Monday, February 16, 2009

Government Employees Aren’t Sacred Cows

A headline on the front page of today’s USA Today says ”Benefits neglected for civil retirees.” It goes on to say that “State and local governments have set aside virtually no money to pay $1 trillion or more in medical benefits for retired civil servants, a USA TODAY survey found. With bills coming due as Baby Boomers start to retire, states, cities, school districts and other governments may be forced to raise taxes, cut benefits or both — a task made especially difficult in an economic downturn.”

This should not be a surprise. With the economy facing the hardest times it has in years, a person would be naive if they didn’t think it would only affect the “private” sector. I entered the workforce in 1973, when there was a mild recession going on, and I was lucky to get a job. I was also lucky that same company sold products that were viewed as being somewhat recession-proof. In fact, the company managed to do very well in that economic downturn, and many downturns to follow. Our “retirement” plan was called profit sharing, where the company would annually throw a pittance to the employees who were vested in the progam, to be held in an account that could not be touched until they retired. (This eventually turned int0 our 401-k program, where the employee was responsible for his or her own contributions to their retirement program.)

I also worked at that same company during the years where companies tried to maximize their profits, so any time there was any “softness” in the economy, jobs were cut in order to make the profit goals. We took the approach that there were no “sacred cows” and that in order to make the business as lean and mean as possible, there wasn’t any one job, person, product, or function that didn’t deserve scrutiny. It seemed year after year, while many public and privately held companies continued to get leaner and leaner by job and compensation cuts, that out city, state, and Federal government agencies got fatter and fatter and their benefits more out of touch with most non-government companie.

Now, during this severe recession, there is no safe place for anyone to hide. With the taxpayer footing the bill for a much needed bank bailout and a stimulus package, it can’t be expected that the taxpayers will have unlimited deep pockets. Something has to give. While auto workers – current and retired – are going to have to take a hit in their jobs, pensions, and medical benefits to get government relief, the government should also take a look at itself and see if its own compensation practices are out of line with the norm. Personally, I think the autoworker’s pensions and benefits are very rich, and I also think the governments are just as rich. I no more want to use my hard earned and dutifully paid tax dollars to go to bloated union pensions as much as I want them to go to bloated government agencies and their pensions and benefits.

So while I can certainly feel sorry for anyone who is suffering job loss or loss of income as part of this economic downturn, I don’t think our government agencies should be immune from also facing the same challenges and associated cost reductions that currenly face non-government entities. This may be the perfect time for our government agencies to cut out the bloat and save the taxpayers some money. I voted for Barack Obama because I wanted change, and getting rid of waste in the Federal government expenses could be the first place to start. There are no sacred cows.



Check out my blog home page for the latest information, here.



A headline on the front page of today’s USA Today says ”Benefits neglected for civil retirees.” It goes on to say that “State and local governments have set aside virtually no money to pay $1 trillion or more in medical benefits for retired civil servants, a USA TODAY survey found. With bills coming due as Baby Boomers start to retire, states, cities, school districts and other governments may be forced to raise taxes, cut benefits or both — a task made especially difficult in an economic downturn.”

This should not be a surprise. With the economy facing the hardest times it has in years, a person would be naive if they didn’t think it would only affect the “private” sector. I entered the workforce in 1973, when there was a mild recession going on, and I was lucky to get a job. I was also lucky that same company sold products that were viewed as being somewhat recession-proof. In fact, the company managed to do very well in that economic downturn, and many downturns to follow. Our “retirement” was profit sharing, where the company would annual throw a pittance to the employees who were vested, held in an account that could not be touched until they retired. (This eventually turned int0 our 401-k program, where the employee was responsible for his or her own contributions to their retirement program.)

I also worked at that same company during those same years where companies tried to maximize their profits, so any time there was any “softness” in the economy, jobs were cut in order to make the profit goals. We took the approach that there were no “sacred cows” and that in order to make the business as lean and mean as possible, there wasn’t any one job, person, product, or function that didn’t deserve scrutiny. (I was lucky to survive many cutbacks and was there 28 years until I decided I’d had enough of the cut-cut-cut mentality and one incompetent boss. But I digress.) It seemed year after year, while many public and privately held companies continued to get leaner and leaner by job and compensation cuts, that out city, state, and Federal government agencies got fatter and fatter.

Now, during this severe recession, there is no safe place for anyone to hide. With the taxpayer footing the bill for a much needed bank bailout and a stimulus package, it can’t be expected that the taxpayers will have unlimited deep pockets. Something has to give. While auto workers – current and retired – are going to have to take a hit in their jobs, pensions, and medical benefits to get government relief, the government should also take a look at itself and see if its own compensation practices are out of line with the norm. Personally, I think the autoworker’s pensions and benefits are very rich, and I also think the governments are just as rich. I no more want to use my hard earned and dutifully paid tax dollars to go to bloated union pensions as much as I want them to go to bloated government agencies.

So while I can certainly feel sorry for anyone who is suffering job loss or loss of income as part of this economic downturn, I don’t think our government agencies should be immune from also facing the same challenges and associated cost reductions. This may be the perfect time for our government agencies to cut out the bloat and save the taxpayers some money. I voted for Barack Obama because I wanted change, and getting rid of waste in the Federal government expenses could be the first place to start. There are no sacred cows.



Check out my blog home page for the latest information,
here.

1 comment:

samfan said...

I totally agree.