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The Misleading War on Public Employees

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The chorus from the right after the Scott Walker victory is that the voters of Wisconsin taught public sector employees a lesson. Other states should follow the lead of Wisconsin and Scott Walker by taking the fight to overpaid public employees who have the excessive benefits that are ruining the American economy. I will start this piece by stating that some reform is necessary in regards to the health care, pension and other benefits some public employees receive. While this can be done on a case by case basis through collective bargaining, an all out attack to ban collective bargaining and roll back hard earned benefits is not the way to go.

First, it should be pointed out that public sector employees are not overpaid. They get paid in a narrow salary band that spans middle class income levels. It may be true that in some cases they make more than their private sector counterparts, this cannot be said of lawyers, people that are responsible for large loan portfolios, IT professionals or other mid-level, professional, and managerial positions. New York City is now seeing how the IT consultants they hired made many times more than the government employees they worked with that had similar skills and education. This is repeated often in government where public sector work is contracted out to private sector consultants. It is often written how employees leave public service for more lucrative private sector careers.

Most public employees believe in serving the public and choose a career that does not have all the benefits of the private sector to be able to do so. The job security they receive by being part of the civil service is a tradeoff for their financial sacrifice. Public sector unions protect the integrity of the civil service by ensuring that employees are safe from attacks due to political favoritism or the whims of capricious managers. In fact, during the boom years, most private sector workers looked down on government workers preferring to chase easy riches than have a reliable job that serves others. Pre-2008 how many times did you hear any pundit or author declare how good public sector workers have it?

The right wants you to believe the crisis now being faced in public finance is just due to the excessive pension benefits given to public employees. They forget the other part of the story. The change in investment strategy from safe government-backed securities to the risky business of private investing. This, of course, has led to hefty management fees for Wall Street. As detailed in the NY Times, the management fees paid by South Carolina have gone from $22 million to $344 million since 2005. In the boom years the returns were great and the percentage of pension funds investing in risky private investment vehicles soared along with them. Legislatures provided more generous pension plans since the money was rolling in. Once the bottom fell out of the market in 2008 the value of the investments plummeted resulting in the crisis we have now. The right completely ignores this side of the story as they are backed by many of the same interests that received those fees. If you want public employees to give back benefits how about asking the investment banks to return billions in management fees for their bad investments, you talk about not being accountable.

Speaking of these interests, you also have to look at who bankrolled Scott Walker. He outspent his opponent 7:1, raising over $40 million from the Koch Brothers and other corporate interests who want to maintain their hold on government. When people ask the wealthy to pay their fair share they are accused of inciting class warfare but by pitting middle and lower class public and private sector workers against each other, the moneyed interests are creating intraclass warfare in order to keep their positions at the top. It is a classic bait and switch operation where the workers battle against each other keeping their attention way from those manipulating them.

The anti-public employee forces like to call themselves reformers, however they are really concerned with maintaining the status quo as it has been for decades. People need to remember that it was financial trickery by the private sector that led to the 2008 recession and the loss of millions of jobs, not public employees. They need to stop pulling the wool over our eyes.

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