Liberals increasingly seem to think it’s good politics to talk about income inequality in America.
Their solution for this alleged problem usually involves placing higher taxes on the so-called “rich,” which often just get passed down to everyone else.
But one real example of income inequality the Left doesn’t like to talk about is the huge difference in pay and benefits between federal government bureaucrats and those employed in the private sector.
From the Wall Street Journal:
Here’s a story that is emblematic of life in Washington, D.C.: The Department of Veterans Affairs—a well-known sinkhole of mismanagement—handed out more than $142 million in bonuses last year. Taxpayers stumbling across this news might have been surprised by these rewards for bureaucratic incompetence, and perhaps they also got the sense that working for the federal government is a sweet gig. They’re right.
A review of the nation’s capital turns up ample evidence: In a report released last month, Cato Institute budget analyst Chris Edwards calculated that the average federal employee earned $84,153 in 2014—roughly 50% more than the average worker in the private economy. When you include benefits like health care and pensions, the average federal worker’s compensation rises to $119,934—nearly 80% higher than everyone else. “The federal government has become an elite island of secure and high-paid employment,” Mr. Edwards wrote, “separated from the ocean of average Americans competing in the economy.”
This is one major reason why, in study after study, the citizens of Washington D.C. and the cities surrounding it always rank at the areas that are most optimistic about the American economy. I’d be optimistic too, if I was making 80 percent more than the average private sector worker.
But an economy where it’s more lucrative to pursue government work than private sector employment is anything but sustainable. After all, it’s the people working in the private sector that pay the salaries of those working for the federal government.
Hayek predicted this kind of situation in 1944 in his classic book, “The Road To Serfdom,” when he wrote:
But the policies which are now followed everywhere, which hand out the privilege of [economic] security, now to this group and now to that, are nevertheless rapidly creating conditions in which the striving for security tends to become stronger than the love of freedom. The reason for this is that with every grant of complete security to one group the insecurity of the rest necessarily increases.
As the federal government grows larger, it hands out “the privilege of economic security” to bureaucrats — while those in the private sector experience an economic “insecurity..(which) necessarily increases.”
If the Left is truly worried about income inequality in America, it should focus on the rapidly increasing pay and benefits of federal government bureaucrats — which comes at the expense of private sector employees.
You can read the entire Cato Institute report here.