The Ruling Class Takes Care of Its Own

It’s safe to say that the disconnect between the resourceful, wealth-producing private sector and the resource-draining, wealth-destroying public sector has never been greater. In his seminal, insightful essay at the American Spectator, Angelo M. Codevilla of the Claremont Institute characterizes the former as “the country class” and the latter as “the ruling class.”

To see that the ruling class currently has the upper hand, one need look no further than an August 10 USA Today report covering federal, state, and private sector compensation filed by Dennis Cauchon.

Here’s the rundown in round numbers:

• The average civilian federal worker earns — I’m sorry, “gets paid” — over $81,000 a year. After adding in almost $42,000 for benefits, he or she receives total compensation of over $123,000.
• For state and local government employees, the analogous figures are a shade over $53,000, almost $17,000, and nearly $70,000.
• Private sector workers average about $50,500 in pay, $10,500 in benefits, and just over $61,000 in total comp.

For those keeping score, the average federal worker — oops, “employee” — is paid 60% more than his or her private sector counterpart, receives bennies that are four times greater, and gets a total compensation package that is more than twice as high.

You know things are out of whack when including UAW workers at government-controlled General Motors in the federal government’s numbers (they aren’t; GM — get ready for this — calls itself “a private company” in its regulatory filings) would more than likely bring those averages down.

According to Cauchon, the status quo’s defenders claim that “the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.” I don’t think so, because USAT’s reported figures are averages, not medians. While there are upper limits on what federal workers can be paid, a relatively small but numerically influential group of extremely productive and successful private-sector participants makes quite a bit more. I wouldn’t be at all surprised to learn that the federal-private differentials using medians are even greater than those seen above using averages.

Regardless, Cauchon in effect reports that for the time being the differentials, no matter how calculated, are on track to grow:

Last week, President Obama ordered a freeze on bonuses for 2,900 political appointees. For the rest of the 2-million-person federal workforce, Obama asked for a 1.4% across-the-board pay hike in 2011, the smallest in more than a decade. Federal workers also would qualify for seniority pay hikes.

So there will be a drop-in-the-bucket freeze accompanied by pay hikes for everyone else. Big deal.

There’s more. Those “seniority pay hikes,” known as “steps,” which typically average about 1.5% according to a related USAT report in December, will remain untouched. Thus, a typical federal employee will make almost 3% more in 2011, while the cushy benefits march merrily on. This is what the ruling class wants us to believe constitutes “austerity.” It’s nothing of the sort. How many country class readers are counting on a 3% raise next year, or for that matter got 3.5% this year, as federal workers did (2% across the board plus the 1.5% “step”)?

Oh, there I go again. I meant “federal employees.”

I deliberately included the three little digs above at our federal workforce to set the stage for a few important points.

The ruling class wants us to be believe that they and most federal workers are among the best and brightest society has produced. In many instances this is true, but Claremont’s Codevilla tells us that this is very often not the case in executive positions — in contrast to, of all places, France (italicized text is in original):

(In France) people get into and advance in that bureaucracy strictly by competitive exams. Hence for good or ill, France’s ruling class are bright people — certifiably.

… While getting into … France’s ruling class requires outperforming others in blindly graded exams, and graduating from such places requires passing exams that many fail, getting into America’s “top schools” is less a matter of passing exams than of showing up with acceptable grades and an attractive social profile. American secondary schools are generous with their As. Since the 1970s, it has been virtually impossible to flunk out of American colleges. And it is an open secret that “the best” colleges require the least work and give out the highest grade point averages. No, our ruling class recruits and renews itself not through meritocracy but rather by taking into itself people whose most prominent feature is their commitment to fit in.

One of two things results from this overabundance of arrogant mediocrity. Some mediocre execs never figure out how ineffective they really are, and run things poorly. Others quietly figure out that they really are in over their heads, and end up either finding a smart but non-ambitious assistant who will make them look good, generally hiring line employees who won’t be threats, or both. In either case, the result is far less than optimal.

Of course, all of this can and does happen in the private sector, with one important difference: It can’t and doesn’t last. Private-sector entities which let mediocrity run rampant eventually find themselves run over by competitors who haven’t. This forces them to rid themselves of the mediocre or die. An exec who resists doing what must be done will usually be replaced by one who will.

In the federal government, that doesn’t happen. The absence of competitive pressures enables managers to take the easy way out. Thus, the mediocre hang around. Some of them figure out that they can get away with being virtually nonproductive. Others figure out that the best route to job security lies in being “productive” in really destructive ways. These are the people who go crazy writing rules and regulations. Add in unionization accompanied by a built-in reflex to defend even their most obnoxious members, and out-of-whack pay and benefit levels which make even looking at private sector employment seem foolish, and you have a recipe for organizational inefficiency and bloat unlike any other.

Because they also lack direct competitive pressure, organizational ineffectiveness often reigns supreme in state and local governments. But at least state and local pay and benefits are much closer to the private sector’s than they are to Uncle Sam’s. That’s because of the nearly universal requirement that these governments must balance their annual budgets. If the states or locals want to pay more or hire more, they have to collect more in taxes. Though there are far too many glaring exceptions, e.g., Bell, California, it’s still generally the case that the taxpaying public will tend to resist unreasonable attempts at expansion and unreasonable pay scales, and will often vote politicians who have supported or implemented such efforts out of office.

The federal government has no such fiscal constraint. When its budget doesn’t balance, it simply prints more money.

The only remaining potential check on the out-of-control growth in federal pay, benefits, and spending in general lies in the electorate exercising its power at the ballot box. For decades, the country class has generally stood by while the ruling class, its servants, and dependents have grown in number, wealth, and influence, regardless of which political party has controlled the executive branch and Congress.

Will this time finally be different?