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Further Observations On The Parabolic Blow Off In Federal Compensation
Earlier, we pointed out that over the past five years (with an emphasis on the past two), government worker compensation has exploded. As the topic appears to have touched a nerve, and will shortly become the topic du jour across every radio and talk show, here are some additional observations on this parabolic blow off top of a different nature from ConfluentResearch.
Going Parabolic, it's not just the price of silver, by ConfluentResearch
Prices of precious metals are bumping against their all time highs.
The price of silver, for instance,
has recently hit its 30 year highs and has gone parabolic. But it's
not just the price of silver that is
going parabolic, as it turns out, so are government wages. Data from
Moody's analytics are showing that total government expenditure on
salaries and
wages for federal employees has also skyrocketed as if going
asymptotic. The data is comprised of total salaries and wages
that were collected from 1983 through 2009.
Figure 1: Going parabolic
Source: Data provided by Moody's Analytics
There is increasing public scrutiny concerning the bloated compensation and benefits packages being handed out to federal employees as of late. Historically, federal employees receive more modest salaries relative to their private sector counterparts in exchange for job security and plush benefits. This has not been the case for the last few years, however.
A USA TODAY analysis of the data obtained from the Office of Personnel Management are also showing the same trends. In fact, at a time when pay and benefits have stagnated for most private sector workers, average compensation for federal employees has grown to more than double what private sector workers earn, a USA TODAY analysis finds.
Below is an excerpt from USA TODAY:
"Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade."
Figure 2: Analysis of government salaries and wages
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It's the government-sponsored, government-coddled unions that are ultimately responsible.
It really is outrageous.
I am not going to disagree with anyone who can point to a specific union and show where or how it is corrupt, many are. But the fact is, unions are imperative for workers rights. I am not going to list all the services that a well run union can provide for workers. Without them though, imagine what labor would be like, and go ahead and imagine it in terms of children, women, and anyone who would be interred, as most workers were before the uprising that took place with the formation of unions in America.
Worker's rights are truly worth protecting and I agree with that statement 100%. No one, anywhere, should be subject to deplorable working conditions, low wages and other abuses made so popular in mercantilist economies back in the day.
The keyword there is back in the day...
I have worked in the Veteran's Administration Hospital system and the point I would like to make is that the workers there are hardly misrepresented, the working conditions are very good, compared to what you mean about abusive workplaces.
The crazy stuff those people get away with is unbelievable. I can tell you some stories. Patients waiting for hours in hallways, no one really moving any faster than necessary to appear somewhat busy.
An MRI tech I know left a patient inside the MRI machine because it was 6:00pm. Quitting time. Just up and left him.
This is the same guy who was caught screwing an x-ray student...in the hospital! This is the same guy who had one of his friends who works in personnel track down and copy his bosses file so that he could get dirt on him. Again, caught red-handed.
Not only that, but this is the same guy who is the union liaison for the hospital!!! And this ain't no rinky-dink, podunk, isolated place, either. This is the Michael E. DeBakey VA Hospital in Houston, Texas, the flagship VAH on the Gulf coast!
Yeah, I'm talking about you, Tommy.
And that is just one guy. I could go on and on but I think you see my point. Far from protecting the workers against abuses, it is the unions that are abusing the system and veterans of foreign wars who are suffering because of this outrageous state of affairs.
I have every reason to believe that these same abuses occur in other governmental agencies and departments throughout the entire corrupt and inept system.
Like I said, it really is unbelievable.
Tommy is a dick. So are a lot of people. Tommy sucked at his job. So do a lot of people. I too could give example after example about how people who when coddled at the tit of job security take advantage of the system in such a self serving manner that it will lead to horrible output. It is my view that it will be this very loss that destroys the system itself; that very system's implosion. I find that people do their jobs so poorly in most cases that this loss of output vs. the loss of input, thanks to unemployment, will be soon so catasptrophic that it will send the dollar's value to the depths of the FIAT Empire. American blood, sweat, and tears is what backs the dollar after all ("we promise, kiss kiss" says Timmah Geithner), and Americans sure ain't sweating, the time is over for crying, and that leaves, yes, blood.
Jimi, look. It is not about Tommy, okay? Tommy is just used as an example.
The entire place was run that way! The entire place.
When I say the entire place, I mean the whole hospital was run that way.
Another quick example:
They were making department heads spend money so that their next year's budget wouldn't be cut! Apparently, if you didn't spend it, you didn't need it, so, instead of having the budget cut, they spent it! (Happens everywhere in every government agency, so I am told....)
So you know what the department head of radiology did? He signed a contract to put down on six MRI machines.
Six.
MRI machines.
Dude. Please.
I am familiar with the business practice you mention (next year's budgeting example). I know it happens in the government and like I said, there are many examples. Dude please all I said were Unions were imperative for the creation of workers rights. Workers rights will be taken if the government does not use unions, because corporations do not (or do minimally). Corporations bust unions, all the time. That is the history of corporations, they bust unions. If you welcome a world where corporations are running the world, I do not. Corporations do not give workers a fair chance, because at the ground level the unions get squashed.
Well, yes and no. And I appreciate the interesting discussion, by the way.
When the mercantilist ideal was set throughout the beginning of the Industrial Revolution, there was an obvious collusion between businessmen that kept wages as low as possible, conditions as inexpensive as possible and profit margins as high as possible. It was so bad that it was common practice in the Coal Belt to have workers and their families live on campus and pay rent to the company, pay for food at the company store, etc.
Sixteen Tons...
I am aware of that. However, in today's world, most corporations and small businesses have very little incentive to bust unions. First, because most fields of practice today do not have union representation, a la Seamstresses or Pipefitters. I just can't imagine a union for IT professionals, you know?
So, in that way, unions are not needed. In fact, workers are now free to move to any company they choose, more or less and the competition for good employees is fierce. There is an article today on MarketWatch that has Eric Schmidt of Google denying rumors that his employees are leaving the company for better conditions. This is after Google announced an across-the-board 10% pay hike.
Unions are, for the most part, an unnecessary relic of a by-gone, mercantilist era and should, for all practical purposes (excepting safety for dangerous jobs, for example...) be abolished.
IT jobs are being sent over seas so fast should they start a union, I couldn't blame them! And unions happened at the end of what has been the mercantile era, considering the mercantilist era began hundreds and hundreds of years ago, I would not say it is as much a part of the era as the end of it. I still think that it is the mercantilism of corporate industry that wants to bust the unions however, Paul Krugman et al (for an example to this reference of Krugman supporting mercintilsim please see his 44 min nobel lecture I have titled "The Rise of Firms"), and if this happens, workers rights, meaning American/European rights, will find themselves in the dumpster. Do I think that government unions are the answer? I will not be that specific. But I do think that unions are a necessity, and not an evil. And one last point here, in the hands of anyone who is dangerous, any one thing and/or idea can be used as a liability.
My idea was the culmination of the abuses that evolved from mercantilism gave rise to unions, specifically after the Industrial Revolution. (Sometimes the ideas come too fast and these fingers don't move as fast as my brain!)
Have a great evening. :D
Orly
Thank you for sharing your thoughts tonight, Orly.
It's Europe baby! Either slave away for a few after-tax crumbs of grow fat at the public tit.
Just ask the union workers at BP DeepwaterHorizon!
Or the 33 at the Chilean mine!
Oh...wait...
The government union in BP or in Chile?
Why don't you read more carefully before voicing an opinion?
Government unions.
Seriously, can anyone give me one good reason why the United States Government should have any unions at all?
Because it will hasten the SHTF. The quicker we get to that, the quicker we can rebuild the republic.
Government unions.
Done by Executive Order in 1962 if I recall.
I apologise. I don't mean to be rude. Just this subject really sticks in my craw.
/:
Seriously, why should public sector employees be allowed to have unions at all? The purpose of public sector workers is to provide services for the public. It's not like the public is in a position to exploit the workers to squeeze out that much more profit for themselves - there is no profit to squeeze.
If pay is too low and/or conditions too poor then salary/benefits will have to rise or the position will go wanting and the public won't get the service. I'm pretty sure labor supply and service demand will eventually arrive at an acceptable price at that point and in the meantime those workers can go get a job in the private sector like the rest of us.
Instead, public sector unions like the SEIU (why International - is that in the public interest?) exploit the taxpayers. They're big enough to win elections (for Democrats, let's face it) all by themselves and then they ratchet goodies ever upwards for themselves too - while also exempting themselves from authoritarian mandates like Obamacare.
What the fuck does Karl Marx have to say about that?
You should win a prize for that rant!
Took it right out of my head...
:D
Hearst wanted to bust all the unions up in Deadwood. Obama didn't let him. So, he got into banking. Then, they both cut a deal where they both won.
Now, The Bernank has to buy treasuries.
The "fact is" that all unions are out for themselves not "workers". Their efforts benefit themselves only while hurting "workers" in aggregate. I know! That doens't really gel with the tripe your local organizer/progressive/public education/public TV documentary told you does it?
+1
Bullshit. Unions are modern day mafias. Part of the problem not part of the solution. You can thank unions for making america's labor force totally uncompetetive with other parts of the world. Unions belong in the same bag with politicians, lawyers and bankers. Then we can all beat that bag with baseball bats and know we're always hitting the right one.
+99
Amen Boboberson!
+1
Right on bobboberson. Unions are out for their top guys - they are after the power and $$ just like the other players you mentioned.
Unions aren't needed today - all the information and transparency is online. Problem is that the workers are needed to put forth the effort to make the change (and that is so un American, where u pay someone to do the work that is too hard for you or interferes with Dancing with the Stars).
Do we know all the details? Does this include costs for the NSA and the rest of the Security State? For Blackwater and the rest of the mercenaries that are part of the war machine?
They are but one component of this whole sordid mess, and it's not just unions' fault. Plenty of blame, really.
Part of the problem (as it applies to unions) is that the members are voting for their own boss, and in some cases, can hold politicians hostage with exorbitant demands. Some of the profligacy mentioned in this article is a result of politicians buying votes, and some is from old fashioned extortion by union bosses. How much of either is anyone's guess (does it even matter?)
How long until we see a genuine tax-revolt?
I don't think the American social-contract involves getting bent over and assraped by one's fellow Americans. And I don't think people are going to continue paying taxes so that they can "support" the salaries of those making on average 2x what they themselves are making.
At some point, people are going to say: "Fuck off. You can't throw us all in jail".
And then we've got a serious clusterfuck on our hands.
But we're getting close to that. Every single day, we see examples of the privileged not obeying the law, evading taxes and fleecing the system. To make the argument that refusing to pay taxes is somehow a "greater crime" is stretching any definition of morality and law.
Tick, tick, tick...
Its okay as long as those Americans bending you over are wearing corporation condoms.
It's okay to rape, cheat, steal- hell, incorporation even makes the legal system completely moot and inapplicable.
I think that this will continue until one day no one shows up to the Treasury auction to buy US bonds. This will precipitate a cash flow crisis that will result in a take down in public sector pay - just as it has in Greece.
Welcome to the farm.
Four legs good, two legs bad.
If there was ever a pointer to the socialist wave, this has to be it!
OI
http://aadivaahan.wordpress.com
All animals are equal.
Some animals are more equal than others.
Orwell
Classic.
ORI
Albert Einstein wrote "Why Socialism".
http://www.monthlyreview.org/598einstein.php
He knew something.
A bad essay can make anyone look stupid.
far away on the other side.
When this song came on to the scene, it took Europe by storm. I was there.
Unique guitar, singing and lyrics. WTF was this? Fast forward 30 years later.
It is still amazing and used by popular shows. Here it is. Parabolic but never comes down. At one time it had 40 Million views. silver and gold gaming I think.
http://www.youtube.com/watch?v=KuQrMG-uJpM&NR=1 hit 50 million on youtube, but google reset it. Why?
http://www.youtube.com/watch?v=tt8d3Shlfrg&feature=related
http://www.youtube.com/watch?v=OXevZPG5e9I
Hello inflation
more "hope and change" and bankruptcy
As far as I can tell, the total annual compensation for federal employees is actually less than the total annual interest paid on the federal debt.
At least the money spent on employee compensation actually buys the taxpayers something -- services. The interest payments are just redistributions of wealth to the nation's already rich creditors.
The irony is that most of the interest on the debt is paid to the same rich elite who are benefitting from the tax reductions that caused the debt in the first place. So not only do the get higher profits, they also collect interest in return for the priveledge of paying lower taxes.
But forget about that -- let's get mad about stuff we can actually relate to -- some of our fellow peons are making a little bit more than us! Outrage!
This argument is like saying "I'm not worried about the gunshot to my stomach because it's only a 9mm, that .45 slug to the chest is definitely the problem!" How about it's all a problem?
The .45 slug to the chest hit the left ventricle and needs immediate attention. The gums bleeding can be dealt with at the dentist.
You confuse "services" with "oppression".
Most government employees spend their time telling private individuals what they can't do.
+1
A twenty-fold increase in those making >$180,000 is not them "making a little bit more than us". It's a tell-tale sign of completely rampant government spending. The economy is crumbling around us yet these government leeches are making vastly more than they were just five years ago. These increased salaries will translate into massive increases in pension obligations over the next 50 years as well.
When we're paying a large portion of our GDP on federal employee compensation and retiree's benefits, will you change your tune?
"The irony is that most of the interest on the debt is paid to the same rich elite who are benefitting from the tax reductions that caused the debt in the first place. So not only do the get higher profits, they also collect interest in return for the priveledge of paying lower taxes."
Then default on the debt. It only hurts the "rich elite". I can't imagine that anyone's pension, 401(k), or shit even savings or money market account holds onto US govt debt. Yeah! Those fucking rich elitists with your money hoarding in treasuries. No more raping America with your passive wealth savings!!!
Hahahaha.
Semmingly in Washington as well as Wall Street, a fat paycheck soothes a bruised and battered conscience.
Close one eye, hold your breath and beat the country and you neighbors into submission. Yield slaves yield ... and give me half of your earnings so that I can live better.
You do want the best government that money can buy don't you? (yes, but there seem to be an inverse relationship between money and government effectiveness/approval.) When the going gets tough, the greedy go to Washington... to join the slothful and criminally narcissistic.
Wait. Government employees are insiders. Their compensation is parabolic. Silver is parabolic. Ergo, they must be buying silver. Thus, FRN will be the new CSCO. QE-D.
I know this .gov employee is buying silver ;o)
Tumors keep growing even when the patient is dying.
So just within the last 2-3 years, total government spending on their employees has increased $800 Billion a year.
That's right, we could save $800 Billion a year just by reducing government compensation to its levels 3 years ago.
Astounding. I found it interesting that between 1993 and 1999 government compensation hit a plateau, even dropping a little bit. Could this somewhat explain the mythical "budget surplus" of Clinton? This graph completely refutes any belief that Republicans are about limiting the growth of government.
Good points.
I'm retarded. It's $80 Billion, not $800B
Still a valid idea. Government worker pay should at least be examined.
Interesting that this should be posted the same day that the WSJ reported that CEO pay is now back to pre-recession levels and the bonuses for the banksters keep rolling in.
Keep in mind that the post lumps all Federal employees into one big body that by implication indicts all Fed employees as slurping up exorbitant salaries they do not deserve.
Hard times always bring forward scapegoats, the Germans had the Jews, I guess Americans need to throw Federal Employees under the bus, since in our looking glass society it would be unseemly to demand that the perps who mismanaged the Economy into the junk pile should pay; both pecuniarily and morally.
I don't know what a CDC Epidemiologist is worth but I would hazard a guess that the pay difference between the PhD and a CDC lab tech is far lower than that between a Bankster and an Accounts payable clerk.
And no, I am not a Fed employee. I run a bookstore.
Your point is not inaccurate, but there is no shortage of outrage on Zero Hedge at what the banking elite have done to this country and economy. I urge you not think of it as an either/or proposition, there is plenty of blame to go around (don't forget the idiot politicians and foolish legislation and careless regulations).
Agreed. Outrage needs focus and proportionality to the cause or it's useless and maybe counterproductive, especially if the Chamber's shadow research organizations start tampering with the velocity of opinion.
We have three massive problems to solve, banking, banking and banking.
Not enough outrage?
Without focus on the Perps, the crimes against this society will continue. Before moving on to the Government employees address the Banking elite and their contributions to the Legislative branch will dry up like a lake in the desert.
I have linked to a chart of US Government GS pay scales for the DC Metro/N.Va/Md area. The scales differ by area and I guess this is because of varying cost of living adjustments to pay? Note there are 10 step in each grade from GS1 thru GS15.
Some state governments, and publicly funded utility functions of same, use the Fed GS pay scale as a guide for pay grades for their state workers.
Note the highest level of pay shown is for a GS15 step 10 = pay of $153,200 per year.
I worked in DC for 7 years as an engineer for a private contractor building and testing automated train control function of the Metro Rail System and never met a GS 15, although I met some GS 14s and lots of GS 11-13s. I assumed at the time that people like Kissinger were GS 15s. IIRC the head of Metro was a TA 14 which had the same pay as a GS 14. Just sayin'....anecdotal info for those interested.
BTW, there may be other ways that the GS grades are paid that I am not aware of, since I never worked for the Gov except for the required time (back then it was join or get drafted) in the US Military.
http://www.opm.gov/oca/09tables/html/dcb.asp
Here's the problem, in my opinion:
The growing number of people who's livelihoods depend 100% on government money, operate under the mistaken impression that they are taxpayers because they have to file a 1040. They're not. They will vote for their own comfort, not what is right for the country.
There's another whole subset of people that also think they're taxpayers because they're not employed directly by the government (road workers employed by contractors, for example). Hate to break it to ya, but your not a taxpayer either.
Look at Wall Street - a failed capitalist endeavour now completely backstopped by the taxpayers (which means not them). And they want to dictate policy?
Everyone who works fo General Electric (especially CNBC) - not a taxpayer among them. Well, maybe Cramer when he sells books.
Most of the people clamoring to shape policy are not actually taxpayers themselves, so guess who's gonna get fucked every single time? The trouble is real taxpayers are on the verge of extinction.
Mogambo's not lying when he tells you "We are so freaking doomed!"
Mogambo Guru. About the only thing I could stand about the Baltimore enterprise.
Funny guy. Repetitive but funny.
Yes, but as events unfold, I'm realizing that, "We're freaking doomed, buy gold, oil and silver," is all I ever really needed to know.
If the government is so good at running things, why are most gov employees unionized?
because sweetie, unions are good for labor and are necessary to protect their phony baloney jobs
The State always and everywhere consumes the host in the end. Seems to be the human condition.
I'd rather pay them than most of the lazy scum on welfare...
Articles like these always annoy me. What these articles don't ever factor in, is that the range of Federal and State pay is $35K- around $200K (which is the President's salary). While the pay range in the private sector is much wider and as a result change in the small government pay range will always outpace increases in the pay amount of the private sector. Where individuals can make between $12K and as much as $1 million plus a year. It is simple mathematics people, but honestly I don't expect most people to understand mathematics at this point. But more importantly, it is misdirection.
The important matter is that how much government employees are getting paid isn't the real issue in the economy right now. Granted you could freeze pay gov employees for 5 years, but know that if you start laying these people off, or start taking away the benefits (which are major job perks) they will start competing with you for your jobs. Either that or they will be added to the existing millions of employed people which doesn't help the rest of the country out at all. Finally you have to keep in mind that state and Federal employees provide social services to the communities, states and other areas that you live in and that without them, the country would cease to run efficiently. Majority of these people aren't elected officials and aren't the REAL problem. So the next time you see an article complaining about Government pay, remember that the Federal Reserve is not a government entity and that without Government officials, corporations and private (not public) interest like the Federal Reserve would provide the services need to run the country and that there would be a cost which none of us would ever want to pay.
Have you checked out school superintendent salaries recently. I don't even know what a schools superindendent does except schlep around looking dopey and talking to principals that basically do the same thing, what a waste.
Real estate taxes, as a direct result of school waste, are making it not worth buying even distressed properties in many areas.
What is not included in those figures are the equally (if not more so) outrageous "double-dippers". These are people who retire from the government and then come back as highly-paid "consultants" because of their expertise in how government works.
I see GS-14's and GS-15's do this all the time. Retire. Take 2-3 months off. Come back as a $120k Consultant while drawing retirement. "By the way, did you see my new 7-Series BMW?"
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