Does this sound familiar? The government is unable to cover payroll in full. A 40 percent tax on cigarettes sets off a flurry of angry text messages among smokers, and opposition groups warn new taxes could unleash a popular revolt. California? No, the Hamas government in Gaza.
Or this: Workers can retire after just 35 years of work at full pension and health benefits. San Francisco? No, Greece. In San Francisco, you can retire after 30 years of work.
Around the world and in the United States, an aging population with higher life expectancy and generous public sector pension and health benefits are bankrupting governments. State benefits plans are $1 trillion underfunded. It’s getting worse.
Since the election of President Barack Obama, the number of federal employees making over $150,000 a year has more than doubled to over 10,000. In San Francisco, one out of every three city workers earns over $100,000, not including pension and health benefits.
In 2009, federal government salaries jumped 2.4 percent, about twice the increase earned by private sector employees. The average salary of a federal worker is now $71,000, about $22,000 more than the average private-sector employee. In San Francisco, the average is $83,000, not including benefits.
How did we reach this point? In the late-1950s, New York City Mayor Robert Wagner signed an executive order authorizing city workers to unionize, and soon other local and state Democrat legislators around the country followed his lead. Then in 1962, President John F. Kennedy granted federal employees the right to collectively bargain.
But that was then. Now governments — Greece, Portugal and Spain in Europe, states like California and cities like San Francisco — are facing the consequence of years of incremental increases in salaries and benefits. California, San Francisco and Washington are postponing the inevitable.
There’s a silver lining. When socialist nations like China, the Eastern bloc and Russia finally cut burdensome public sector jobs, closed state factories and reduced their pension obligations, it unleashed the private sector. That’s the unalterable truth about socialistic policies.