The USA Today study on Govt. and Private income makes some unfair comparisons and conflates benefits with income in an argument to bring them down to private sector levels. Why aren't we looking how overpriced some of these benefits are, how they're contributing to bankruptcies (healthcare), a broken retirement system that benefits the wealthy, the loss of US class mobility and the growing US wealth gap?
There is a popular USA Today study looking at how Federal workers earn double to private sector counterparts. There's problems with this "apples to oranges comparison" as federal employees are paid an average of 26% less than non-federal workers doing comparable work, public sector jobs have a more limited salary range, and other comparisons were incorrect (CBS).
More importantly, the USA Today article looks at 'benefits,' wraps it up into the comparison, and demands that this be brought inline to the public sector - without acknowledging the massive problems in these 'benefits' in the private workforce in work, health care, and retirement.
Despite profits, US corporations won't hire American workers, and compensation is barely growing. Over the long term, US productivity has risen far beyond wages, and CEO pay and profits have far outstripped worker pay.
In fact, since 1975, practically all the gains in household income have gone to the top 20% of households., the income gap is growing, and the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973. (interactive graph). Taxation is even a problem. Currently, there is another debate raging to allow the Bush tax cuts pass in another Friedmanesque trickle down argument. Warren Buffet chimes in by criticizing the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.
There are countless discussions on the high cost of US health care. it is eye opening to see these costs compared worldwide. Part of the USA Today discussion uses some of these costs as 'benefits,' conflates it as overall income, and argues to have it brought inline with the private sector - without repairing the colossal costs problems. This is a huge issue as half of all personal bankruptcies are the result of medical bills.. Worse yet, those bankruptcy laws helped drive foreclosures as homeowners defaulted on mortgages. As Dr Warren says, few people are connecting the dots that link family economic health, bankruptcy, consumer debt and mortgages..
There is another massive problem overlooked by the USA Today study as it ignores the disparity in retirement. Recall recall the systemic issues the auto industry had with retirement. Its currently harder to retire as well. The guy who invented the 401k noted problems with his system (that was intended to supplement traditional retirement) of imbalanced percentage payouts from a wealth metric and overall decreased employer contributions
Yes. ... So we decided to look at the top 20 percent and the bottom 20 percent. ... We saw the same thing over and over. ... Say the bottom 20 percent had an investment return for the year of 4 percent. The top 20 percent would be anywhere between five and seven times that number. ...
Like 30 percent?
Yeah, 30 percent right. ... I label[ed] this yield disparity. I just coined the term. I thought, we have a yield disparity that is a financial cancer in our great, beautiful 401(k) movement. I had never seen it before, but it was everywhere I looked.
What do you mean, a financial cancer?
It would destroy the opportunity for ordinary workers to retire in dignity. They couldn't get there from here. There is no way. Number one, they are contributing too little, too late for the most part. They are contributing the least, and then they are getting lousy investment performance
...
You're saying that the Department of Labor has numbers that [show that] back in 1974, companies were footing the bill for 89 percent, ... and 25 years later they're putting in 49 percent. So companies have saved 40 percent of their costs nationwide?
There has been a cost shifting of 40 percent from contributions made by the employer to contributions made by the employee.
The USA Today study on Govt. and Private income makes some unfair comparisons and conflates benefits with income in an argument to bring them down to private sector levels. Why aren't we looking how overpriced some of these benefits are, how they're contributing to bankruptcies (healthcare), a broken retirement system that benefits the wealthy, the loss of US class mobility and the growing US wealth gap?