Cutting the Federal Beast Down to Size

by Bill O'Connell on December 9, 2010

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In the recent election campaign, lacking anything positive to say about their record, when Democrats were not making personal attacks on their opponents one of their diversions was to taunt their opponent by saying, “Oh yeah, what specifically would you cut from the federal government, and don’t say waste and fraud.”

 

Ah, yes, what to cut?  While pondering that the other day, I came across an article in the New York Times titled, “For Federal Employees, a Feeling of Being Targets in the Budget Wars.” In reading the article, I came up with the perfect formula on how to prepare the list of possible cuts. 

Identify every federal employee that makes more than the median income and if they also belong to a union, put them on the list.  Have everyone on the list write a one page description of how their contribution exceeds in value what they are being paid.  Sort the list in order of credibility, and start cutting.  Stop when you have balanced the budget.

Incoming!

I can detect the missiles being fired in my direction, so let me state my case.  The aforementioned article begins with the story of Iyauta Moore, a woman with a master’s degree in public administration from American University and who makes over $100,000.  In 2008, $113,799 put you in the 90th percentile of income earners in the United States. To put it another way, you made more than 9 out of 10 Americans.  The clincher was the statement that Ms. Moore was a member of the American Federation of Government Employees.  What the hell does a person making six figures need a union for?  Perhaps we need to revisit how unions came about in this country.

Unions

As the economy transformed from agrarian to industrial, the factories needed many workers to do relatively simple jobs.  These were mostly unskilled or semi-skilled jobs where an individual could be easily replaced with next to no cost to the factory owner.  If the owner didn’t like a worker for any reason, he could fire him on the spot, walk to the gate of the factory and pick another man out of the crowd, escort him to his place on the assembly line and say something like, “You stand here. You take two of these nuts out of this bin. You put the two nuts on those two bolts as the assembly travels by.  You then take this wrench and tighten the two bolts. Repeat. Any questions?”  Total elapsed time, maybe fifteen minutes.  Cost of the interruption to production? Pennies.  Thus the factory owner had all the power and the worker had none.  The worker lived in constant fear of losing his job and never getting a raise.  Unions solved this problem.

Individually, a worker’s value was trivial to the factory owner.  As a group, all of the workers had enormous value to the factory owner.  The union was the glue that bound the individual workers into a large economic force.  Now back to our story.

It’s About Value

Where was I? Oh, yes, what the hell does a person making six figures need a union for?  Does she not provide value as an individual?  Is not her education something worth compensating her for?  Would it be difficult or costly to go through the process of replacing her? If the answer to any of these questions is yes, why does she have to tie her fortune to others for her economic well being?  Perhaps this tells the story.

“She bristles at the notion that she is just another overpaid, underworked, cosseted bureaucrat. What I do here involves creating something that doesn’t exist,” she said of her job at the Department of Education, where she is establishing a group to help oversee all of the department’s grants, “That’s not pushing paper.”

“We’re out and we’re making a difference in the community. And I don’t really think you can put a dollar figure on that.”

Uh, Ms. Moore, you just did put a dollar figure on that and it’s zero.  If you can’t put a dollar figure on it, it has no value.  The job is spending government money in an agency that shouldn’t exist in the first place.  Providing for education is nowhere in the Constitution.  That is a function of local government not the federal government.  Since its inception the Department of Education has spent over one trillion dollars and we all know how much it has improved education in the United States and our standing in the world.  Ms. Moore cannot seem to describe what she does that is worth her six figure salary. “creating something that doesn’t exist…help oversee  the department’s grants…making a difference in the community.”  Creating what?  What is the purpose of the grants that you oversee?  What is the difference you are making in the community?  Shut it down.

Extortion

“I think federal employees are definitely getting a bad rap and definitely become political punching bags,” said William R. Dougan, the president of the National Federation of Federal Employees.  Wow, that’s surprising he would say that, don’t you think? The main problem with public sector unions is the relationship between unions and politicians.  Unions work furiously to help elect politicians and then the politicians negotiate the labor contracts with the unions and hand the bill to the taxpayers.  It is extortion.  Public sector unions should be prohibited from any political activity as a conflict of interest.

The next case is of Mathew Kolodzie a Department of Defense firefighter.  I think very highly of firefighters and I also think it takes a lot to train them, making them highly skilled in what they do.  If so, why do they need to be cogs in a union machine?

If Mathew is a good firefighter, Mathew has value and he should be paid accordingly.  If he is underpaid, he can threaten to leave to find a higher paying job elsewhere.  The Department of Defense would then be faced with the decision of finding another qualified candidate and going through the expense of training them and if the replacement is not satisfied with the pay, risk losing them and repeating the cycle.  That’s how it works in the free market in the private sector.  An employer knows it costs about five times as much to hire a new employee than to keep an existing one.  So the employer has to weigh his expenses against paying his people enough to keep them from leaving. 

If on the other hand, there isn’t a higher paying job for Mathew elsewhere, and there is a waiting list of people to take Mathew’s place because they think the pay is just swell, then he is probably paid appropriately.  The only reason, then for joining a union is to extort more compensation and benefits than the free market would provide.  Now, if that is a bargain that a private company and a private union want to engage in, have at it.  But public employees are paid by taxpayers and the more the public employees are paid the more the citizens are taxed to pay for it.  It’s a pretty tough sell to tell someone struggling to make ends meet that their taxes have to be raised to pay some government employee six figures.

The Times article tries to make Mr. Dougan a sympathetic figure because his schedule calls for him working two days on and three days off and that requires him to work a minimum of 144 hours over a two week period.  Wow!  That’s a 72 hour work week minimum!  That is, of course, until to look more closely.  Like many professional firefighters, they “live” at the firehouse while on duty so they are with the equipment and can respond to a fire twenty-four hours per day.  If there is no rash of fires raging, then they have time to sleep each day so subtract 48 hours from that two week figure (six nights at eight hours per night), now that 72 hour week is down to 48 hours.  Subtract time for meals and breaks and you have a forty hour workweek, like most everyone else.

I Could Do Better Elsewhere

Then we have the case of Carl Houtman a research chemical engineer for the Forest Service, he too make around $100,000 per year.  He says his job is like a university professor, but a typical professor makes around $150,000 and in private industry he could double his salary.  So, why don’t you Carl?  I think I have a solution for you.  Whatever it is that Carl does for the Forest Service, why don’t we contract that out?  Carl could get that private industry salary he talks about, and we would pay for the services provided and not get stuck paying Carl a rich government pension for the rest of his life.  Everybody wins.  If we find out we really don’t need to continue with what Carl is doing, we can let the contract lapse when it comes up for renewal.

Pay for Performance

The article says that some lament that there are fewer performance incentives in government.  You don’t say!  “Once you’re past your probationary year, there’s basically no reward for performance.”  Isn’t that the definition of a union?  Unions don’t like high performers, they make the rest of the union look bad.  They want middle of the road plodders.  They hold back those who have drive and ambition and protect those who are marginal.  Just ask Lance Hamann.

Lance is a purchasing agent for the Department of Agriculture (why do we need a Department of Agriculture with less than 3% of the workforce working in agriculture?).  He makes a bit more than $40,000 but he is also the president of Local 1840 of the federal employees’ federation.  “To me, there’s a rhyme and reason to all the red tape the government does have, “ he said, “so I try my best to be patient with the red tape, knowing it’s just how the government runs.” I couldn’t have said it better myself, Lance.  Axe, please.

That’s my opinion; I’d like to know yours.  Please share your comments below.

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