Currently, the average pay of federal workers is over $71,000 as compared to approximately $50,000 in the private sector. Over the last 18 months, the number of federal employees making over $150,000 has more than doubled, to over 10,000. In 2009, government salaries increased 2.4%, twice as much as private sector salaries.
Government unions have negotiated unbelievably generous employee pensions, some allowing workers to retire in their 50s with lifetime incomes equal to 90% to 100% of their final years’ salaries that come with cost of living adjustments and lifetime medical care. Keep in mind that government pensions are “defined benefit” plans, meaning the government guarantees the benefits even if the retirement accounts are inadequate to cover them, in contrast to 401(k)s or IRAs, which have no such guarantors.
This largess comes at a very high price to the states. According to a new report from the non-partisan Pew Center on the States, by mid-2008, state governments, succumbing to overwhelming pressure from the unions, had promised employees and retirees benefit packages amounting to a trillion dollars more than the states had on hand. And that was before the market crashed, decimating the states’ pension funds. By coercing them to them to make promises they can’t possibly keep, unions are endangering the states’ very solvency.
How do they get away with it?
Think $182 million. That’s how much public sector unions have contributed to federal campaigns since 1990, according to the Center for Responsive Politics. In the 2008 election cycle, they contributed over $19 million, with 89% going to Democratic candidates. I would assume that buys a whole lot of benefits.
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Based on this data , I am thinking that the good life starts the day one gets a job as an employee of your local Labor Union and in fact those overpaid financial sector people might want to change jobs!
This table, based on data from the Bureau of Labor Statistics, shows the changes in the wages in three sectors: the private sector, the Labor Union industry and the financial industry. According to the BLS, the Labor Union industry “comprises establishments primarily engaged in promoting the interests of organized labor and union employees.” That’s basically all the guys who work in a Union. The financial industry is “The Finance and Insurance sector comprises establishments primarily engaged in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or in facilitating financial transactions.” So the Goldman Sacks, AIG and others.
As one can see clearly here since the beginning of the recession, private sector employees have seen their wages grown by 3.3 percent (roughly the rate of inflation.) The financial sector employees have been slightly better off with wages growing at a 4.1 percent rate.
Meanwhile, wages in the labor unions have continued to increase. And not by 5 percent or 7 percent but by over 24.9 percent!!!