Labor aristocrats on the public payroll

The average employee of New York City earns $106,743, including the cost of fringe benefits. Thanks to unionization and politicians who appreciate the power of public employees as a voting bloc, wages of government workers are far outstripping those of private sector employees in many locations. The New York Post chronicles the findings of a report by a Citizens Budget Commission in New York City.

Average pay per employee topped $69,100 (including salary, overtime and other pay differentials), while average fringe-benefit costs were about $37,600. More than half the cost of fringe benefits, about $20,000, was for pension contributions, and more than $8,000 was for health insurance.

And in the last eight years, the city's average employee compensation cost grew by nearly two-thirds. Since fiscal year 2000, salaries have grown at an average rate of 3.6 percent a year, compared to an inflation rate in the metro region of 3.2 percent.

But the real problem is the fringe benefits - whose growth is astonishing. In eight years, the city's average contribution for pension benefits grew 704 percent - from $2,530 per full-time employee to $20,333. Health-insurance costs doubled while other nonpension fringe-benefit costs rose almost 50 percent.

It is a fair prediction that many state and local governments will be seeking federal bailouts in the face of their inability to sustain budgets through the recession. New York City and California, which also has extremely high wage and benefit costs, will be in the forefront, almost certainly. Keep in mind that average taxpayers who do not enjoy gold plated fringe benefits like a secure retirement and health insurance coverage, will be required to pay taxes to support those enjoying levels of security they can only dream of.

When private sector firms, even the richest and largest like General Motors, pay out these kinds of benefits, they get in trouble. Unless they are bailed out, they fail. The same logic applies to governments, except that they can also demand more from their customers to keep their employees secure in their health care and retirement.

Richard Baehr adds:

In December, when 540,000 jobs were lost, government jobs rose 7,000. In last 8 years, they rose 1.7 million.

Hat tip: Ed Lasky
The average employee of New York City earns $106,743, including the cost of fringe benefits. Thanks to unionization and politicians who appreciate the power of public employees as a voting bloc, wages of government workers are far outstripping those of private sector employees in many locations. The New York Post chronicles the findings of a report by a Citizens Budget Commission in New York City.

Average pay per employee topped $69,100 (including salary, overtime and other pay differentials), while average fringe-benefit costs were about $37,600. More than half the cost of fringe benefits, about $20,000, was for pension contributions, and more than $8,000 was for health insurance.

And in the last eight years, the city's average employee compensation cost grew by nearly two-thirds. Since fiscal year 2000, salaries have grown at an average rate of 3.6 percent a year, compared to an inflation rate in the metro region of 3.2 percent.

But the real problem is the fringe benefits - whose growth is astonishing. In eight years, the city's average contribution for pension benefits grew 704 percent - from $2,530 per full-time employee to $20,333. Health-insurance costs doubled while other nonpension fringe-benefit costs rose almost 50 percent.

It is a fair prediction that many state and local governments will be seeking federal bailouts in the face of their inability to sustain budgets through the recession. New York City and California, which also has extremely high wage and benefit costs, will be in the forefront, almost certainly. Keep in mind that average taxpayers who do not enjoy gold plated fringe benefits like a secure retirement and health insurance coverage, will be required to pay taxes to support those enjoying levels of security they can only dream of.

When private sector firms, even the richest and largest like General Motors, pay out these kinds of benefits, they get in trouble. Unless they are bailed out, they fail. The same logic applies to governments, except that they can also demand more from their customers to keep their employees secure in their health care and retirement.

Richard Baehr adds:

In December, when 540,000 jobs were lost, government jobs rose 7,000. In last 8 years, they rose 1.7 million.

Hat tip: Ed Lasky