Don’t Blame City Workers for New York’s Budget Woes
“Across the country, taxpayers are providing pensions, benefits and job security protections for public workers that almost no one in the private sector enjoys.” wrote Mayor Bloomberg recently in the New York Times, “Taxpayers simply cannot afford to continue paying these costs, which are growing at rates far outpacing inflation.”
The mayor’s rhetoric was calm and conciliatory, and he spoke out against the radical anti-union measures being implemented in Wisconsin, Ohio and other states. Yet Mayor Bloomberg’s overall message fed into the same set of misconceptions that have fueled outrage in the Midwest: New York is an impoverished city strained to the breaking point by the excessive compensation demanded by our overpaid public employees. We have no choice but to cut public pay and decimate employees’ retirement prospects.
There are a few things wrong with this story. First, New York City’s budget crunch - like the state’s budget problems and the budget shortfalls in cities and states across the nation - is the result of the recession brought on by excessive risk-taking on Wall Street and lax government regulation, not excessive spending or compensation for public workers.
Some cities are desperately poor and (absent the increased federal or state aid they ought to be receiving) have no choice but to dramatically cut services, lay off public workers, and lower compensation to manage the revenue shortfall caused by the recession. But New York is not one of these impoverished places. Instead, the mayor and other city leaders have made a political decision not to tap into the city’s tremendous and growing private wealth in order to help New York in its time of need. This despite the fact that there is no evidence to indicate that wealthy residents flee tax increases. (Also despite the fact that laying off public workers destroys private sector jobs.)
Now an eye-opening new report by City Comptroller John Liu crunches the numbers and casts doubt on the contention that New York City’s public employees are overpaid. Among the key findings:
- Without adjusting for age, education, or any other demographic factors, the average full-time government worker in NYC earns 17 percent less than the average private, for-profit employee.
- The wages of City workers on average are lower than their private sector counterparts even though City workers are more highly educated
- City employee benefits do not offset the adverse pay differential for highly-educated City workers.
The Comptroller’s study is well worth reading in its entirety. It may just have the power to change the debate in New York, and bring a new focus to options like Councilman Brad Lander’s ingenious proposal to bring in $8 billion in new city revenue by offsetting the extension of the Bush tax cuts on the wealthiest New Yorkers.