be able to get sympathy strikes from anyone dumb enough to go along with them. All you have to do is ensure they are all economically illiterate (not hard as economics is counterintuitive and mercantilism is an inborn cognitive bias).

                I still firmly believe that unions have and will continue to price themselves out of existence in a reasonably competitive market. Why should anyone pay more for a service or product? As long as there are no barriers of entry, a competitor can always enter the market with non-union wages and drive the union out. The union has to either reduce wages/benefits to the market rate (effectively neutering the point of the union) or they will go extinct.

                How can you argue with this logic? Where do unions thrive in free markets? Please let me know so I can invest against them — it will be like shooting fish in a barrel.

                Unions hate free markets, as did the guilds, and the King’s monopolists, and the old, sclerotic, incumbent industries.

                The true battle has never been between management and unions. It is between those pursuing progress and prosperity and those pursuing rent seeking and privilege. Union wages are about seeking a privileged position for those with jobs over those seeking jobs. It is about trying to force above market prices on consumers. It is about hoping everyone else plays fairly except those of us privileged to be in a union with government support.

                 Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                So I am reading your answer as: employers have the freedom to fire unless they have contractually agreed to waive this freedom. So we agree.

                I assume you mean “should have the freedom…”  In an idealized world, yes, absolutely.  But in a world where existing interventions dramatically favor management on balance, and where the inability to fire for striking is one of the few pro-union interventions, I’d say that undoing restrictions on the freedom to fire must and should be one of the LAST steps in deregulating labor relations.

                BTW, I also agree that private industry workers should be able to get sympathy strikes from anyone dumb enough to go along with them. All you have to do is ensure they are all economically illiterate (not hard as economics is counterintuitive and mercantilism is an inborn cognitive bias).

                If secondary boycotts have a tendency to work pretty well, this does not suggest economic illiteracy on the part of the boycotters, but rather, to the extent such success contradicts economic theory (and I’m not at all certain it does), suggests that economic theory is wrong.

                I still firmly believe that unions have and will continue to price themselves out of existence in a reasonably competitive market. Why should anyone pay more for a service or product? As long as there are no barriers of entry, a competitor can always enter the market with non-union wages and drive the union out. The union has to either reduce wages/benefits to the market rate (effectively neutering the point of the union) or they will go extinct.

                In answer to the question in this paragraph, “because the alternative is worse.”  Imagine, if you will, an unannounced wildcat strike that takes the employer by surprise.  How long will it take that employer to hire a new set of employees?  Who is going to train those new employees?  How long will it take before those new employees are reasonably competent?  How much money will the company lose in the meantime?  Enough to go out of business or will it at least be shut down long enough that its reputation is permanently tarnished with its customers?  At that point, doesn’t it make more economic sense to cut its dividend or executive salaries or capital investments in order to pay a little more for labor? Doesn’t it make even more sense to cut those other items a bit more and to perhaps become a closed shop in order to get the union’s agreement to never again try any kind of work stoppage or wildcat strike or slowdown for the duration of the agreement?

                As for whether a competitor will always come in and drive unionized shop out of business, this ignores a lot of things. First, the claim is disproven by the fact that UPS remains competitive with Fedex. Second, it ignores the ways in which firms can adjust for higher labor costs without reducing competitiveness – they can, for instance, try to compete on quality; or they can cut their profit margins such that they are perhaps less lucrative investments but still safe investments.  Third, it assumes the competitor will manage to avoid unionization, and will do so without having to increase its own labor costs by enough to ward off the threat of unionization.  When the new competitor is small, this will no doubt be of little concern.  But if the new competitor is to displace the unionized company, it will need to become big enough to serve that company’s larger customer base, and it will need to be able to obtain the economies of scale from which that larger company benefits.  If it tries to do this while paying significantly less than the unionized company it seeks to unseat, how long will it take before a good sized block of its workers look around, see how much the unionized workers are making, see the disproportionate profits their company is making, and decide to go wildcat on their own? Of course, the upstart company can head this off at the pass by just making its wages comparable or, if it places a premium on stability, greater than the unionized company, but the effect is more or less the same: the upstart is going to need to give up its competitive advantage in relatively cheap labor, and will have to find another way to put the unionized company out of business.

                The supermarket industry is heavily unionized.  One of the more successful chains is of course Whole Foods, which is not unionized, and which has a stated goal of avoiding unionization.  How do they succeed in doing this? In no small part, they achieve this goal by paying comparatively high wages and providing excellent benefits.  Indeed, they don’t even bother trying to compete with their unionized competitors on price, but instead focus on competing on quality.

                How can you argue with this logic? Where do unions thrive in free markets? Please let me know so I can invest against them — it will be like shooting fish in a barrel.

                Unions hate free markets, as did the guilds, and the King’s monopolists, and the old, sclerotic, incumbent industries.

                I think we agree that an idealized free market does not and has never existed, but instead markets exist on a spectrum of less free to more free.  But using the Heritage Foundation’s Economic Freedom Index, in which the US is currently ranked 10th, I see that of the countries ahead of the US, Australia, New Zealand, Switzerland, Canada, and Ireland all have unionization rates two to four times higher than ours, with Chile slightly higher than the US.  I could not find unionization statistics for Hong Kong, Singapore, or Mauritius. But of the top seven “most free” countries according to the Heritage Foundation for which I could find unionization statistics, the US is the least unionized and is dramatically less unionized than all but one.

                As for whether unions hate free markets, I just would like to point out that Lech Walesa was a union leader.

                The true battle has never been between management and unions. It is between those pursuing progress and prosperity and those pursuing rent seeking and privilege. Union wages are about seeking a privileged position for those with jobs over those seeking jobs. It is about trying to force above market prices on consumers. It is about hoping everyone else plays fairly except those of us privileged to be in a union with government support.

                I fail to see how workers collectively organizing to use their economic power over their employers to maximize their wages, benefits, etc. (aka, their “profits”) is rent-seeking in any qualitatively different way than employers using their economic power over employees to maximize their profits.

                Moreover, you characterization that it’s about trying to set above-market prices is non-sensical.  The fact is that labor costs are part of market prices for goods.  More importantly, though, labor is and should be viewed as a market unto itself.  Perhaps it would help to think of it this way: unions are, in effect, for-profit businesses unto themselves that are in the business of providing relatively specialized labor services in which “capital” is provided in relatively equal shares by each of the shareholders in the form of their respective skills, time, and work ethic.Report

              • Avatar Stillwater in reply to Mark Thompson
                Ignored
                says:

                Mark, may I suggest you work this up for a post? There’s lots of really good stuff in here worthy of further discussion, especially since Roger has – I think – expressed a line of economic thinking that’s very prevalent.Report

              • Avatar Mark Thompson in reply to Stillwater
                Ignored
                says:

                Thanks, Still.  I was kind of thinking of doing exactly that, just need to figure out how to organize it all better for a front page post. I’ve also got another post percolating through my head that uses this discussion as the jumping off point.Report

              • Avatar Roger in reply to Mark Thompson
                Ignored
                says:

                Mark,

                Great answer on the freedom to fire question. Could you share which specific current interventions are management biased? Just asking. I agree poorly-thought-out deregulation is dangerous.

                I also liked your answer on wildcat strikes. My guess is that in a free market I would get my employees to sign a no wildcat strike clause with some type of collateral held to ensure it is enforced. Just spitballin’

                Though I am oddly a fan of the UPS (despite stories to the contrary, I always get good service and reasonable prices from them), I am not sure they are competing fairly with anyone.  Let’s not go there though, unless you want to.

                By competitiveness, I do mean price for a given level of quality. I get your point about assuming all competitors don’t unionize, but again it seems to me that this dynamic would attract a constant barrage of upstart competitors, especially ones with anti-strike contracts or ones with heavier mechanization or lower wage scale locales. The process would not be quick or perfect, but I think the dynamic pulls the market toward competitive wages. Again, great response though.

                The supermarket industry is a good counterexample. I am not familiar with the industry enough to refute your point. Anyone else know why supermarkets don’t resist unionization in right to work states?

                Your Heritage argument was especially apt. This seems to dispute my statement that free markets kill off unions. I need to retract that statement until/unless I find information to the contrary. Consider it retracted.

                I fail to see how workers collectively organizing to use their economic power over their employers to maximize their wages, benefits, etc. (aka, their “profits”) is rent-seeking in any qualitatively different way than employers using their economic power over employees to maximize their profits.

                We are agreed here now. I am fine with voluntary unionization and voluntary firing. My argument was contingent upon unions being dependent long term upon the use of force. If your Heritage data is correct and i am wrong long term on that, then unions can thrive in a voluntary, non-exploitative market.

                Finally, you and i agree that labor can be viewed as a market unto itself. Absent violent coercion, I concur that the market is basically working.

                I wish everyone in this forum argued as persuasively as you. I love it when someone changes my mind and expands my horizons. Thanks. You have given me hope that unions can thrive in a free market. You made my day.

                Time to hit the water….Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                I second that, Stillwater. Great idea for a front page. I was impressed.Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Thanks for this Roger.  A response such as this always takes a lot of courage.

                I’ll try to get something together for the FP over the next day or two, but need to drop out for the rest of the day.Report

              • Avatar BlaiseP in reply to Roger
                Ignored
                says:

                Thirded.   Though it sorta stands on its own, as is.Report

              • Avatar wardsmith in reply to Roger
                Ignored
                says:

                Mark, When you write that article could you include Germany? Their laws are about as union friendly as I can think of (including a requirement that unions are represented on the board of directors) so I wonder now what rank they fit into that Heritage report. Also do you have a link for same, or would that be stealing your thunder?Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Ward- I’m not terribly familiar with other countries’ unionization laws, but I’ll see what I can do.

                Links:

                Heritage Foundation Economic Freedom Index 2011.  Germany ranks a semi-respectable 26.  “Labor Freedom” is their second lowest score, presumably because of the laws to which you refer, so I assume they’d rank a few spots higher without those laws.

                Labor Union membership statistics from the OECD are here (you want the statistic entitled “trade union density”).  Germany’s unionization rate is pretty average, and relatively low for a European country, currently around 19 percent and declining.Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Slight correction – Switzerland and Australia’s unionization rates are only about 50% more than the US’, not double.

                Also, I should mention that these are statistics for both the private and public sector – I don’t know of any good numbers that break down just private sector unionization.  Presumably, given that private sector unionization in the US is a fraction of the public sector unionization rate, breaking the numbers down to just the private sector would create an even bigger discrepancy between the US and the above-referenced countries.

                I didn’t realize that France was so not-unionized.  That is completely the opposite of what I would have assumed.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Mark,

                I still can’t find the unionization rates of grocers in right to work states, but was surprised to see the unionization rate is only 22% in this industry countrywide. My guess is Walmart and new competitors are going to continue to drive this down, especially in states where workers aren’t forced to join against their will.

                Finally, the Heritage Data actually works against your theory. One dimension is Labor Freedom. The US — which you point out has lower private unionization rates — has significantly higher scores on labor freedom than any of the other countries you cite with higher unionization rates. The US overall score is held down by other factors.

                Still looking forward to your front pager…Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Roger: On the “labor freedom” issue, I should mention that Heritage uses the term “labor freedom” in a somewhat Orwellian fashion.  The metrics they use for “labor freedom” are in reality properly categorized as “employer freedom”; they do not incorporate into their analysis the amount of restrictions on actual labor.  I think the rankings are still plenty useful since they are as broad a measure of regulatory control over an economy as there exists, but any such measure is going to necessarily be incomplete, and the data that Heritage leaves out are necessarily going to reflect their own ideological biases.  But I think that quite strengthens my point: if they did include restrictions ON labor, the US would likely rank a little bit lower.  Anyhow, here are the metrics they use for “labor freedom,” which I think will show you what I mean when I say they’re really metrics for “employer freedom”:

                Six quantitative factors are equally weighted, with each counted as one-sixth of the labor freedom component:

                • Ratio of minimum wage to the average value added per worker,
                • Hindrance to hiring additional workers,
                • Rigidity of hours,
                • Difficulty of firing redundant employees,
                • Legally mandated notice period, and
                • Mandatory severance pay.

                Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Mark,

                Indeed, this does measure employer freedom. It also measures some dimensions of employee freedom (freedom to take a job below an arbitrary minimum). I strongly support an employer’s freedom to hire and fire and set wages and conditions.

                Similarly I support the worker’s freedom to quit, to bargain collectively, to join or refuse to join unions, to work above or below minimum wage, and to strike in sympathy. When you develop your post, any comparisons of these freedoms by country or state would be helpful to your case (that unions can thrive in a true free market).

                Right now, my initial position was probably too extreme, but it looks like unionization is negatively correlated with freedom.

                 Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Roger: I think if you plot the numbers you’ll find otherwise. There are four OECD countries with lower unionization rates than the US (2008 numbers used here since that’s last year with complete OECD data): Turkey, South Korea, France, and Estonia.  Those countries rank 73, 31, 67, and 16 on the Heritage Foundation’s current rankings.

                By comparison, the four OECD countries with the highest unionization rates, Iceland, Sweden, Denmark, and Finland, all rank in the top 30 on the HF rankings, with Denmark(11, one spot behind the US) and Finland(17) both in the top 20.

                If we go to the top 10 most and top 10 least unionized OECD countries, it gets a little more muddled, though more unionized countries still come out ahead.  The next five least unionized countries are: Chile (HF 7), Spain (HF 36), Poland (HF 64), Mexico (54), and Hungary(49).  The next six most unionized are: Norway (40), Belgium (38), Luxembourg (13), Italy (92..blech!), Ireland (9), and Austria (28).

                So, except for Italy, all of the 10 most unionized are at least in the top 40 HF rankings, with 4 in the top 20.  By contrast, five of the 10 least unionized are outside of the top 40, though they still get three in the top 20.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Cool. Let’s continue this when you move it to the FP. Great discussion.  This site is great because people like you and James and Stillwater and Patrick and Creon have such great ability to back diverse views.Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Roger, Stillwater, Blaise, et al:

                I’m hoping to do the requested post tonight.  It’s inevitably going to cover a lot of the same ground as this thread plus the two original posts from last year, though I’ll try to supplement as much as possible.  That said, this thread has covered an awful lot of ground.  Is there a particular claim within this thread that you’d like me to focus on?  It would certainly help if I could get some direction on that.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Mark,

                I think the interesting angle relates to “Can unions thrive in a free market?” I boldly/foolishly (delete whichever does not apply) proclaimed they cannot. You argued persuasively that they can.

                A lot of libertarian resistance to unions is going to come out of this belief. We are all hunky dory on voluntary cooperation between workers, but down deep many of us strongly suspect absent coercive force supplied by evil workers or government jackboots, that unions are really just cartels and that they will collapse of their own weight in reasonably free markets.

                It is a good question with lots of spin off potential (which seems to be what lights up the discussion in the LOOG.)

                I’m reading up on the topic now. Fascinating!

                 Report

              • Avatar Mark Thompson in reply to Roger
                Ignored
                says:

                Thanks, Roger.  Will do.

                Also, above I mention that this thread had inspired me to think about a tangentially related post as well.  This comment:

                A lot of libertarian resistance to unions is going to come out of this belief. We are all hunky dory on voluntary cooperation between workers, but down deep many of us strongly suspect absent coercive force supplied by evil workers or government jackboots, that unions are really just cartels and that they will collapse of their own weight in reasonably free markets.

                ….pretty well gets at that tangentially related post, or at least a small part of it.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Mark,

                When you started pulling the rug out from under me on the first belief, I logically had to bail on the rest. Libertarians think by building up on their foundations. Just watch ’em. They are little master building beavers.

                If you take out our foundation it all crumbles. This is what infuriates us when arguing with most progressives. We try the same approach on them and they just laugh and go on.

                I can give about a hundred examples a week just from LOOG.Report

  15. Avatar BlaiseP
    Ignored
    says:

    I watched as Blue Cross / Blue Shield of North Carolina attempted to re-incorporate as a for-profit, from its not-for-profit status.   It did so for one reason, so it could break its contracts with the state workers of North Carolina and come back around to charge all those previously-insured folks about four times more per policy.

    The State of North Carolina got wind of it and refused their reincorporation paperwork.

    A not-for-profit isn’t a 501(c)(3) non-profit.   The not-for-profit can make money and does, hand over fist.   Megan McArdle is, to put it charitably, an idiot.   If other sorts of workers had strong cohesion as the state workers of North Carolina, we’d all have higher wages.Report

    • Avatar Roger in reply to BlaiseP
      Ignored
      says:

      Blaise,

      It’s not about wages, it is about productivity.Report

      • Avatar BlaiseP in reply to Roger
        Ignored
        says:

        It is about wages.   The German worker makes twice what the equivalent American worker makes and is twice as productive.Report

        • Avatar James Hanley in reply to BlaiseP
          Ignored
          says:

          It is about wages.   The German worker makes twice what the equivalent American worker makes and is twice as productive.

          These numbers are in fact not correct, but let’s take them at face value for the moment.  If the German worker is in fact twice as productive as the American worker then he wil-ceteris paribus–get paid twice as much.

          So it is about productivity; wages are just the effect.Report

    • Avatar Roger in reply to BlaiseP
      Ignored
      says:

      Blaise,

      If a company wants to charge 4 times as much for its product it should. If consumers of that product want to buy something better from someone else for less, they should. The dynamic leads — imperfectly — to better products produced more efficiently.

      Prosperity comes about by producing things of value. It is not about wrangling over fixed size slices of the pie. Demanding higher wages does not create prosperity, it leads to higher priced solutions, fewer solutions produced and less employment.Report

      • Avatar BlaiseP in reply to Roger
        Ignored
        says:

        Heh.  Roger, I find the Real World, the one where cause and effect may be determined, trumps all these mickey mouse Shoulds and Oughts.   There’s something out there in the Real World, the one I live in, called the Law of Large Numbers, which dictates all probability calculations related to insurance of any sort.

        Prosperity arises from the ability to buy something cheap and sell it expensive.   Producing is entirely irrelevant.   There are no other considerations beyond Buy Low / Sell High.    Those with power are capable of commanding a higher markup.   Nor do higher wages lead to lower employment, that’s also a false causality.   Higher wages mean the workers get a larger slice of the profit pie and that’s all it means.Report

        • Avatar Roger in reply to BlaiseP
          Ignored
          says:

          Blaise,

          Your first paragraph contained several dozen words and said absolutely nothing. It was devoid of any content. If you want to discuss how insurance works, just let me know. It is probably way off topic though.

          Prosperity comes from solving life’s problems. This comes from getting natural resources and figuring out how to convert these resources into solutions for consumers (and we are all consumers). In general wealth (solutions to life’s problems) comes about by producing something consumers will value (turning raw ingredients into iphones, houses, art, surfboards, etc) and exchanging something of lower value for something of higher value. I specialized in designing insurance products in exchange for all the other desires I want fulfilled. Division of labor and exchange allows us to become better and smarter at producing. Prosperity is created.

          Your buy low/sell high is almost true. It reflects the positive sum nature of voluntary exchange and distribution.

          Producers don’t determine profit based upon power to “markup.” Producers can charge whatever they like, but as long as another producer is free to enter the market and consumers are free to shop, the price of the product and the profit will be constrained (the higher the “markup” the greater the incentive for competitors to enter and consumers to switch).

          The same dynamic works to determine wages. Producers compete for them and drive up wages based upon their productive abilities.

          A few hundred years ago we had one tenth the population, one tenth the prosperity per person and lived one half as long. The path to progress came about by creating value, not fighting over the spoils.Report

          • Avatar BlaiseP in reply to Roger
            Ignored
            says:

            ROFL!   Prosperity never arose from solving life’s problems.   Prosperity arises from convincing people they have problems for which you happen to have the solution.   Natural resources my ass, most of the world’s money is made in buying and selling.   Creating value, hee hee.   Value is perceived.

            See, Roger, I really must return you to the Real World, the one where people actually make and lose money.   Freedom, eet eez to larf, anyone is free to lose as much money as he likes, trying to compete against someone else with better connections.   Productivity has no bearing at all on moneymaking and never did.   You try making money selling surfboards or software and see how it goes, trying to put that board on some retailer’s shelf or get that app running on his server farm.   You’ll learn it’s the salesman who makes most of the money, not the guy with the mask sanding down that board.Report

            • Avatar DensityDuck in reply to BlaiseP
              Ignored
              says:

              It’s like a base-model Honda Civic with a body kit and a big muffler.  Overdecorated and noisy, but ultimately it doesn’t go anywhere very fast.Report

              • Avatar BlaiseP in reply to DensityDuck
                Ignored
                says:

                Well, the salesmen are different than you and me.   I useta consult on a product called SeeBeyond.   Their salesmen could sell ice to Eskimos.   The demos were great!  I used to work for them directly but realized I was better served to leave and start up my own consulting practice, just waiting for their coders to fail.   A gang of four of us acquired the reputation as the go-to guys to kill off and replace SeeBeyond implementations.

                The money was great.   The politics required a hazmat suit.  By the time we’d gotten there, these poor silly bastards had spent at least half a million on this POS and it still wouldn’t work.

                Fun times.    I got out of it, simply because the pressure was killing me.   I like what I do now much better.Report

              • Avatar BlaiseP in reply to DensityDuck
                Ignored
                says:

                Apropos to nothing else, I’d like to hitch up the ground wire and reset our interaction bus.   It’s mostly been my fault we’ve been quarreling and I’m offering my apology for what’s gone on between us.Report

            • Avatar Roger in reply to BlaiseP
              Ignored
              says:

              Blaise,

              I would love to discuss this issue with you as I value your input. It may take a bit of time though, and we will need to be serious. We have very, very different views of what prosperity is and i think we could both benefit from a genuine discussion. Are you game?

              This discussion is of course open to all. The more the merrier.

               Report

  16. Avatar wardsmith
    Ignored
    says:

    f it took 80+ years to get to this point, then it’s going to take 80+ years to go back.

    Actually when we hit the brick wall as a country and go Greece, it won’t take but a few months to shed those employees. Or they might continue to go to their back-biting, infighting political jobs for the fun of it (and collect meaningless IOU’s in lieu of paychecks), but I suspect not.

    The biggest holder of “the public debt” is “the public”. However “the public” never purchased it, politicians did on their behalf. However the gov’t can’t run on IOU’s so the real purchase of real treasury’s occurs on an international market, providing “real” funds to operate our debt-ridden system.

    a theoretically comparable private sector company would be bankrupt already. This is the fundamental difference between comparing the apples of gov’t work and the oranges of private enterprise. Government Motors, er I mean General Motors wasn’t bankrupt /except/ when you considered their pension and health contractual obligations. Some legerdemain on the part of the Feds in that case plus willful disregard for the rule of law and bondholder’s rights allowed billions in obligations to evaporate overnight, however this trick will not be so easy when dealing with an entire country’s population.
    Report

    • Avatar DensityDuck in reply to wardsmith
      Ignored
      says:

      “General Motors wasn’t bankrupt /except/ when you considered their pension and health contractual obligations.”

      Same deal with the US Postal Service, by the way.  Without their required contribution to other government bodies’ pension plans, they were quite profitable.Report

      • Avatar Jesse Ewiak in reply to DensityDuck
        Ignored
        says:

        I’d also point out that the USPS is under pension funding obligations no other company or even governmental organization has.Report

        • Avatar Patrick Cahalan in reply to Jesse Ewiak
          Ignored
          says:

          Is this a note that the private sector is flying on speedballs and rotgut whiskey, or the public sector is in shackles and chains, or somewhere in-between?Report

          • Avatar Jesse Ewiak in reply to Patrick Cahalan
            Ignored
            says:

            Specifically, the USPS is in shackles beyond even other governmental programs. (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/13/AR2009071303237.html)Report

            • Avatar wardsmith in reply to Jesse Ewiak
              Ignored
              says:

              Jesse reading your link the National Association of Mail Carriers aren’t doing their members any favors. Well that isn’t entirely true, if you’ve been working for the post office for more than 20 years you are exceptionally well off. You have a gold plated pension and medical benefits and can work the system like crazy. I’m friends with a couple of mailmen, one like me is married to a woman from Taiwan. He takes two months paid vacations per year and through a convoluted scheme of “working the system” manages to make overtime for working normal shifts. And he’s one of the good ones.

              My favorite coffee shop has a fixture by the front door, a mailman who the owner tells me with no exaggeration is there typically six hours a day, sipping coffee, eating the pastries she cooks (marvelously delicious BTW) and reading his newspapers and magazines. The last two hours of his “shift” he easily delivers all his mail. Except of course when they “rate” his route. That’s when a supervisor walks the route along with him. You could easily grow moss under his feet on those days – he makes a sloth look like a cheetah.

              But only Roger and me are still foolish enough to believe a /union/ could cause a business to operate uneconomically. Clearly we don’t understand how said union is making life better for the whole planet.Report

              • Avatar Jesse Ewiak in reply to wardsmith
                Ignored
                says:

                I think every working American should have two months of paid vacation. So, that doesn’t impress me. Obviously, I think people shouldn’t be paid overtime if they aren’t really eligible, but on the level of problems in the federal government costing it money, I’m sure it ranks a little below massive tax deductions and subsidies mainly for rich people.

                As for the “anecdotal” story, I can tell you just as many stories about middle managers in the private sector who spend 4 hours on Facebook a day. I’m sure there’s a small amount of people who slack on their job at the USPS. That doesn’t mean all of their pay should be slashed and their benefits eliminated.

                The USPS is one of the best services on the planet period. After all, it can get a piece of paper from Seattle to Miami in three days for 35 cents at a 99% success rate. That’s worth good pay and benefits to me.

                 Report

              • Avatar Roger in reply to Jesse Ewiak
                Ignored
                says:

                Jesse,

                So you believe Joe citizen, who may or may not have vacation himself, should be forced to pay for two months of vacation for public service workers? Why, because it makes you feel good?

                If you think the universe is better where everyone gets paid to take vacations, then feel free to pay for your utopia out of your own wallet. Do not make us pay for your conscience, and we won’t make you pay for ours.Report

              • Avatar Jesse Ewiak in reply to Roger
                Ignored
                says:

                Nah, I’ll pay for a better society as we’ve done for the past 5,000 years, collective action through taxes.Report

              • Avatar Roger in reply to Jesse Ewiak
                Ignored
                says:

                Collective action where those with the government job privilege seek rents from those without. Why the average receptionist, accountant  or laborer has to pay for a privileged class is beyond me.  I guess i am more offended by unfairness.Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                I think the average receptionist, account, or laborer should be able to organize and collectively bargain just as public sector workers do (even though, I’ll note again, public federal sector unions don’t bargain pay and benefits). Indeed, I think any working American should be guaranteed at least a few weeks of paid vacation by federal fiat, like the rest of the industrialized world.Report

              • Avatar Roger in reply to Jesse Ewiak
                Ignored
                says:

                Jesse,

                Yours is like the “I Dream Of Genie” path to prosperity. Let’s just cross our arms and blink real hard.

                I’m fine with anyone collectively bargaining with anyone else as long as they don’t use violence or the threat of violence to force people to buy their service or to keep competitors from offering more for less.

                The problem is that absent violence (aka exploitation) your model breaks down. Consumers are sovereign. They will shop elsewhere.

                And with coercive violence it doesn’t even accomplish what you think it does. It just leads to higher prices, fewer workers, lower quality, lower short term profits, less investment and slower economic growth. It leads to the totally fubbed up world of pre-Adam Smith.

                I must repeat, value must be created. That means created, produced or exchanged.  There are no genies.

                Economic illiteracy has consequences. In your case you are actively arguing for the widespread impoverishment of humanity. There is a gray line between foolishness and evil. What you argue for may be from foolishness, but it leads to results which are horrible for billions of people.

                Other than that it is a good idea.

                 Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                Worked pretty well until greed took over the stockroom and deregulation took over the Beltway.Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                Oh, and I’ll let Sweden, Germany, Finland, and France know they run “pre-Adam Smith” economies.Report

              • Avatar Mark Thompson in reply to Jesse Ewiak
                Ignored
                says:

                @Roger:

                I’m fine with anyone collectively bargaining with anyone else as long as they don’t use violence or the threat of violence to force people to buy their service or to keep competitors from offering more for less.

                In all seriousness, would you support a repeal of Taft-Hartley, then?Report

              • Avatar Roger in reply to Jesse Ewiak
                Ignored
                says:

                Jesse,

                You (and Blaise) are pushing a zero sum view. The ultimate leftist bias.

                The reason the world has progressed over the past 250 years or so is that we have created wealth. We have found ways to voluntarily cooperate using the principles of the free market (and science) to produce more and more over time. Demanding higher wages, and imprisoning or shooting those that don’t play along is the path to impoverishment.  That is what the mercantilists, monopolists, guilds and rent seekers of various stripes have always done to stand in the way of prosperity.

                Coercive union monopolies are just one evil force. There are lots of others. I’m not so sure Europe is that much worse than the US. Certainly they are not pre- Adam Smith. If they wanted to increase GDP and reduce unemployment, I could give them tips though.

                Greed is when you try to enrich yourself at the expense of other values or people. That is what YOU are arguing for. I argue only for positive sum, win/win voluntary interactions. Mutual self interest.Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                So, wanting government workers to earn decent wages and wanting all workers to have mandatory vacation time is going on to the road to shooting and imprisoning my political opponents? Hrm. OK, screw it. End the welfare state, defund the Department of Labor. I’ve obviously been wrong this whole time.Report

              • Avatar Jaybird in reply to Jesse Ewiak
                Ignored
                says:

                It’s one thing to say that everybody should have someone with whom they engage in congress on a semi-regular basis.

                I think we’re *ALL* in agreement that everybody should have someone with whom they engage in congress.

                The problem comes when there is someone who, for whatever reason, cannot find someone with whom to engage in congress.

                Having the government force someone to engage in congress with this person would be tantamount to a very bad thing… even if we agree that everyone should have someone with whom they engage in congress.Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                Nah, I’m pretty sure mandating vacation times does not equal rape in any way, shape, or form.Report

              • Avatar Jaybird in reply to Jesse Ewiak
                Ignored
                says:

                You’re using terms that I am not.

                I will say, however, that if there is a zero-sum kinda thing going on, you’re not taking X without taking it away from someone else.

                Creating a narrative where you’re taking X *BACK* would make most people feel better about taking X, of course… but the question should be explored as to whether X is being taken from someone who took it from you and, if it ain’t, then you’re engaging in a very bad thing.Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                Please stop the BS. You thought you could make a clever little quip to compare workers demanding vacation time to rape and got caught.

                I’ll agree though. Vacation time does take a little power away from management. That’s a good thing, especially the tiny bit of power mandated vacation time would bring. Don’t worry, companies could still layoff thousands as profits increase tenfold.Report

              • Avatar Jaybird in reply to Jesse Ewiak
                Ignored
                says:

                Nope, I came up with a clever quip to demonstrate that there is more to the dynamic of someone taking extra vacation than just that one person taking a vacation.

                When you involve a second person, the dynamic changes, Jesse.Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                Well, it sure makes me wonder less why many women won’t hang out in a blog where comparing vacation days to rape is a perfectly reasonable comparison.

                But yes, somehow the rest of the industrialized world has managed to mandate vacation time without management the world over collapsing. Which tells me it’s not some massive burden on employers.

                Unless of course you believe telling employers to do anything is a massive burden.Report

              • Avatar Stillwater in reply to Jesse Ewiak
                Ignored
                says:

                You’re using terms that I am not.

                Ahhh. The old ‘I did not say those words’ defense. Perhaps you were – and remain! – ignorant of the ambiguity in the word ‘congress’. And if so, then Jesse was entirely wrong – and I’m sure he’ll be willing to agree – to attribute to you a level of intelligence sufficient to exploited that ambiguity for humorous intent.

                 Report

              • Avatar Jaybird in reply to Jesse Ewiak
                Ignored
                says:

                And, again, you’re using words that I never used. (Additionally, I never brought up sex/gender.)

                I am saying that “my deserving something” is not sufficient for me taking that something from someone else.

                If we (as in you and I) agree that I deserve something but you’re not willing to provide it… voting to have the government force someone (or multiple someones to provide a percentage of it) *IS* a violation.

                Even if we agree that I deserve it.Report

              • Avatar Jaybird in reply to Jesse Ewiak
                Ignored
                says:

                I certainly wanted to invoke a violation of personal sovereignty.

                I wanted to come up with an example of something that I think that everyone should have and an example of someone not, for whatever reason, having it.

                Forcing someone else to fulfill a particular role is a violation of this someone else.

                “Ah, but a vacation isn’t rape!!!!”

                Sure. It’s not. It’s not even close. But it is a violation. If “rape” is a topic that we shouldn’t discuss this lightly, fair enough. I’ll withdraw the comparison.

                Surely we all agree that everyone deserves a backrub at the end of the day, right?Report

              • Avatar Jesse Ewiak in reply to Jesse Ewiak
                Ignored
                says:

                No, rape of any gender is a violation. But I will note, for some weird reason, comparing things like vacation to rape tends to upset many women for some weird reason.

                Mandating vacation is a public policy you disagree with. Being forced to give vacation to an employee will not traumatize anybody. It would be a “violation” in such that society is a “violation” we’ve all agreed to so things aren’t anarchic.Report

              • Avatar Jaybird in reply to Jesse Ewiak
                Ignored
                says:

                Alright, I see that withdrawing the comparison was not sufficient.

                I hereby apologize to all readers for the comparison that I made.

                It was inflammatory of me to make the comparison that I did instead of merely provocative (which, for what it’s worth, was my original intent). I should not have made it and I apologize.Report

              • Avatar DensityDuck in reply to Jesse Ewiak
                Ignored
                says:

                You’re apologizing for having said “it” where the Knights Who Say Ni could hear you.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Mark,

                Beats me. It is a complicated law with lots of pieces and i am not very familiar with them. Furthermore, I would be cautious about poorly thought out deregulation. Regulations form complex intertwining systems. Pulling out one piece can lead to complex, unintended consequences.

                I am not trying to be evasive. I really do not know. In general I do not support regulations that interfere with voluntary interactions between rational adults. Those parts of T/H that violate these principles would probably be something that I oppose.Report

              • Avatar Jesse Ewiak in reply to Roger
                Ignored
                says:

                Interesting that you’re absolutely sure as you said up thread that we could privatize police, fire, and most departments of education and indeed, sell off Social Security and Medicare to the highest bidder, but you’ve got to think about making it easier for people to unionize.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                I am fine with making it easy for people to enter voluntary cooperative agreements.That definitely applies to voluntary, non violent unionization.  I support workers organizing however the heck they want and employers doing as they like as well.  Sorry, I am not “read up” on TH.Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Jesse,

                Cool we DO agree then.

                I too want people to have good wages, long happy lives and lots of free time. History reveals we have made phenomenal progress since the Wealth of Nations. As i wrote to Blaise, we have roughly 10 times as many people, 10 times better standard of living and lives that are twice as long. We have substantially better health care, more liesure and, most importantly, working toilets.

                But yes, your system only works if you force consumers to buy, force competitors out of the market and force prospective employees from accepting lower wages. Your path is coercive violence. Your path leads to wages and prices being set by political and bureaucratic elites. It makes me cringe.

                It is not too late to see the error of your ways. May I suggest you read Mises’ Human Action? It is about cooperation and human flourishing.

                 Report

              • Avatar Jesse Ewiak in reply to Roger
                Ignored
                says:

                Your system only works if I accept the employer as God with nobody having the power to say, “stop that crap now.” Yes, we have a higher standard of living than 1800. Large portions of that are due the evil government. For instance, how long would we have waited for decent wages if not for those “coercive” unions take the fight to our wise and natural betters such as Henry Ford?Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                Jesse,

                Your model of prosperity — like Blaise’s — is mystical. You assume there is wealth and then concern yourself with how it is divided. The key to the wellbeing of humanity is in the creation of prosperity.

                Government edicts for higher wages and longer vacations don’t create wealth. They may even destroy it.  Absent threat of violence there is no reason a consumer will (or should) pay for a service which they can get cheaper. There is no reason a prospective employee won’t (or shouldn’t) accept the job with less wages and vacation. There is no reason a competing firm won’t enter the market.

                You have some warped economic view where there is a battle between labor and management. Didn’t this die with all the confused old Marxists? Labor and management have a positive sum, voluntary, cooperative arrangement where they work together to solve problems for customers. Workers do compete, it is with fellow workers for the best jobs. Just as firms compete for workers (they compete for the ability to cooperate with employees).

                Mandated wages and benefits just lead to fewer jobs and higher prices for consumers. For all of us. It just leads to lower productivity and a lower standard of living. (I am fine with long vacations, but a worker should not be forced — violently — to accept vacation over wages).

                My system does not accept the “employer as God.”   Workers are free to go to any employer or to be self employed.

                I agree the government had a role in our prosperity. Primarily related to the rule of law. And no, Jesse, prosperity does not come from the government deeming higher wages. Wages aren’t wealth.

                Can’t you see this?

                 Report

              • Avatar James Hanley in reply to Roger
                Ignored
                says:

                Yes, we have a higher standard of living than 1800. Large portions of that are due the evil government.

                And larger portions aren’t.  Our standard of living is primarily driven by technological process, and that’s largely a function of market forces–engineers/inventors who have a neat-o idea and entrepreneurial folks who turn the ideas into realities available for purchase.  Decent wages as mandated by government aren’t even the main issue; they’re a sideline.  Businesses can’t flourish without customers, so they have to work their prices down t where customers can actually afford things, regardless of the wages. Mandating higher wages doesn’t necessarily make things more affordable because it can also affect a) prices (which may have to increase to cover the cost), b) total hours worked (wage increase coupled with hours decrease so company can keep costs controlled may leave worker with no more income, although with more leisure time for the same amount of income) and c) employment (minimum wage increases sometimes lead to the least productive employee being let go).

                It’s always worthwhile when thinking about policy (of any sort, not just economic) to remember that humans are reactive, not obedient.  For any policy that constrains people’s choices, people will look for ways to minimize the effects of that policy.  That doesn’t mean all policies are bad; it just means that no policy can properly be understood if we look only at its goals, and fail to consider the incentives it creates.Report

              • Avatar Kim in reply to Roger
                Ignored
                says:

                James,

                our life expectancy is determined primarily by sanitation, and that was primarily a government enterprise, via rural electrification. Rural electrification, I might add, which still costs our government a TON of money (and is one of the main reasons why living in a city is more cost effective).

                What INVENTION, pray tell, got rid of Sad Irons?

                Weren’t no invention, it’s a trick question (as if you couldn’t tell!). Edison had electric lights for fifty years, and Appalachia would still be dark without brave folks like that cussed Texan LBJ.Report

              • Avatar James Hanley in reply to Roger
                Ignored
                says:

                our life expectancy is determined primarily by sanitation, and that was primarily a government enterprise, via rural electrification. 

                Wrong.  Sanitation is first and foremost about educating people about sanitation (see the book Getting Better).  Electricity is advantageous, but not necessary and not sufficient.  (I do wilderness canoe camping; no electricity, but I keep things pretty sanitary.)

                Life expectancy is also about preventing infant mortality and medical treatment for minor injuries so they don’t turn septic.  It’s primarily the private sector that has figured those things out, although government funding for research has helped a lot, too.

                Appalachia would still be dark without brave folks like that cussed Texan LBJ.

                A) You don’t know that; you just assume that.

                B) If it is true, then it means it’s not cost-effective to run electricity in Appalachia and we shouldn’t be doing it.  Let people either suffer sad iron burns or move to where t’ lictricity is.  (By the way, I have actually used a sad iron…once…just to see. But  I prefer wrinkles to using an electric iron, so I’ve never been tempted to repeat the experience.)Report

              • Avatar Roger in reply to Roger
                Ignored
                says:

                James,

                It’s primarily the private sector that has figured those things out, although government funding for research has helped a lot, too.

                Terence Kealey argues persuasively in Sex, Science and Profits that the net effect of government research is to crowd out private research. There are also some online links.

                Terence Kealey: “Science is a Private Good: Why Government …Report

    • Avatar Roger in reply to wardsmith
      Ignored
      says:

      Wardsmith,

      Agreed. If the levee doesn’t break the public is going to take it up the keester. If it does, the rent seeking parasites (who are all good folks btw) are going to take it up the keester.

      Exploitation always ends badly for someone.Report

    • Avatar James Hanley in reply to wardsmith
      Ignored
      says:

      “General Motors wasn’t bankrupt /except/ when you considered their pension and health contractual obligations.”

      This translates to, “GM wasn’t bankrupt except that their expenditures were greater than their revenue.”

      Well, yeah.  That’s how bankruptcy normally happens.Report

  17. Avatar Jesse Ewiak
    Ignored
    says:

    I think a few things are lost here.

    For one, the government isn’t a for-profit organization. Yes, government should be effecient, but effenciency isn’t just about returning profit to shareholders (or taxpayers for that matter). I don’t know how anyone else is intending to use it, but it would certainly make sense to worry about maximizing efficiency in terms of delivering public services to, you know, maximize the benefit thereof. For example, I think a good benefit we’ve had as a nation are treating citizen-employees, even those on the lower end of the scale, well with such things as a decent pay and good benefits. After all, a stable workforce usually means better services, then that’s efficiency.

    That’s not even getting into the fact that federal civilian employment has been dropping for nearly two decades and federal employee pay can’t drop that much lower (http://www.opm.gov/oca/11tables/pdf/gs.pdf) Some government workers are on the verge of being eligible for Medicaid and Food Stamps if their pay goes much lower. That’s both bad PR and bad for the economy, such people having who work for the government getting paid so little they have to go to the government to have food on their table is kind of islly.

    I mean, that’s what basically part of the CBO statement was saying. ‘Sure, we could pay minimum wage and give no benefits, but there’s be a whole lot of damage, both quantifiable and non-quantifiable.’ Which is sort of the whole rationale behind having a civil service. You don’t want people job-hopping back ‘n’ forth between government and  the private sector, especially when it comes to things such as securing a license or permit.

    The fact the private sector has all but eliminated similar enticements doesn’t mean you “dumb down” benefits for civil servants. Of course the federal government is highly unionized (even though I’d note that federal public sector unions are banned from negotiating over wages and benefits) so ancient concepts like defined benefits retirement and comprehensive medical still exist. You know the sorts of things that CEOs think that only CEOs should get these days. Damn workers thinking they should get to retire and get to go to the doctor when they get sick. They don’t have this problem at Wal-Mart.

     Report

    • Avatar Roger in reply to Jesse Ewiak
      Ignored
      says:

      Jesse,

      Yes, the problem is to optimize the value of services rendered.  Optimal public (consumer) benefit at minimal cost.  And I could give you lots of ideas on further reducing federal and local government size. Just ask.

      Wanting to pay them well is great. I also want them to live forever and look like supermodels. I do not think it is fair to force the public to pay these salaries if they could get better service for less. Those Walmart employees are the ones being commanded to pay these exploitive wages and benefits. UNFAIR!

      I do not have to buy a companies products if I do not like their prices or CEO’s salary. I have no exit privilege with government service monopolies.Report

      • Avatar James Hanley in reply to Roger
        Ignored
        says:

        Jesse wrote:  delivering public services to, you know, maximize the benefit thereof.

        Roger wrote: optimize the value of services rendered

        I just want to emphasize the distinction between those.  If we insert the word “net” before “benefit” in Jesse’s statement, then these statements become equivalent.  I’m not sure if Jesse was implying maximization of net benefit or maximization of total benefit, so I won’t guess or judge.

        The difficulty, of course, is calculating net benefit when items are individually priced, and when we’re aggregating unpriced costs and benefits.  It is unfortunately much too easy to assume that obviously these public services have a net benefit.  It is also unfortunately much to easy to assume that obviously these public services have a net cost. Report

      • Avatar Stillwater in reply to Roger
        Ignored
        says:

        Those Walmart employees are the ones being commanded to pay these exploitive wages and benefits. UNFAIR!

        Roger this is incoherent, on a bunch of levels. One, it’s not only the poor who are ‘commanded’ to pay the wages and benefits of government employees – it’s all US citizens. But if the poorest US citizens earn income below a certain threshold, they not only pay no tax whatsoever (hence, they aren’t disproportionately negatively effected by government employee compensation packages) but they receive other benefits from government revenues. So the poor Walmart employee you’re pretending to be the champion of here doesn’t need your help. Really, it’s the rich people that need a champion (as they always do it seems), since they do bear a disproportionate share of the burden. (But for some reason, I think you’re actually acutely aware of that fact. 🙂

        Two, the claim that this is UNFAIR is empty, since fairness isn’t an absolute but a relative concept: just because poor folks may have to bear some the burden of government employee wages doesn’t make the situation unfair. It’s only unfair if they’re bearing more of the burden than others, or more of the burden than they ought to be bearing relative to an agreed upon metric. It’s this second claim that drives your argument here (and elsewhere), since you think that any compensation for government employees is unjustified. Why? Not because you think necessarily think that government workers are overpaid, but because by your lights there is no mechnism to determine ‘fair’ compensation. So by definition (according to your view of things) any compensation is by default ‘unfair’.

        I have no exit privilege with government service monopolies.

        This claim is true for any and all government service provisions funded by tax revenues, be they courts, cops, the military, education, road construction, etc and whatever. The only way to have an exit privilege is to have an entry privilege, and that’s precisely what government provided public goods are designed to exclude: the ‘privilege’ to refrain from financially providing for a public good.

         Report

        • Avatar Kim in reply to Stillwater
          Ignored
          says:

          … the hell? Can’t you just move?

          I get free garbage collection (it makes the city money). Most folks in da burbs pay for someone who isn’t the city to do it for them, on their own dime.

          Seems like there is some way out of it, after all, ain’t there?

          If yinz really wants to get out from govmint, you ought to start putting electricty ONTO the grid, and getting paid for your trouble. THEN, you ought to get easements to avoid driving on public roads.

          Do I need to go on, or have I amply illustrated how much of a stuck, mud-addled pig you’re being?Report

        • Avatar Roger in reply to Stillwater
          Ignored
          says:

          Good morning Stillwater

          I know it is not just the poor that pay government service wages. Jesse brought them up as representative victims of evil private enterprise. I continued his example by showing they are also victims of the rent seeking efforts of government service employees.

          The poor pay all kinds of taxes (aren’t most government employee taxes buried in sales and property taxes and fees?) and pay higher prices for goods marked up due to taxes. I am not sure if they pay more or less than their fair share of the government service related taxes (I suspect they pay more) but that is not the fairness that I was arguing. Nor was I arguing whether they get more or less benefit from government. Again I suspect they get less than their share, but that was not my argument either.

          If you see my argument as a champion for the rich, then you completely misunderstand it. I am a champion for fair play and widespread prosperity. The poor are the major beneficiaries of economic progress and always have been. 300 years ago they starved to death (30 years ago in China). If Jesse and Blaise and you get the world you crave, I fear they will starve again.

          Let me be crystal clear what I meant by UNFAIR. It is unfair that a privileged class use threat of violence to force rent-seeking wages upon others. It is unfair that a politically connected class gets to force those unprivileged to pay above market rates. This is classic exploitation. This is unfair. Does that clarify things?

          Let me quote Adam Smith:

          “To hurt in any degree the interest of any one order of citizens, for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment which the sovereign owes to all the different orders of his subjects.”

          I agree with Mr Smith. But you go on to say:

          since you think that any compensation for government employees is unjustified. Why? Not because you think necessarily think that government workers are overpaid, but because by your lights there is no mechnism to determine ‘fair’ compensation. So by definition (according to your view of things) any compensation is by default ‘unfair’.

          Well, not exactly. I can envision all kinds of ways to help to ensure fair wages for government service workers. Competing agencies.  Taxpayer directed taxes. Outsourcing contracts or hiring to private industry. Perhaps even political solutions. However when they make more, have higher job security, lower workloads and amazing benefits compared to their private counterparts, I suspect some serious exploitation. This is shall I say it…UNFAIR.

          Now Blaise and Jesse would just counter this with the prosperity fairy. They believe that they can generate prosperity by government decree — higher wages and longer vacations and supermodel wives for all! I know you and Mark are above such nonsense, but I’m just saying.

          Final point… if this was just confined to the narrow area of public goods, the problem would be pretty small. Most privileged government workers are not providing public goods. And as indicated above, I believe we can introduce all kinds of constructive competition into public goods to allow us to make these areas more effective, efficient and fair.


          Report

  18. Avatar Jaybird
    Ignored
    says:

    Hey Jesse, down here.

    Let’s back up a bit. Surely we agree that “I think that Person P is entitled to X!” is nowhere near a good enough measurement of whether or not Person P is entitled to X, right? Doubly so when the “I” in the sentence is “Person P”, correct?

    This is something that we’ve run across in discussions of how much medical care you’re entitled to (from what I recall, you said that there was *NO* limit to the amount of medical care you deserve, correct?) and now we’re discussing what you’re entitled to from an employer that you work for… and, unsurprisingly, you are entitled to a great deal.

    Is that accurate so far?Report

    • Avatar Jesse Ewiak in reply to Jaybird
      Ignored
      says:

      Since I includes all Americans, yes. But, even if I found a hot Aussie or Korean girl who loved me and I became a citizen over there, I’d still think my former citizens over in America should receive mandated vacation time.Report

      • Avatar Jaybird in reply to Jesse Ewiak
        Ignored
        says:

        Have you started a business yet? Imagine how many people you could be giving vacation to RIGHT NOW!Report

        • Avatar Jesse Ewiak in reply to Jaybird
          Ignored
          says:

          I know I can also send money to the Treasury Department if I feel undertaxed, but I prefer collective solutions to collective problems.Report

        • Avatar BlaiseP in reply to Jaybird
          Ignored
          says:

          Heh.   Ever worked without a vacation for a few years?  Lots of overtime?   There’s a diminishing law of returns on that sort of behaviour.   It’s awfully hard to get your money’s worth out of someone if you don’t give them breaks.

          Me, I don’t like hiring hard workers.   I want to hire smart workers, guys so goddamn lazy they’ll write a whole toolkit just to avoid ever having to solve the same problem twice and they’ll write another whole toolkit so they can automatically test the stuff they’re writing.Report

          • Avatar Will Truman in reply to BlaiseP
            Ignored
            says:

            A few jobs back, a coworker and I put together a toolkit that would seriously speed things along and make our job easier. The response was that now that the job was made easier, incoming people should be paid less*. That was after we narrowly avoided getting in trouble for doing extracurricular things during business hours.

            (For those who don’t get it: paying incoming people less is a good way to not get the kind of people that will put together toolkits that substantially increase productivity.)

            * – The next hire was a thesis away from a master’s degree in computer sci, taught programming classes at the local college, and had done a couple of impressive internships. She was offered less than $10/hr.Report

          • Avatar Jaybird in reply to BlaiseP
            Ignored
            says:

            I have, actually. My first job was 12 bucks an hour at a place that gave out one week of vacation a year. The interviewer explained to me that most people elected to keep working through that week and merely take an extra paycheck. I would be eligible for this vacation after one year of working for the company. I worked 11 months and my contract expired. Dang!

            My next job had a less fly-by-night attitude toward vacation… one week a year and I was eligible for it after a mere six months of working. (And, they pointed out, six holidays a year!!! Which I would be expected to work but I’d be making overtime on those days.)

            If I demanded the benefits that I can ask for today back when I was 24, unmarried, and fresh out of college, I would have been undercut by some kid who was 24, unmarried, and fresh out of college… and he’d have a job on his resume where I’d only have restaurant work and a humanities degree and a demand for more pay, more holidays, and more vacation.Report

  19. Avatar smarx
    Ignored
    says:

    Two observations from the CBO report:

    1. It’s interesting to note that over half of the federal workforce is comprised of defense-related workers – those in the military and those who process military benefits (ie, the VA).  Most enlisted soldiers get into a service after high school.  And, according to some of the charts those who work for the government and have no college degree make more than if they were working in the private sector.

    I have no comment on this other than the fact that we shouldn’t compare all federal workers with no college education like the often maligned DMV worker.

    2. The study doesn’t get into the details of specific functions of federal workers within agencies and bureaus. If the study were to be used as a tool for cutting the size of the government, you can’t compare postal workers or the guy who sits behind the front desk at a federal building to federal prosecutors or foreign service staff.  Some positions require specialized knowledge.  You don’t want the person working to convict a terrorist to be making minimum wage, and you don’t want the person representing the US in a foreign country to get the wool pulled over their eyes by a foreign official.  And, you don’t want them to take their specialized knowledge and turn around and work for the defense or a foreign government.

    …This is a bit jumbled and compressed, but the amount I want to say would fill a couple theses and I don’t have the time to write it all out.Report

    • Avatar wardsmith in reply to smarx
      Ignored
      says:

      Smarx, some folks in the gov’t make substantially MORE than their GS grade would presume. Case in point, IRS agents. They effectively make a “commission” on taxpayers who they can get to cough up dough for real (and imagined) infractions. My wife does volunteer accounting for old folks who are having problems with their taxes. An old widow came in, seriously panicked and shows her a letter she’d received from some junior agent at the IRS.The letter basically said she owed tens of thousands of dollars with multiple 10K’s additional in fees and interest and she had something like 2 weeks to send the check in or all would break loose. She was ready to sell her jewelry, the house, the car and cash in her CD’s early (incurring hefty tax penalties in the process) to do as commanded.

      Besides all the legalese and threats of imprisonment and worse there was minimal information about what precisely she’d (actually her dead husband) done wrong. With tremendous skill and the kind of assiduous attention to detail that I’ve only ever seen in Asians, my wife eventually reconstructed all the intervening tax years, redid all the calculations and with incredibly more effort was able to track down the agent who’d sent the letter in the first place to try to resolve things. A few more back-and-forths and eventually it got kicked upstairs. An embarrassed IRS sent a rather massive refund check to the widow including interest.

      They never apologized nor would they ever explain how they’d been so ridiculously wrong in the first place. A retired IRS agent and current CPA told us that when he was there, these stories were commonplace. Agents could collect as much as 50% of whatever the government received, it was “found money”. Whether their “claims” were legitimate was never part of the equation, nor were there any repercussions for falsely accusing a taxpayer of malfeasance. He said he was astonished at how many would pay what they were told to pay without asking a single question. It was why he got fed up, quit and became a CPA, to help civilians.Report

      • Avatar Jesse Ewiak in reply to wardsmith
        Ignored
        says:

        OK, I have to call bullshit there’s any real number of IRS agents effectively defrauding people out there.Report

          • Avatar Jesse Ewiak in reply to wardsmith
            Ignored
            says:

            Yes, the IRS gives payments to people if they point out tax cheats. This is not scary, unless you are indeed a tax cheat. Considering there’s still 400 billion out there in taxable income that hasn’t been collected, I’m not surprised the IRS has tried new methods.

            Oh, and it looks like they haven’t paid any out any rewards for three straight years. So, this scary overbearing program isn’t exactly leading to rogue IRS agents giving little old ladies false tax papers yet.

            Does the IRS screw up? Of course it does. But, there’s zero evidence out there that there’s any structural problems that have led to any big-time fraud by IRS agents taking “commissions” like you’ve attempted to claim.Report

            • Avatar wardsmith in reply to Jesse Ewiak
              Ignored
              says:

              Jesse, the IRS isn’t NOT receiving tips, the IRS is NOT sharing the wealth. Re-read your own link my friend. I could have done a better link to what goes on /inside/ the IRS but that takes some serious digging. Instead I’m going to go finish an excellent bottle of Kiona with my wife and call it a night for blogging. She’s reading something now so I had a 20 minute hiatus or so, but my time is up. Perhaps we can revisit this tomorrow, but I suspect if you do your own digging that you’ll find your unquestioning loyalty to the IRS is misplaced.Report

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