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Just Say No to Pay Increases for Government Workers

Gov. Mead’s budget prioritizes spending increases, and that’s bad news for taxpayers. One priority is the proposed increase in government worker salaries as a way to stem worker turnover. But hiking state salaries would mean an even greater increase to government worker pension plans, paid for primarily by taxpayers, many of whom may not even have a pension plan. This session the legislature has the opportunity to stem the spending tide and ensure taxpayers are treated like more than just a wallet for the governor’s spending spree, by rejecting the pay hike for government workers.    

The governor proposes to add $50 million to the salary budget of the bureaucrat-voting block. The governor justifies the hike by citing an increase in state employee turnover.

However, it turns out that the government sector turnover rate in Wyoming is miniscule compared to the private sector. In the first quarter of 2013 (Jul/Aug/Sept) turnover rate at the state and local level, excluding education and healthcare, amounted to 11.9 percent, up 0.5 percent from the first quarter 2012. Construction had a 36.5 percent turnover rate, professional business services a 30.7 percent turnover rate, and leisure and hospitality a 38.1 percent turnover rate.  The only area that comes close to the government sector’s low turnover rate is information technology, at 14.5 percent. In fact, the total state turnover rate in the first quarter of 2013 was 23.8 percent, about double the government sector turnover rate. 

Turnover rates newSource: http://doe.state.wy.us/lmi/trends/1013/turnover.htm

Is the low government sector turnover rate on the rise? The answer is yes, slightly since the recession. But the change is not much different from  turnover in the private sector.

In fact, turnover in the government sector is far lower now than it was before the last recession. Government turnover was as high as 13.8 percent in Q1 2006 when it started to fall, bottoming out in Q1 2010 at 10.5 percent. It has crept up since the height of the recession, however, so has average turnover for all sectors in Wyoming. In Q1 2006 average turnover was 30.6 percent and fell to 21.7 percent in Q1 2010, still twice as high as government sector turnover. Average turnover also started to go up in Q1 2012, to 25.4 percent in Q1 2012 but has since dropped back down to 23.8 percent. Government sector turnover has gone up since 2010, but is still lower than what it was in 2006.

Turnover rate compareSource: http://doe.state.wy.us/lmi/turnover.htm

An surge in government salaries will also increase the liability taxpayers must bear for the government sector pension plan. Taxpayers already contribute $7.70 for every dollar contributed by bureaucrats, and many taxpayers don’t even have a pension plan.

According to the Bureau of Labor Statistics, in the Mountain geographical area to which Wyoming belongs, only about 63 percent of private sector workers have access to any type of pension plan at all, while about 88 percent of government workers do.

The governor can hardly expect taxpayers to fund pay hikes and pension contributions for someone else. The governor and legislature must focus on spending and tax reductions to set the private economy on a sustainable growth path to prosperity

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Tuesday, 27 September 2016

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