Читать книгу Obama and America's Public Sector Plague - Edmund J. McMahon - Страница 5

“STIMULATING ” WHAT?

By the time private employment finally began a sluggish recovery in early 2010, state and local government employment was finally dropping. Under the circumstances, with tax revenues down and the end of supposedly temporary stimulus funding in sight, this was a predictable development. Nonetheless, it set off alarm bells in the White House. The president warned that “if additional action is not taken, hundreds of thousands of additional [government] jobs could be lost.” His solution: Send another ^$50 billion to state and local governments. In the face of mounting public concern over federal deficit spending, even some congressional Democrats balked at rubber-stamping that request.

Raising the specter of “hundreds of thousands fewer teachers in our classrooms, firefighters on call and police officers on the beat,” Obama’s rhetoric implied that the nation’s schools, firehouses, and police stations were on the verge of being staffed by skeleton crews. The numbers tell a different story. State and local government employment hit an all-time high of 19.8 million jobs in the summer of 2008, eight months after the official start of the recession. By June 2010, after falling about 240,000 jobs from that peak level, the state and local government sector still employed nearly 1.7 million more Americans than it had at the same point in 2000 - a gain of 9 percent during a decade when private employment decreased by a net 3 percent. Even as tax revenues were falling between the end of 2007 and 2009, total state and local government compensation rose by almost 6 percent - half again as fast as private sector compensation and twice the inflation rate.

The White House push for more temporary aid to states was fueled by breathless accounts of large budget gaps and cutbacks in state government employment. One of the national media’s favorite sources on the subject, the Stateline.org Web site run by The Pew Center on the States, reported in the spring of 2010 that 26 states had laid off employees, 22 used furloughs to reduce pay, and 12 cut salaries outright during their 2009-10 fiscal years. Stateline’s summary: “The result of all the broad-based budget cutting, now in its third consecutive year, is that state governments are shrinking.”

In fact, even after those reductions, state governments employed some 22,000 more non-education workers in June 2010 than in June 2000, and nearly 200,000 more than in 1990. The state workforce “shrinkage” has been comparatively small and short-term; from a broader perspective, state payrolls are about as large as they have ever been - even excluding their burgeoning higher-education systems, which have added a quarter-million employees in the past decade. Local employment, too, jumped sharply during the decade. This increase can’t be uniformly attributed to growing population or demand for services. New York State’s public schools, for example, added 14,746 teachers and 8,655 non-teaching professionals to their staffs between 2000-01 and 2008-09, when their enrollment was dropping by more than 121,280 pupils.

The 2009 stimulus bill included temporary increases in federal Medicaid reimbursements to states, more federal aid to school districts enrolling high percentages of poor children, and a large “state fiscal stabilization fund” designed mainly to supplement state aid to K-12 public schools. These different aid categories were ultimately fiscal pretexts, though. Money is fungible, of course, and the ultimate effect was to put a floor under falling revenues for state governments and school districts. The main beneficiaries were public employees, whose salaries and benefits equate to more than 80 percent of state and local tax receipts.

Despite the president’s rhetoric, federal stimulus aid to states wasn’t contingent on saving government jobs - most of which are being “lost” through natural attrition and nonreplacement of employees, rather than outright layoffs. The stimulus also has served the unspoken purpose of financing continued wage increases for many public sector workers who, as we have seen, already earn higher average compensation than the taxpayers who are footing the bill.

Within six months of the stimulus bill’s passage, tens of billions of dollars in temporary federal aid began flowing to states and school districts throughout the country, regardless of whether they had shown or planned any wage restraint. Most didn’t. Total state and local wages rose by ^$15 billion in 2009 alone, despite the recession, according to the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages. While the average private sector wage was dropping along with employment on a national basis in 2009, the average annual wage for state government employees was up in 45 states, including fiscal basket cases such as Illinois, Michigan, New York, and New Jersey, according to the Bureau of Labor Statistics. The average local government wage rose at least slightly in every state, even crisis-wracked California. The stimulus helped make all of this possible.

This result ran counter to the advice of the pro-stimulus economists at the International Monetary Fund (IMF), among others. “Public sector wage increases should be avoided as they are not well targeted, difficult to reverse, and similar to [income] transfers in their effectiveness,” the IMF staff wrote in a December 2008 report.