The American political system appears incapable of an honest conversation about the “Great Recession” of the past few years.
While economic losses are estimated in the trillions, our elected officials like to pretend these dollars mysteriously evaporated. The truth is, of course, that this hoard is merely hidden, sluiced into Wall Street bonuses and offshore shelters long before the financial crash. It wasn’t our financial institutions that were too large to fail, rather it was the systematic skimming operation they conduct, which siphoned 40 percent of all corporate profits out of the American economy, that has proven too powerful a criminal enterprise to prosecute. With our elections staged as public auctions, we shouldn’t be surprised when politicians rush to protect the interests of their winning bidders ahead of constituents.
For three decades free market evangelists have proselytized the gospel that funneling an ever-larger portion of national income to a handful of super wealthy “economic innovators” will reliably deliver prosperity for all. The fact that income disparity is accelerating despite their exertions seems not to have shaken their faith. What we should learn from the ‘largest economic downturn since the Great Depression’ is that, when we permit Wall Street thugs to rake off an unearned percentage of national income, the resulting economic damage cascades through the economy. It is pain, not prosperity, which seems to trickle down to the kitchen table.
In the face of a spreading tide of poverty and need, public budgets have been slashed as tax revenues shrink. In search of a political scapegoat, Colorado Republicans have identified government employees as the selfish, greedy culprits at the root of the state’s fiscal troubles. House Speaker Frank McNulty alleges that, “Government workers have fared much better than their counterparts in the private sector.” Yep, it’s those snowplow drivers, wildlife officers and state troopers who have created the budgetary mess Colorado faces. Before we examine the truth of his claim, it is useful to step back and consider the appropriate structure for public worker compensation. Corporate managers contend their primary fiduciary responsibility is to their shareholders — that it would be unethical for them to place the interests of their employees or the communities where they do business ahead of earnings.
Taxpayers are the ultimate proprietors of the enterprise that is democratic government. If we apply the shareholder ethic to public spending, should we then attempt to provide every public service as cheaply as possible ahead of all other considerations? There certainly would be money to be saved. Lets take an example and dig a little deeper. Would you entrust school bus service for your children or grandchildren to a low cost provider? Undoubtedly, a private operator willing to purchase used vehicles, willing to cut back on scheduled maintenance, willing to skip background checks on driving records and sexual predator registries could save our school districts a lot of money — tax dollars which could then be redirected to the classroom. Or, are you inclined to selfishly demand assurances of mechanical safety and professionally trained drivers?
There also is the question of what kind of an employer taxpayers would prefer to be? Should a State Patrol Officer earn enough to send his or her children to college, or is that unimportant? Colorado law sets forth a goal requiring a compensation package for state employees comparable to what they would receive in the private sector for similar work. That sounds reasonable and there is even a survey process called for in the law designed to keep state salaries current with the Colorado marketplace. Unfortunately, for more than a decade survey recommendations have never been fully funded. During seven of the past ten years employee compensation has been frozen entirely. As a result of escalating health care premiums and the recent transfer of 25 percent of the state’s pension contributions to employees, together with a failure to award service increases, paychecks have actually been shrinking each year.
A State Patrol Officer hired in 2001 at a salary of $46,000 may be making $47,000 today, but his or her paycheck is actually smaller than it was then, eaten away by health care premiums and pension transfers. The Officer hired tomorrow at that same $46,000 starting salary would receive pretty much the same money as a veteran with a decade of experience. In addition, Colorado only provides about 80 percent of the support for health care costs as is offered by private employers. Worse yet, compensation auditors have repeatedly observed that the state health plan is sub-standard in terms of the benefits it offers. In short, employees receive lousy help towards a lousy plan. Perhaps as many as 30 percent of state workers are going ‘bare’ and simply taking their chances on medical expenses. Critics like to point out that state salary ranges remain close to private sector ranges for many positions. What they ignore is the compression of state salaries at the bottom of these ranges for every employee hired in the 21st century.
What has apparently become a permanent refusal to fund in-grade raises is generating a myriad of problems that erode the quality of the state work force. Turnover is at an all time high as employees use their state experience as a stepping stone into the private sector where individual effort is still rewarded. For those who have chosen to remain, the state will eventually have to move them through their pay ranges to the salaries they have earned. This is an unfunded liability that grows each year. Estimated at $90 million six years ago, it probably approaches $250 million today. In a system that fails to reward outstanding performance, the individual appraisal process has all but vanished. Managers rarely bother to even go through the motions. What would be the point? Even the lucky few who are offered promotions are frequently denied an increase in pay when they assume additional responsibilities. Is this a place you would want to work? Once the Colorado economy recovers, I would advise you not to stand in the doorway of a state office building!
The absence of predictable salary progression has undermined morale throughout state government. It is worth noting that, nonetheless, many public employees routinely work in risky or nasty jobs that most of us would hesitate to accept. Particularly dangerous are the road maintenance jobs at the Colorado Department of Transportation. A few years ago a CDOT worker was burned to death in a collision with a runaway truck. Because he had not worked long enough to establish tenure his widow did not receive a pension. The state’s cash settlement barely covered his funeral expenses. His co-workers voluntarily helped finish the home he was building. I, for one, am willing to pay enough more in taxes to provide support for his family and even send his son on to college. After all, he died working for me.
In another case, a young man, hired directly out of college to work at a regional center for the profoundly disabled, was offered no training before his assignment to manage violent clients with severe behavioral deficits. In an effort to prevent one of those clients from injuring himself, this employee briefly pinned the patient to the floor. To provide some perspective, the resident was using a pencil to engage in ‘rectal digging.’ The worker’s supervisor filed a police report charging him with assaulting an at risk adult. (And you wonder why an employee might want a union?) Earning the princely sum of $28,000 in salary, this young man was forced to spend thousands defending himself against the negligence of his superiors. Needless to say, he wasn’t interested in returning to his job.
Then there is the claim that state workers enjoy wildly generous pensions. When Colorado opted out of Social Security more than 70 years ago, it accepted responsibility for funding an equivalent retirement program for its state workers. The average PERA retiree today receives about $2,200 each month. Nearly 80 percent of these benefits are generated from the earnings produced from retirement plan contributions made by state employees. Yes, a few receive much more, but they are all employees who will never receive a bonus, or stock options or profit sharing. There are no compensation windfalls in public employment. In exchange for a career devoted to public service, state workers are promised a modest and dignified retirement. Civil servants spend their lives teaching our children and protecting our communities. In exchange, is it asking too much for us to guarantee these retirements?
It strikes me as a fair bargain. I also want the state of Colorado to behave as a model employer. To set an example, compensation should be sufficient to attract and retain our best and brightest kids to state jobs. Smart government starts with smart employees. As a taxpayer, I found it embarrassing when I discovered we have state workers eligible for food stamps. If the law didn’t prevent it, there are still others who would qualify for MEDICAID. If you work for me, I believe you deserve a quality healthcare plan, regular pay raises for satisfactory performance and a salary that provides a middle class lifestyle. I believe you should be able to pay your mortgage, take an occasional vacation and afford to save enough to pay your kids’ tuition at a state college. Anything less constitutes a failure of moral and political vision.
Miller Hudson was executive director of the Colorado Association of Public Employees (CAPE) until Governor Ritter launched a labor/management partnership with Colorado WINS.