Civil Service Pay

Given the current state of the US economy, most employees in the private sector, excepting most investment bankers, consider themselves lucky if they still have their jobs. Pay increases and bonuses are rare, freezes are common, and outright cuts - sometimes just (just?) unpaid furloughs - are more frequent than anyone cares to think about.

The USA's financial situation is serious - really serious. On September 30, 2010, at the end of FY 2010, the Federal Government will have spent more than it has taken in during all but six of the past fifty three years. The exceptions are 1960, 1969 and, under the stewardship of [the wicked] President Bill Clinton, pushed by a Republican Congress, 1998 - 2001.

Unfortunately, neither the President nor the Congress appears to be taking the situation seriously.

Compare this to both Ireland and, under extreme pressure from Germany and many other members of the Euro zone, even Greece. Their governments have dared to cut entitlements including old age pensions, other normally sacrosanct government spending and, most significantly, Civil Service pay. There have been strikes but these governments appear willing to resist.

The British are in the midst of an election campaign so nothing will happen until after election day. No one, however, doubts that tax increases and swingeing cuts in public spending - including civil service pay - will take place after the new government takes office.

What is happening here? The answer is not much and, in the Federal Government, the most heavily unionized sector of the economy, the idea of cutting pay is considered laughable. Even when, for lack of an Appropriations Bill during the Clinton years, the government was shut down, no one lost a dime of pay even though no work was done.

We could, more or less, afford such an indulgence then but no more. Now, the idea that civil servants (servants?) should enjoy an annual cost of living increase plus scheduled step increases every two or three years, plus so-called performance bonuses (for refraining, perhaps, from catching what used to be called a 'social disease'?) is laughable.

So if, as in other countries, Federal employee pay were to be cut and if civil servants were to engage in an illegal strike, the actions of President Ronald Reagan in 1981, faced with a strike by air traffic controllers, are instructive. The President simply said: "you have forty eight hours to return to work. If you do not, your resignation has been accepted."

There is an old joke that goes like this:

Two businessmen were walking past a large government office building. One turned to the other and said: "I wonder how many people work in that building?"

The second looked at the building and responded: "about half."

The world would hardly come to an end if half of all Federal employees were no longer preying on taxpayers' wallets.