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Pay policies must change

By Staff | Dec 17, 2010

Chet Culver demonstrated once again last month why Iowa voters were wise to send this disappointing governor and his team packing. In its waning days, his administration approved pay increases for some of the state’s unionized workers that will cost taxpayers in excess of $200 million.

At a time when the economy is hurting, inflation is virtually nonexistent, many private sector employees have gone years without wage hikes and unemployment remains high, approval was granted by the Culver administration for two consecutive annual raises for state workers represented by the American Federation of State, County and Municipal Employees – AFSCME.

Gov.-elect Branstadt and the Legislature will face difficult choices as they strive to fund vital state services during a time when state revenues will grow slowly – if at all.

This is not a time when annual pay increases for state workers should be granted without a hard-nosed review of government compensation policies.

Pay and benefits for government workers at all levels need to be re-evaluated. There was a time when public employees received modest compensation compared to those in the private sector with similar jobs. That is no longer true.

Today, in addition to having greater job security than people in the private sector, government workers typically are paid more highly and have benefit and pension packages that are generous – perhaps too generous.

In September, the Bureau of Labor Statistics of the U.S. Department of Labor released a statistical analysis that illustrates why it is time to rethink government pay policies. According to the BLS, in June 2010 the total compensation for state and local government workers averaged $39.74 per hour worked. The comparable figure for those employed in the private sector was $27.64.

Many state governments face budget crises. Runaway pay and benefits costs have brought some states to the verge of insolvency.

The situation in Iowa isn’t that dire, but the trends that have bankrupted less frugal states are evident here as well. Consequently, it is imperative that the Hawkeye State take a hard look at its public employee compensation approach.

It is still possible to craft pay policies that are fair to government workers, but also take realistic account of the revenues available now and in the next few years.

It is unforgivable that Culver has complicated the situation for his successor by treating the AFSCME pay demand as routine business rather than an opportunity to take stock of what is fair and affordable.

If this happened because no one thought the matter through carefully, it is a failure of leadership. If it took place – as some are suggesting – as one last opportunity to reward an interest group that has aided Culver politically throughout his career, the matter is more sinister.

Farm News deplores this decision and urges Branstad and state lawmakers to reopen the AFSCME agreement if that is possible.

At the very least, this unfortunate event should underline the importance of making a review of public employee compensation policies a top priority for the year ahead.

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