Wednesday, January 19, 2011

Public sector workers are a ‘privileged new class,’ says billionaire

John Bellamy Foster
January 17, 2011

In the ideological assault being directed today at public sector workers no one has outdone Mortimer Zuckerman — billionaire real estate and publishing mogul, owner of the New York Daily News and chairman and editor-in-chief of U.S. News and World Report — who declared in September that public sector workers are a “privileged new class” dominating U.S. society.

Populists, Zuckerman (the 182nd wealthiest American in 2010) pronounced, have long gotten away with their insidious “class warfare speeches” emphasizing “the gulf between the rich and the poor.” The aim has been to divert attention from society’s real ruling class: public sector workers. Forget the corporate rich, forget Wall Street, forget the bank bailouts, corporate bonuses and high-income tax breaks, forget the private jets and mansions. It is the millions of “public servants” with their outrageous five-digit salaries and their galling health insurance and retirement pensions, Zuckerman insisted, who have now become “the public’s masters,” seizing a disproportionate share of society’s rewards and bringing on the failures of the U.S. economy.

Such views might be grimly amusing, if it weren’t for the fact that similar opinions are now widely disseminated in the corporate media and voiced daily by politicians. What we are witnessing is a concerted attack on government at all levels, extending to public sector workers and their unions. It is out of control government spending, we are told, that is at the root of all our economic woes. Public sector workers, it is claimed, enjoy higher salaries, greater job security, and more ample benefits than their private sector counterparts, while continually demanding and getting more. It is time that they shared in the crisis of the rest of the society.

It doesn’t seem to matter to those making such charges that all of this is false — as long as they have the power to spread such misinformation and people are sufficiently gullible.

But what about government spending? Isn’t it true that it is becoming a bigger and bigger burden on the overall economy? The answer is no. Total civilian government spending (which excludes transfer payments) as a percentage of U.S. GDP has been flat for almost four decades. In the first three quarters of 2010, civilian government spending (federal, state and local) as a percentage of GDP was 14.9 percent, well below the 15.5 percent peak that it reached in 1975 when Gerald Ford was president and in line with the annual average since that time, which has stayed within the 14 percent range. Moreover, this is the case despite the fact that a big government stimulus is now desperately needed to boost the economy in the face of weak investment and consumption. Although the Obama administration provided a small economic stimulus in response to the economic crisis, it did not appreciably increase the share of civilian government spending in GDP due to the drastic drop in state and local spending, which neutralized the overall effect of the federal stimulus.

But isn’t it the case that government workers enjoy higher salaries and benefits? Again the answer is no. A study of the compensation of state and local workers by Rutgers University professor Jeffrey Keefe in 2010 for the Economic Policy Institute (Debunking the Myth of the Overcompensated Public Employee) showed that private sector workers earned average annual wages of $55,132, more than 10 percent higher than the average for public sector workers ($49,072). When total compensation, including employer-provided benefits, was looked at, private sector workers still earned $2,000 per year more on average than public sector workers. When it came to those with higher levels of education, the penalty in total compensation experienced by public sector workers was far greater, with public sector workers with bachelor degrees earning 25 percent less than their private sector counterparts, those with professional degrees, 37 percent less, those with master’s degrees 31 percent less, and those with doctorates 21 percent less.

But what about employment? Don’t public sector workers enjoy secure employment? Isn’t high federal government spending, increasing civilian employment at the federal level, even while the rest of the economy is suffering high unemployment. Again, the answers are no and no. Hundreds of thousands of public sector workers are now unemployed, and their numbers are increasing rapidly. Government jobs are being slashed right and left particularly at the state and local levels, given the fiscal crises of state and local governments brought on by tax shortfalls during the economic crisis. Although allegations have been made that there is runaway employment growth at the federal level, reality is much more prosaic. As Paul Krugman explained in his blog post, “Federal Employment in 2008,” between January 2008 and January 2009 total federal employment outside the postal service rose by 82,000 workers nationally. But most of this was military related. Defense, veteran’s affairs and homeland security accounted for three-quarters of the total increase. This left an increase in non-military federal employment of about 20,000 workers for the entire country, about 400 new federal employees, per state — a miniscule number in a time of economic crisis when the federal government should be stimulating employment growth. To be sure, in late 2009 and early 2010, there was an upward blip in government employment due to the temporary hiring of census workers, to carry out the census established by the Constitution. But that disappeared as fast as it came.

What then are we to make of the ridiculous claims by Zuckerman and his whole class of billionaires and cento-millionaires (and their hangers-on), incessantly disseminated in the media, that public sector workers constitute a “privileged new class,” the “public’s masters”? This is nothing but the age-old strategy of divide and conquer adopted by ruling classes throughout history, particularly in times of crisis when their own position is most shaky. The answer is to turn worker against worker, under the mantra that “the people divided will always be defeated.” What the moneyed interests fear most is the united political struggle of the vast majority (private and public sector workers alike) in the interest of a more democratic, more egalitarian society — a world of common humanity. But is there any goal more worthy?

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