Topic: Government and Politics

New Federal Pay Data

The Bureau of Economic Analysis just released its annual data on employee compensation by industry. (See tables 6.2, 6.3, 6.5, and 6.6).

The new data for 2006 show that 1.8 million federal civilian workers earned an average $111,180 in total compensation (wages plus benefits). That is more than double the $55,470 average earned by U.S. workers in the private sector.

Looking just at wages, federal workers earned an average $73,406, which is 60 percent greater than the $45,995 average earned by private sector workers.

Average federal pay has soared in recent years, growing much faster than private sector pay between 2001 and 2005. However, federal pay growth slowed in 2006, while private sector pay accelerated. As a result, average compensation for federal civilians grew 4.0 percent in 2006, compared to the average in the private sector of 4.2 percent.

Hopefully, federal pay increases will continue slowing to help relieve the soaring taxpayer costs of federal workers. I’ve proposed freezing federal pay to help reduce the deficit and privatizing expensive activities such as air traffic control.

The BEA data show that compensation for federal civilian workers cost taxpayers $203 billion in 2006, up from $145 billion in 2001 when President Bush took office. (The costs of military compensation have grown even more rapidly, from $98 billion in 2001 to $156 billion in 2006).

The acceleration of federal compensation is clear in the figure below covering 1990-2006.

Source: Chris Edwards, Cato Institute, based on Bureau of Economic Analysis data

For further information, see

http://www.cato.org/pub_display.php?pub_id=6611

http://www.cato.org/pubs/tbb/tbb-0605-35.pdf

(Data note: The BEA data for number of employees is measured in full-time equivalents.)

The Airborne Version of the Post Office/Department of Motor Vehicles

Don Boudreaux’s Cafe Hayek Blog is always worth reading, but his recent complaint about the snail-like pace of passport control struck a raw nerve since I also travel frequently. Don makes the point that it is foolish for people to want government to take over health care when it is so incompetent at everything it does. That is a very valid point, but it understates the case. Passport control (and also security screening) should be incredibly simple. Data on flight schedules and passenger density is easily available. Yet somehow the bureaucrats are incapable of having staff on duty during peak times. So if this relatively easy task is beyond the ability of the bureaucracy, then something more complex like health care surely will turn into a disaster when placed in the hands of government:

The reason we missed our flight is that nearly 50 minutes of our time after landing was consumed by waiting in a long and slow-moving line to clear passport control.  At that terminal on Friday evening, the TSA had only three agents to service the line of U.S. citizens returning from abroad.  Three.  That’s it.  Most of the passport-control-agent booths stood empty.

Still No Consensus

A headline in the Washington Post (the actual newspaper, not the online version) reads:

Montgomery Still Lacking Consensus on Growth Policy

The article explains that officials in Montgomery County, Maryland, are having trouble agreeing on rules for limiting economic growth while leaving room for development. “I don’t think there is consensus on much of anything at this point,” said County Council member Nancy Floreen.

One reason that there’s no consensus, of course, is that there’s no consensus. The county’s 900,000 residents don’t all agree on who should be allowed to build new homes and businesses, who should have their property rights limited, who should pay the bills, and so on. This is why Hayek said that planning was not compatible with liberal values. The only values we can agree on in a big diverse society, he wrote, are “common abstract rules of conduct that secured the constant maintenance of an equally abstract order which merely assured to the individual better prospects of achieving his individual ends but gave him no claims to particular things.” That is, you set up property rights and the rule of law, and you let people run their own lives without being allowed to run other people’s lives. Try to go beyond that, and you’re going to infringe on freedom.

As I wrote a few months ago, another newspaper story reported

“As a consensus builds that the Washington region needs to concentrate job growth, there are signs that the exact opposite is happening.

Over the past five years, the number of new jobs in the region’s outer suburbs exceeded those created in the District and inner suburbs such as Fairfax and Montgomery counties … contradicting planners’ ‘smart growth’ visions of communities where people live, work and play without having to drive long distances.”

Maybe if tens - hundreds - of thousands of people aren’t abiding by the “consensus,” there is no consensus: there is just a bunch of government-funded planners attending conferences and deciding where people ought to live. It’s like, “Our community doesn’t want Wal-Mart.” Hey, if the community really doesn’t Wal-Mart, then a Wal-Mart store will fail. What that sentence means is: “Some organised interests in our community don’t want Wal-Mart here because we know our neighbours will shop there (and so will we).”

In her book It Takes a Village, Hillary Clinton calls for “a consensus of values and a common vision of what we can do today, individually and collectively, to build strong families and communities.” But there can be no such collective consensus. In any free society, millions of people will have different ideas about how to form families, how to rear children, and how to associate voluntarily with others. Those differences are not just a result of a lack of understanding each other; no matter how many Harvard seminars and National Conversations funded by the National Endowment for the Humanities we have, we will never come to a national consensus on such intimate moral matters. Clinton implicitly recognizes that when she insists that there will be times when “the village itself [read: the federal government] must act in place of parents” and accept “those responsibilities in all our names through the authority we vest in government.”

Governments would do better to set a few rules of the game and let market enterprises respond to what people really rather than try to push people into conforming to planners’ visions and phony consensuses.

Finally Legal!

I can finally report that I am driving a legal automobile.

As readers will recall, this was my third trip (see here and here for previous installments in the saga). Actually, it was my third and fourth trip. When I got to the DMV this morning, happily clutching the Fairfax County tax receipt to my chest, I was told that I also needed an emissions test. It would have been nice of the bureaucrats to tell me that on my first trip, but why expect miracles.

So I had to exit the line, go back out to my car, and drive (illegally, once again) to a nearby service station. This interaction with the private sector was predicatably brief, so I was back at the DMV in less than 30 minutes. Unfortunately, Dan Griswold must have been hard at work in the interim since there was now a long line of people, none of whom appeared to be native-born Americans.

But after a 90-minute wait, I got up to the counter, and was able to get registered - but only after dealing with a libertarian quandary. While twiddling my thumbs, I noticed that I could request a vanity plate. Wouldn’t it be nice, I thought, to have a license plate reading “anti gov.” But getting a special plate also involved paying more money - funds that presumably would help finance the sloth-like bureaucracy that I despise. After wrestling with my conscience (which usually comes out on the short end), I decided that the cause of freedom would be best served by having the vanity plate.

I feel guilty about giving government more money, but I somewhat compensated by paying for my registration and vanity plate with a credit card, which means at least some small slice of the $103 gets diverted to the financial services industry. It ain’t easy being libertarian, but I somehow muddled through.

Air Traffic Control

You often need a crisis, real or imagined, to get major policy changes enacted. There are two looming challenges in our backwards and bureaucratic air traffic control system that might nudge Congress toward reform. The first is that the government system is having a hard time keeping up with the continued growth in air travel.

The second, as Government Executive magazine reports today, is that a large group of controllers are nearing retirement and the government might have a hard time finding replacements.

These challenges add to the woes of the Federal Aviation Administration, which has mismanaged the air traffic control (ATC) system for decades. The FAA has struggled to modernize ATC technology in order to improve safety and expand capacity. Its upgrade projects are often behind schedule and far over budget, according to the Government Accountability Office. (Discussed in here). 

Privatization of U.S. air traffic control is long overdue. During the past 15 years, more than a dozen countries have partly or fully privatized their ATC, and provide some good models for U.S. reforms.

Canada privatized its ATC in 1996, setting up a fully private, non-profit corporation, Nav Canada, which is self-supporting from charges on aviation users. The Canadian system has received rave reviews for investing in new technologies and reducing air congestion, and it has one of the best safety records in the world.

The United States should be a leader in air traffic control, especially given the nation’s legacy of aviation innovation. A privatized system would allow for more flexible hiring policies, replacement of expensive human controllers with machines, and access to private capital for infrastructure upgrading. It is also likely that privatization would help improve safety and reduce air congestion by speeding the adoption of advanced technologies.

Great Moments in Local Government, Part II

I am moving ever closer to being a compliant citizen of Fairfax County and the State of Virginia. As I noted in an earlier post, I am seeking to renew the registration on my car, but I failed miserably in my first trip to the Department of Motor Vehicles.

The trip to the Fairfax County tax office was rather successful, albeit a bit puzzling. The ostensible purpose of the trip was to pay a mysterious overdue tax and then a $20 fee to remove a “hold” on my registration. But the County bureaucrat said there was no overdue tax. This made sense because I hadn’t received any notices in the mail, but I can only imagine why the automated system was trying to get me to cough up $174 (I’m now thankful my efforts to comply were unsuccessful).

Yet even though there was no unpaid tax, the County still insisted on getting $20 to remove the hold. In an ideal world, I would have loudly protested this ridiculous demand. In the spirit of the Founding Fathers, I would have pointed out the absurdity of being forced to pay the remove a hold for a tax liability that did not exist. In reality, the County got its money and I’m just happy that I have (at least in theory) just one final visit to the DMV.

I never did ask, by the way, why the County thinks I have four cars. While I am a tad bit curious, discretion is the better part of valor when dealing with bureaucracy. Stay tuned.