Sizing Up the Other Fellow

Here's a nice piece by Dean Baker pointing out the oddity of the political right in the US which loves to claim that public sector workers get "too much" but then are blind to the choke-a-horse excesses in certain sectors of the private economy, e.g. Wall Street:

The Washington Post told readers that the battle over pay for public sector employees, "comes down to a matter of perception over what qualifies as modest and what is too much."

This is not true. Many of the people who are advocating cuts in compensation for public employees support much larger pay packages in other contexts. For example, the overwhelming majority of public employees earn less than $100,000 and can only start collecting full pensions after 30 years of work.

By contrast, many Wall Street executives earn well over a million a year and can often walk away with multi-million dollar packages while still in their 50s or even 40s. Few of the people who have been at the forefront in protesting generous pay packages for public sector workers have been complaining about Wall Street pay. They have not even been bothered by high pay at banks that get government subsidies in the form of "too big to fail" insurance.

For another example, the economists at the IMF can often retire with 6-figure pensions in their early 50s. The IMF has been at the forefront in demanding that governments raise their retirement ages and reduce the generosity of benefits.

The question is absolutely not "what qualifies as modest and what is too much." This is entirely a question of how much mid-level and lower level public sector employees should earn relative to other actors in the economy. Many of those who earn far more than these public sector employees want to see their pay cut.

Go read the original to get the embedded links.