Menu Bar

Home           Calendar           Topics          Just Charlestown          About Us

Wednesday, April 6, 2011

Taxes: are government workers the problem?

The quick and short answer is NO. Read down and I'll explain why.

As I wrote yesterday in "Class War and Fair Taxes," government workers have been made the scapegoats in our  current debates over deficits, usually by those who are trying to shield the rich from paying their fair share of taxes.

Even here in Charlestown, there have been comments in the CCA e-bleat calling for drastic cuts in the town worker salaries and benefits rather than a higher tax rate.The next thing I expect to see CCA promote is an all-volunteer town government - no more paid police, town hall staff, public works, etc. Just happy CCA volunteers processing your papers, scooping up road kill, maintaining our beaches and recreation areas and - suitably armed - patrolling our roads. That'll really cut the tax rate!

But I digress. This morning, an Anonymous poster wrote the following comments about public workers.

Anonymous said...
Most economists agree that a healthy state has no more than about 25% of the people working for the government. The US is at about 40%. When you ask for fair policies, the solution is not inequitable taxation policies. Our state is broken. One simply cannot outspend revenue. The answer is reduction of government and reduction in spending. We need a better model...New Hampshire seems to be doing well and it has no income or sales tax, only property tax.

First, who are the economists who believe there is a 25% limit on public workers? Most economists I've read (e.g. Nobel laureates Paul Krugman and Joseph Stiglitz) say public employment should be adjusted based on conditions. During the Great Depression, public works programs like the WPA and CCC kept thousands of families from starving to death. Plus they did great and lasting work, such as Burlingame State Park here in Charlestown.

But more damaging to Anonymous's point is completely wrong data, especially the claim that 40% of American workers work for the government.

The total US non-farm workforce is 130 million. Of those, 18.5 million work for the government - that's 14.2%. Local governments employ 12.2 million, another 4.4 million work for state governments and 1.9 million work for the federal government. If you add the 600,000 who work for the Postal Service and the 1.4 million military personnel, the total government payroll is 20.5 million or 15.8% of the workforce.

There is a big difference between 40% and 15.8%. And 15.8% is well below the 25% "healthy" threshhold that Anonymous supports. Hey, we could even hire another 11 million government workers!

Now, we all "know" Rhode Island is just so overloaded with public employees, especially state workers, that it's just ridiculous, right? Nuh-uh, that's totally wrong.

In Rhode Island, our total workforce is 449,000. The federal government employs 10,300 RI workers. State employees total 16,000. RI's biggest bloc of government workers are the 35,000 who work for local governments. Of those, 23,200 are teachers and other school workers. The total number of government workers in Rhode Island is 61,500 or 13.7%.

Again, a big difference between 40% and 13.7%. And I was surprised to see how low Rhode Island's public workforce percentages are compared to the national average. Plus, I had no idea that more than 10,000 of those workers are federal employees.

There is an interesting piece in today's GoLocalProv news site on how the cuts in the number of Rhode Island state workers has affected the ability of the state to deliver the services we all expect. Not surprisingly, you get what you pay for. Like not knowing whether the next zeppole you eat will send you to the hospital.

Please note that I have provided links to my sources. So, Anonymous, I suggest you re-check your own sources. I would love to have you come back with correct facts and new arguments, something I'm sure you'd be proud to sign your name to.

Author: Will Collette