Saturday, March 21, 2009

Governor Jack Markell's hypocrisy, or the hidden trap in the idea of "shared sacrifice" during economic hard times

I really hate the term meme, but I like George Lakoff's intellectually dishonest framing even less, and what I'm about to tackle is shorter than a narrative. So I'll just go with idea.

We have been told by Governor Jack Markell that what he heard from wandering around the State for a series of unscientific listening sessions is that most State employees would rather take a pay cut than see some of their co-workers lose their jobs.

I seriously doubt that any of them thought he'd be proposing a combination of salary cuts, benefit reductions, and tax increases that would take more than 10% of their salaries in one fell swoop, but that's beside the point.

Here's why this idea is so pernicious:

1) It takes away from government any responsibility to function efficiently, by transposing the primary responsibility from delivering certain services cost-effectively to being a jobs program where the more people who are employed, the better. It relieves senior administration officials and managers from any requirement to make tough choices about what services and what personnel are actually necessary to do the job, and instead promotes the idea that their responsibility is not to the citizens of the State, but to the job security of their employees.

2) It's a lie--or at least it better be. What do I mean by that? Well, let's check it out. The Division of Historical and Cultural Affairs is being required to eliminate two museums. What happens to the employees who currently staff them? Are they somehow guaranteed other State jobs when their positions are eliminated, regardless of the hiring freeze? (Maybe they'll just be shifted to the two new museums/exhibits that the State is opening with Federal stimulus money?) Likewise, what does the flight crew and aircraft maintenance team for that Delaware State Police do while their plane is grounded? Do we continue to pay them to be on standby, or will they be assigned to other duties as supernumeraries? Will we be sending aircraft mechanics to work on police cruisers? You see, if Governor Markell is actually making significant cuts in services (as he claims), then it follows that he has to cut employees or else he has to allow massive featherbedding in State government. (I should say more featherbedding in State government, shouldn't I?)

3) It is ultimately economically disastrous to most State employees. First, some stats: the median pay for Delaware State and local government employees is $44,368, and for school district employees is $40,304. These figures are arguably way too high, as they include numerous individuals in both the government and the school districts who make six-figure salaries. (Example: if you have one employee who makes $120K, it would require twelve employees earning $30K to drop the overall average to $40K--and, yes, I know the difference between mean and median, but the example still holds.)

So, if at least half of our state and school district employees make in the $40-44K range, when you ask them about whether they'd rather take a pay cut or see somebody else lose their jobs, they're going to visualize other people at their own level when they think about the question. So if you have ten folks making $40K, they'll willingly agree to take the hit down to $36 K because it saves one job.

But the reality doesn't work that way. If you eliminate one unnecessary management position making $120K, then you have saved enough money to keep thirty employees at the $40K and below level from having to take a hit.

It gets worse. Depending on the family circumstances of those low-end workers, the State's 10+% pay cut will drive hundreds of people into the category of working poor, threatening their ability to pay their mortgages, feed their families, cover their health insurance premiums, and save for their children's education.

Here's why: Poverty in America does this really useful calculator based on the concept of living wage. I use it as descriptive, and suggest strongly that you visit the Delaware page as well as examine the site's overall methodology. If anything, I think the site under-estimates many of its costs.

They only cover New Castle County, but the example will suffice for the whole State.

Here's the gross income needed in NCC to pay your taxes and maintain a pretty frugal standard-of-living (when I say frugal, I mean it: PiA allows a maximum of $932/month for housing, which includes all expenses, not just rent or mortgage):

One adult: $20,563
One adult, one child: $38,647
Two adults: $30,817
Two adults, one child: $48,923
Two adults, two children: $63,180

Let's start with a single parent State employee making the State government median of $40K.

Oops. That 10+% pay cut just dropped those two folks to $36K, which means they are now $2,647 below the living wage and now officially among the working poor.

For a single mom with a child, where would you cut this monthly budget?

Food: $385 [That's $12.83/day for two people; you try it.]
Child care: $620
Medical: $93 (Oh, right: the State is raising the premium here)
Housing: $932 (Rent and utilities: can you afford cable?]
Transportation: $472 [Car payment, insurance, repairs, maintenance, and gas]
Other: $391 [Clothes? School supplies? Life insurance?]
Taxes: $2,840

Or let's try a working couple with one child, assuming that one is a custodial worker and the other is a mid-level secretary. The custodial worker makes somewhere in the $22-26K range, depending on experience, and the secretary (the range is a little broader here) makes $22-31K.

So we have an upper limit of $57k and a lower limit of $44K, with a living wage requirement of $48.9K.

Let's hope that they didn't have that kid before they built up some seniority, because at the bottom end they are already working poor as State employees even before Governor Jack takes 10+% of their salaries.

And if they are at the very top end, they are down from $57K to $51.3K, which not only brings them perilously close to the line, but also ignores the fact that Governor Jack wants to eliminate their State-share health-care benefit.

At the lowest-premium level coverage they can get from the state, this is going to cost them at least $2K to keep any family plan. Not only will they be struggling, but their health-care insurance will have been cut from the best the Stat offers to the worst the State offers.

So tell me again how this idea of shared sacrifice among people with wildely differing income levels works?

As a Libertarian I often argue that government should be smaller, and I discourage people from depending on government.

My point here is this: the bogus shared sacrifice idea being peddled by the pseudo-Progressive Jack Markell will (whether through stupidity or malfeasance--and I'd rather not go there because everybody knows Governor Jack is a pretty smart guy) drive hundreds and possibly thousands of the lowest-paid State employees into poverty in order to avoid making the tough choices about eliminating a few unnecessary highly paid bureaucrats.

In other words, folks, the government has duped you again: while Markell and Obama rode into office as progressive change agents who would make government work again for the little people at the expense of those unpatriotic rich, at least in the State of Delaware our Governor is asking the worst-paid State employees to take drastic pay cuts so that their managers, adminstrators, and department heads won't risk losing their country club memberships.

Once again: Government lives down to my expectations.

Footnote: in the Delaware political blogosphere, Dana Garrett gets it. Delaware Politics gets it. Nancy Willing has ignored the whole issue.

And over at DelawareLiberal?

Aside from this post, and this one, both of which are well off the front page--and neither of which applies the slighest bit of analysis to the proposed cuts--the whole issue might as well have ceased to exist for the blog that declares itself Ground Zero for all things political in the First State.

At least they've discovered that President Obama's budget plans are not quite what they expected.

Quoth jason:

Bottom Line: We are screwed. I can’t believe Obama has bought into this utter bullshit. Or..I suppose I can and that is the depressing part.

Quoth Shoe Throwing Instructor:

We are intent on paying our visa bill with cash advance checks from master card, I've done that myself and long term it just makes things worse.


Nancy Willing said...

Yikes, the math is quite clearly laid out here. Gross inequity.

I remember , I think, Jack disclaiming Minner's across-the-board budget cut recommendations because of the clumsy way that hurts sections of government supported programming that should be spared.

That and your analysis of his across-the-board salary/pension hit suggests that he must know this math and must know this consequences.

Nancy Willing said...

Two off-the-beaten-track lefty blogs worth a gander -


Hube said...

Steve: Excellent analysis as always.

I'm gonna be checking out part-time/summer jobs soon!

downwithabsolutes said...

You've locked it up again, Steve. I'm my normal confused, all-over-the-place self over at my site today.

Mark H said...

Sir, you've explained this better than I've ever heard anyone else do.


Anonymous said...

Sorry to post anon, but this one might bite me back unless I had plausible deniability.
As RAM was leaving, a vacant position in my agency, one that had been vacant for 1 1/2 years got filled by someone on Minner's staff. Let me reiterate. WE DID WITHOUT THIS POSITION FOR 1 1/2 YEARS. AND NOW WE FILL IT?
Luckily it is not a merit position, so it's possible that the position gets vacated anyhow.
But this is one of those 120k positions. I've been busting my butt getting by without getting needed equipment, but this person comes in and blows a 120k per year salary?
And you wonder why I'm annoyed at this 8% mess :)

Anonymous said...

If someone would investigate, one would find that in many state agencies, where there are mid-level and bottom positions not being filled, there have been new positions created at the top. When Gov. Minner left office, there were many appointed employees that retired from the state. There were also many, because of political connections, that were just moved from one high-paying position to another. One may also want to find out how much more money the new personnel is making than those that vacated their positions. Take the Department of Education for example. The new Secretary was making more money as the Superintendent at Christina School District. Did she take a pay cut to take this new position? What about the people she brought with her? How about people that left Public Health only to show up in other agencies making 6 digit salaries. Why is it that during a hiring freeze we can still find positions for the people at the top of the chain while the people doing the majority of the work are asked to work at poverty levels? There are state workers that qualify for food stamps--imagine the shape they will be in with a 10% cut.