Mitch and Terry have commented on two ways governments grossly distorted the economy over the past ten years – through expanding employment and compensation. There has been no net job growth since the start of 2000 and the only growing sector has been “health, education, and government” as seen in the graph below. The education and government workers, in particular, have higher pay and better benefits than their counterparts in the private sector. Those workers are also far more likely to be union members.
The Future of Retirement Study Commission was created none too soon. We’ll be looking at retirement benefits as part of the total compensation package for teachers and government employees. I’ve looked briefly at this topic before.
Legislators and local governments should not be looking at ways to reform, read: raise, taxes until they first look at ways to reform spending, including personnel.
