Two weeks ago I suggested that climbing out of our financial sinkhole
requires us to fundamentally downsize our expectations of what we can
milk from government ("Champagne taste with a beer budget").
Dienne posted a complaint: "I'm sorry, Mr. Byrne, perhaps I missed it,
but I didn't see a solution in this column -- was there one? If we're all
supposed to 'downsize our xpectations' of the state government, which
specific expectations are you willing to downsize?"
question. Let's start with all the stuff that showers down on me as a
senior citizen. End free transit rides. Make seniors pay full fare,
except for those who can show a need. Let's get rid of all senior perks
that aren't means tested; you don't "earn" them just by the fact of
While I'm at it, we might as well include in this cleansing the many boons provided by Washington. Medicare and Social Security: Their financial underpinnings will surely collapse without some sacrifice by their beneficiaries. And, please Mr. Obama, don't even think of adding to their costs by filling the "doughnut hole" in prescription coverage or handing out another $250 one-time payment to Social Security recipients.
I have no idea how much federal, state and local benefits for seniors cost taxpayers in total; no doubt, it's a lot. Even so, sacrifices by seniors alone will not reduce our public debt, which like the Blob in the immortal horror film, is expanding to consume everything, especially programs such as Medicaid, that the poor need most. Much more needs to be accomplished, particularly with the biggest single problem: public employee compensation.
The cost of public employee pensions is eating us alive. Just about every responsible suggestion for addressing Illinois' budget calamity starts with calming the pension storm. At least go to a two-tiered system in which benefits for existing retirees are preserved, but benefits for new employees are made more reasonable.
But it's not just the pensions; Public employees generally are paid more than the people who pay them -- the taxpayers. From the federal Bureau of Labor Statistics, "Employer Costs for Employee Compensation, December 2009": Total compensation costs for private employees was $27.42 hourly, but for state and local employees, $39.60 -- 44 percent higher. State and local employees did better than their private-sector counterparts in wages and salaries, total benefits, paid leave, insurance, retirement and savings and legally required benefits, according to the report.
From the BLS' "Employee Benefits in the United States, March 2009":
Medical care benefits were available to 88 percent of state and local government workers, but only to 71 percent of private industry workers. About half of private industry workers participated in a plan, compared with 73 percent of state and local government workers.
Among full-time state and local government workers, 99 percent had access to retirement and medical care benefits. Of full-time workers in private industry, only 76 percent had access to retirement benefits and 86 percent to medical care.
Employers' share of medical coverage for singles was 90 percent for state and local workers, but 80 percent for private-sector workers.
Nearly 90 percent of state and local government workers had access to paid sick leave, compared with 60 percent of private industry workers.
The bureau issues certain cautions about comparing the two sectors. But the point is clear: The idea that public employees generally are paid less in wages and benefits than private-sector employees is mostly a myth. But some public employee unions don't get the point that all of us need to sacrifice. They're willing to throw their own less senior members overboard to preserve not just their existing wage and benefit levels, but to increase them.
I'm spotlighting public-sector labor costs because that's where most of the resistance to a solution arises. There are only a few ways out of the state's mess: cuts in services and personnel costs, increased borrowing and higher taxes. The state of Illinois has sunk so low I frankly don't know that doing all of them simultaneously would solve the problem in our lifetimes.
So, where to start? I go back to my original premise: All of us need to lower our expectations. There's no more blood left in this corpse.
This column also appeared in the Chicago Tribune.
budget, budget cuts, Bureau of Labor Statistics, debt, deficit, doughnut hole, employee compensation, federal, free fares, Illinois, medicare, private sector employees, public employees, senior benefits, social security