Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
US Majors Flush Out A Major Pivot Low and What’s Next - 18th Jun 18
Cocoa Commodities Trading Analysis - 18th Jun 18
Stock Market Consolidating in an Uptrend - 18th Jun 18
Russell Has Gone Up 7 Weeks in a Row. EXTREMELY Bullish for Stocks - 18th Jun 18
What Happens Next to Stocks when Tech Massively Outperforms Utilities and Consumer Staples - 18th Jun 18
The Trillion Dollar Market You’ve Never Heard Of - 18th Jun 18
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18
More on that Gold and Silver Ratio 'Deviant Conundrum' - 13th Jun 18
Silver Shares? Nobody Cares - 13th Jun 18
What Happens to Stocks, Forex, Commodities, and Bonds When the Fed Hikes Rates - 13th Jun 18
Gold and Silver Price Setting Up for A Sleeper Breakout - 13th Jun 18
Tesla Stock Analysis - 12th Jun 18
What Happens Next to Stocks when Russell Goes up 6 Weeks in a Row - 12th Jun 18
Gold vs. Stocks: Ratios Do Not Imply Correlation - 12th Jun 18
Silver’s Not-so-subtle Outperformance - 12th Jun 18
Why You Should Brace Yourself for Big Financial Changes - 11th Jun 18
Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts - 11th Jun 18
Stock Market Topping Pattern or Just Consolidation? - 11th Jun 18
Study: What Happens Next to Stocks When the Put/Call Ratio is Very Low - 11th Jun 18
G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - 11th Jun 18
SPX Unshackled - 11th Jun 18
When Trump Met Fibonacci And Won - 11th Jun 18
FREE Theme Park Entry with Cadbury's Choc's! Legoland, Alton Towers, Chessington.... - 11th Jun 18
Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - 10th Jun 18
End of the World Stock Market Chart! - 10th Jun 18
All US Homes Are Overvalued - 10th Jun 18
Thorpe Theme Park London Car Park Exit Nightmare - Drivers Beware! - 10th Jun 18
Gold Price Summer Doldrums - 9th Jun 18
How to Prepare for Economic Uncertainty with Gold and Silver - 9th Jun 18
5 "Tells" that the Stock Markets Are About to Reverse - 9th Jun 18
Billionaire Schools Teacher in NAFTA Trade Talks - 9th Jun 18
Land Rover Discovery Sport ECO Mode Real World Driving MPG Fuel Economy - 9th Jun 18
Crude Oil Bullish Weekly Reversal vs. Bearish Monthly Reversal - 8th Jun 18
Fed’s Interest Rate Hike is Short term Bearish for Stocks - 8th Jun 18
The Deviant Conundrum Called Silver - 8th Jun 18
Pleasure Island Theme Park Cleethorpes, Last Day Trip Before it Closed Down - 8th Jun 18
America’s One-sided Domestic Financial War - 8th Jun 18
Debt Consolidation Advice: When and Why to Consolidate - 8th Jun 18
Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - 8th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Pay Differential Between Private Sector and Government Workers

Politics / Government Spending Dec 12, 2012 - 04:01 AM GMT

By: BATR

Politics

A dreadful warning arises, when public sector employment pay and benefits outstrips the remuneration earned by the private employment workers. Even the most hardened government proponent, must succumb to the reality that private business generates real wealth that finances government through taxes. The expenditures of government on all levels are linked to the profitability of enterprises and sufficient margin that affords the ability to pay revenue levies. Thus, the proportion of wages between private enterprises and public employees has significant consequences.


Consider the coverage of that bastion of mainstream reporting CBS News when making a comparison in Does the Government Pay More than the Private Sector?

"Bureau of Labor Statistics data shows that federal employees in occupations that exist in both the public and private sectors made an average salary of $67,691 in 2008, USA Today reports. Meanwhile, private sector workers in those occupations made $60,046. Government data also shows federal workers received benefits valued at $40,785, compared with benefits valued at $9,882 for private sector workers."

Now on the surface this assessment is very plausible. Common sense, after the financial collapse in 2008, with the dramatic rise in private sector unemployment and reduced wages, federal employees are sitting pretty. Before the alarm bell sounds, deliberate over the assessments from friendly government sources.

The Congressional Research Center study on Comparing Compensation for Federal and Private-Sector Workers, has some interesting conclusions.

 

"Federal workers with less than a bachelor’s degree have on average a wage premium compared to private sector counterparts, while federal workers with post-graduate educational attainment experience a wage penalty relative to private sector counterparts.

As with wage differentials, the CBO study finds a declining benefit premium as educational attainment rises. That is, the benefit premium declines from 72% for federal workers with a high school degree or less to 2% for federal workers with a professional degree or doctorate. The CBO study finds an average benefit differential of 48% for federal workers compared to private sector workers."

The list of Pay Scales at TSA provides a departure from Federal employees because the TSA does not use the standard GS grading system. The TSA uses an "SV" grading system, which is a system of discrete grades with pay ranges that differ from GS pay ranges. Civil Service work rules and pay scales have long rejected any direct relationship with productive results. However, in the conflicted thinking of Washington speak the President extends federal pay freeze. Note that a reduction in wages and benefits is an unknown thought, even in a collapsing economy.

"The freeze will stay in effect until a spending plan is passed, but the presidential election makes it unlikely that will happen before the start of fiscal 2013 on Oct. 1. As a result, the president is required by the end of August to come up with an "alternative pay plan" to avoid a legal trigger that would automatically raise federal pay in line with private-sector salaries.

In a letter to House and Senate leaders, the president reiterated his support for ending the pay freeze with a 0.5 percent raise, to take effect Jan. 1, 2013, that he proposed early this year.

"Civilian federal employees have already made significant sacrifices as a result of a two-year pay freeze," Obama wrote. "As our country continues to recover from serious economic conditions affecting the general welfare, however, we must maintain efforts to keep our nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share."

OK, we have all heard enough of that "fair share" mantra. Now the banner carriers of Big Government raise their ugly heads and reveal their real motives in The truth about federal salary numbers.

"The Federal Salary Council, an advisory body of academics and leaders of public employee unions, suggested last month that federal workers are underpaid by an average of 35 percent relative to nonfederal employees. The council’s data come from the "President’s Pay Agent," the bureaucratic entity that conducts the federal government’s annual pay comparison.

If these figures are to be believed, federal employees are paid only 65 cents for every dollar received by nonfederal employees doing the same work. Put another way, the average federal employee who shifts to a job outside government would increase his salary by 54 percent."

Weak private sector employment persists. Wages are stagnant or regressive. New jobs are sporadic, at best. Prospects of a prosperous recovery are slim. Government dependency seems like the only growth occupation. No bureaucratic study or public union advocacy changes the facts that the private enterprises are fighting a rear guard effort to subsist.

With the election of President Obama to a second term, the reigns of restraint on public agencies and expenditures are non-existent. Democratic Leader Nancy Pelosi says ‘No Time To Waste’ On National Debt is a factual appraisal of the attitude that drives the disparity between employment in enterprises that have to earn their way to profits and public agencies that are protected from the harsh consequences of a balanced budget. "We look forward to hearing from voices across the private sector as we work together to reach a balanced agreement," said Pelosi.

The relationship equilibrium between the private and public spheres is out of line. More government spending never generates a genuine economic recovery. Making matters worse, the prospects of a rise in government salaries only exasperates the problem. The need for a true dramatic across the board reduction in federal agency budgets is the proper response. Private businesses understand the need to scale back in a depressed economy in order to survive. In spite of this certainty, the federal government operates as if their ranks are the new and only economy.

In an age of disappearing private pensions and job security, why allow "public servants" to dominate the job market because of odious taxpayer subsidies. The current pay differential between the free market and the federal bureaucrat guarantees a marginal economy at best.

James Hall – December 12, 2012

Source : http://www.batr.org/negotium/121212.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2012 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules