Sunday's Herald & News’ feature article was titled, “How Much We Pay Our Public Employees”. The paper outlined several different public employees with salaries above $50,000, $100,000 and even $200,000. With the Klamath County unemployment rate hovering well above 10%, that report ought to make a few folks a little jealous if not angry.
That said, we applaud the paper’s investigation and reporting. These are public employees that get paid by us. We ought to know what they are making. Moreover, we ought to be able to control how much they make, but sadly often can't.
The Old Lemonade Stand
As children many of us made a lemonade stand to earn a little summer money. We'd find a box, make a sign, stake out a good place on the front lawn where passers by would notice us, and of course made the best pitcher of lemonade we could.
Let's say we're going to sell lemonade this summer for 50¢ a glass. Thinking ahead, we remember we have baseball practice at 1pm and need to hire our friend Suzie to fill in for the afternoon shift (our busiest time of day). Let's say Suzie costs us 25¢ per hour. Let's also suppose Suzie is part of L.W.U., Lemonade Workers United — a union which states we can't fire Suzie if she shows up on time and does a decent job. We also have to give her automatic raise increases of 5¢ per day. We can quickly see how having Suzie as an employee is going to get real expensive, real quick. We have two options: first we can try and increase the price of our lemonade to 75¢ and then to $1.00, but that is only going to work for a short while and is likely to drive away customers. The other option is to try and decrease costs elsewhere — we could dilute the lemonade, we could use less sugar or we could charge extra for anyone who doesn't bring their own cup/mug. Most likely though the end result of this scenario is that we will go out of business.
As we can see with our lemonade stand the biggest problem to staying solvent, let alone making some money for the summer (which was our goal) is employee costs. The issue isn't Suzie per se, but rather that her union contract was ambivilent to market conditions. It didn't matter if customer's wouldn't pay 75¢ a cup. It didn't matter if Mom started making us buy our own sugar and lemonade mix. It didn't matter if Johnny next door started his own lemonade stand and started charging 40¢ per glass. Nope, Suzie was going to be paid and get her scheduled raises no matter what kind of revenue we brought in.
The Issue is Not Just Employee Salaries
While the H&N did a good job of finding this year's and last year's public employee salaries, the real issue is the auto-increases in those salaries and benefits — no matter what. When a public employee union member is in the job another year, their wages and benefits increase — no matter what. While the County Commissioners have trimmed the county employee workforce by over 100 during this economic downturn, most if not all of those employees were non-union. Today the county's workforce is 80% unionized — and like Suzie very difficult to lay off or fire when economic conditions dictate cuts need to be made. Moreover, when a public employee retires, they get government pay and benefits until they die, often at 80-90% of their last three years on the job. So now to back-fill that person's position it costs the taxpayer 180-190%.
It's no wonder the county’s general fund, which brought in more money than it did five years ago, has a hard time funding jail space, police patrols, museums and other functions it used to be able to.
The only way to control this beast is to stop the auto-pay increases, reform the state retirement program for public employees (PERS) in order to make the government have to live in the real world like the rest of us do.