If you've been following our Government Workforce postings, you may asking yourself why and how state and local government benefits (pensions, health insurance, etc.) got so high?
In 2012, the average private sector job in the United States paid $9,855 in benefits while the average state and local government worker received benefits worth $21,192--that is a whopping 115 percent higher than the private sector worker.
Of course, where you live matters as well. If you live in Nevada, that state and local government benefits are 235.4 percent greater, but in West Virginia they are only 25.9 percent greater.
Ultimately, the problem is political. Government workers are the only workers in the unique position of electing their own bosses, i.e., legislators. This fact is not lost on the unions that represent these government workers.
Of course, economists James Buchanan, Gordon Tullock, and others from the Public Choice School of Economics have long argued that this type of situation is ripe for abuse. In essence, control who gets elected and then reap the rewards.
Increases in government benefits, such as pensions and retiree health insurance, are particularly attractive to politicians because legislated increases are paid in out-years. Politicians reap the benefits of keeping the unions happy today, while taxpayers foot the bill in the future.
We recently came across an excellent video that puts all of this into a very nice presentation. It is derived from a book of the same name: Government Unions and the Bankrupting of America by Daniel DiSalvo
You may want to have some tissue handy as you watch this . . .
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.