Wednesday, June 30, 2010

Whose is Bigger?

My conservative pal R at work came into my office the other morning to tell me there's a new website that lists New York State employees and how much they make. It was "unsettling" he said, to find out that some DPW guys he knows make $70k-plus. "No wonder the state's going broke," he said.

But R's well-paid friends are not the problem. Slow growth is the problem.

Question: What does slow growth mean? It means slow growth in the private sector. That's the problem. That's what bothers people. Nobody thinks it is "growth" when it's the public sector that's expanding. "Growth" means growth in the private sector.

The problem is slow growth in the private sector. That means guys like my buddy R and me don't get the sort of pay raises we'd get in a better economy. We fall behind.

By contrast, public-sector workers are riding a wave that has slowed less. But that isn't excessive growth. It's normal. Less than normal. It only looks excessive because the private sector is so far behind. And I think we're starting to get jealous.

Private-sector workers are starting to blame public-sector workers for the widening gap. This is dangerous. Troubling, and personal, and dangerous. My buddy R seems to think a problem can be solved by cutting the pay of public-sector workers. But that only solves the jealousy problem. It doesn't solve the growth problem.

In simplest terms, the problem is a shrinking private sector. People see that private sector growth is lousy and public sector growth is less bad. They somehow conclude from this, that the public sector is growing too fast.

Lousy growth is the problem. But making sure that everybody has lousy growth is not a good solution.

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