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Taxing the Poor to Pay for the Rich

If you think you live in a free country, think again.  I love patriotic music, but we have not been the land of the free or the home of the brave for a long time.  Get this: the number of federal employees has increased by about 25,000 since December of 2008 while the number of private employees responsible for paying the federal salaries, benefits, and retirement has decreased by millions – 4 million since the new administration took office in January, 2009.  

Now there are 6 people looking for a job for every job opening, with 10% of the work force unemployed.  The number of job openings in manufacturing has decreased by 47.0%, and in professional and business services, by 21.1%.  But those cushy, well-paid federal government jobs just keep coming – like Old Man River, they just keep rolling along. 

Adding insult to injury, now we know that civilian federal government employees earn an average of $79,197 in salaries each year – the average employee.  The average private sector employee who is taxed to pay for those federal employees makes $49,935 annually.  So the private worker earns 63% of what the federal worker earns. Tax the poor to pay the rich.  If you include benefits, the situation is much worse.  Including wages and benefits, the AVERAGE civilian federal employee earns $119,982 a year; that’s how much it costs for the AVERAGE private employee earning
$59,909 a year to pay for the AVERAGE federal employee.  That’s just less than 50% of what a federal employee earns! 

In 1960, federal workers averaged $1.24 for every $1.00 earned by a private employee.  In 1980, it rose to $1.50; by 2000, $1.66, and now its $2.00 for every $1.00 earned by private employees.  The AVERAGE federal employee earns twice as much as the AVERAGE private employee

Government job security 

Then there is the issue of job security.  During the average year, 1 in 5,000 federal civilian workers is fired.  “Involuntary separations” are four times higher in the private sector.  Almost consistently across the various agencies of the federal government, the percentage of workers fired each year is 0.02%.  In the Labor department the rate is 0.04% while in the Departments of State and Transportation, the rate is 0.00% for the latest statistical year.  

In addition, federal employees file discrimination complaints at ten times the rate in the private sector.  Besides this, federal workers are protected by “whistleblower” protections, and frequently this exemption is used to protect an employee who really should be fired, and is not deserving of the protection. 

You will also be happy to know that there are 11,000 US Postal workers who are idle at any given time.  It is known as “standby time.”  Because of union negotiations, the Postal Service is required to pay an average of 45,000 hours of “standby time” every week which costs about $50 million a year. 

“Most of us bring books and puzzles.  Sometimes we just sleep,” said one employee on “standby time.”  Supervisors would like to use the time for these employees to brush up on training, but when they tried this, the union shop filed a grievance.  “We’re on standby time, not training time.  Standby time is different…You can’t make people read training materials on standby time.”  For this you pay an average of $119.982 a year for each of these employees.  After months of doing nothing, some supervisors have relented and begun to allow employees to break the rules by reading and playing cards. 

Cost of state and local government employees 

State and local government workers are paid an average of $25.30 per hour while the private sector averages $19.00.  This means that state and local workers are paid 33% more than private workers are paid on average.  Beside this, there is collusion all along the way with supervisors agreeing to raise pay during the last month of pay in order to justify a higher retirement benefit for the rest of the employee’s life, this is so common it is called “spiking.”  For example, recently a California fire chief announced his retirement (at age 51) and three days prior to his retirement, his salary was increased in order to boost his pension to $241,000 a year. 

Government pensions 

In addition, government workers are permitted to retire not only with guaranteed pensions but are able to retire much earlier than most people in the private sector.  We have all seen the 42 year old police officer retired with more than $2 million in benefits coming his way over the next 50 years of his retire life.  In addition, disability retirements are easily arranged for some workers like police and firefighters so they can quit working at early ages, and spend the rest of their life relaxing, playing golf, or getting another job with losing their disability pay.  Sometimes these “disabilities” actually don’t exist. 

These pensions are guaranteed by state law, and regardless of how the invested money fares, the taxpayers are required to pay them.  Even if a state would experience 25% or more in unemployment, the pensions of he retired state workers MUST be paid. 

At the federal level, there is a $trillion pension disaster looming.  When the stocks and other investment vehicles the retirement funds are placed in decline, the government must pick up the slack, and that means any amount of taxation that may be required.  You could be completely impoverished and still you are required to pay retirement benefits for federal, state, and local government workers.  Now that the U.S. government is a stakeholder in General Motors, we are also on the hook for all those union pensions.  

Health care benefits 

Non-military federal workers have access to a wide array of healthcare choices.  Through the FEHBP (Federal Employees Health Benefits Program) they have access to more than 200 private health insurance plans – fee for service, HMO’s, and PPO’s.  Sometimes the location of the federal worker limits the number of private insurers they have access to, but it is never less than a dozen.  These workers can change their choices in private healthcare insurance every year. 

Because they have many choices and they can change plans every year, the companies bidding to provide coverage for federal workers have to be very competitive. 

Besides, as taxpayers, we help pay the premiums for these workers as well.  We pay 70% of the cost for these federal workers’ private health insurance.  The companies providing coverage for these workers are not limited by not being required by various state governments to provide all kinds of mandated coverages, nor do they have to live with specific benefits requirements mandated by the federal government.  The approach of the government for federal workers is that they pay for the benefit; for Medicare, they mandate the coverages.  As a result of the choices federal workers have, and these other issues, the FEHBP costs grow much more slowly than other private health insurance coverage. 

We know that the Obama administration has no interest in making federal employees change to the new plan they have for the rest of us; and we know as that they have no interest in providing access to this kind of program for us either.  They are considering neither.  I wonder why Obama wants to continue blue ribbon coverage and lower cost for federal employees, but want to force the remainder of us into grade B coverage with government-controlled coverage. 

Separation bonuses 

Many times, school districts and other public entities have to pay unbelievable sums to get rid of incompetent leaders.  Case after case of school districts and municipalities paying a year or two of salary plus a lump sum along with other agreements to pay health insurance for life and the like are seen in newspapers everywhere.  This is the reward for incompetence. 

The poor support the rich 

While Democrats howl about the rich stealing from the poor, in fact the reverse is true.  The average American earns half of what federal workers earn, yet those who earn that half are taxed sufficiently to guarantee the pay, healthcare, and retirement of federal workers who have a guaranteed job with a 0.02% risk of being fired.