Speak Up Memo

The Voice of Young ConservativesTHE WEEK OF APRIL 26, 2010

The Outrage

Used and forgotten. In 2008, young people gave Democrats their vote and in 2009Democrats showed young people the door. Well it’s time to tell the Democrats tostop and listen up. From health care to student loan reform, Democratic policieshave consistently ignored the needs of our generation. If we want change, 2010must be different.

What You Can Do About It

Speak up! As a conservative we must begin to win hearts and minds before we canwin elections. The process starts by educating people about what we truly believe. It starts with you in the classroom. We’ll arm you with the facts you need to win the argument. It’s your job to carry themessage on to your campus. It’s your job to speak up! By engaging ourselves in thedebate, we’ll spread the message of conservatism – the message of smallgovernment, Xiscal responsibility, and individual rights – to one campus, oneclassroom, and one student at a time.Over the next Xive weeks the CRNC will be looking into the growing entitlements that left unreformed will doom this country’s Xiscal future. We must realize that government is not the solution to the problem…it IS the problem.

This Week’s Theme: The Public Sector Problem

The Promise

: President Obama has said, “[w]e are spending money on things wedon’t need and we are paying more than we need to pay.” To Xix the problem hesaid,“I can promise you that this is just the beginning of a new way of doing business here in Washington, because the American peoplehave every right to expect and to demand a government that is moreefXicient, more accountable, and more responsible in keeping thepublic’s trust.”

The Reality

: The public sector continues to grow in numbers and government employees continue to earn more than their private sector counterparts. Thegovernment fails to understand that an over‐stressed private sector cannot continueto subsidize a bloated bureaucracy.

Fact 1

Public Sector Far Out-Earning the Private Sector

According to the Commerce Department’s Bureau of Economic Analysis the averagewage disparity between federal and private sector workers was approximately$60,000. When we take state and local public employees into account a similar trendemerges.Datacompiled by the Cato Institute Xinds that,“The average compensation in the private sector was $59,909 in 2008,including $50,028 in wages and $9,881 in beneXits. Averagecompensation in the public sector was $67,812, including $52,051 inwages and $15,761 in beneXits.”A job‐by‐job comparison also reveals the startling pay difference between the publicand private sector. In fact, in 83% of comparable occupations, federal salaries exceedprivate sector pay. Consider a sampling of dataprovided by the Bureau of LaborStatistics and compiled by the USA Today:

JOBFEDERALPRIVATEDIFFERENCE

Broadcast Technician $90,310 $49,265 $41,045Civil Engineer $85,970 $76,184 $8,876Computer Specialist $45,830 $54,875 -$9,045Dental Assistant $36,170 $32,069 $4,101Financial Analyst $87,400 $81,232 $6,168Landscape Architects $80,830 $58,380 $22,450Machinist $51,530 $44,315 $7,215Paralegal $60,340 $48,890 $11,450Public Relations Mngr $132,410 $88,241 $44,169Secretary $44,500 $33,829 $10,671Surveyro $78,710 $67,336 $11,374

Fact 2:Public Sector Pensions are Bankrupting Many Governments

A recent survey by CareerBuilder found that “[m]ore than seven‐in‐ten (72%) of workers over the age of 60 who said they were putting off their retirement are doingso because they can’t afford to retire.” But while the private sector struggles, manypublic servants are spending their golden years very comfortably. Consider:•Four‐in‐Xive workers have lifetime pensions, compared with only one‐in‐Xivein the private sector• On average the public sector receives $13.65 worth of beneXits per each hourthey work compared to $8.02 dollars for private sector workers• Public sector workers can generally retire earlier ‐ usually age 55 ‐ and stillqualify for up to 90% of their income in pension• The average public pension plan is 35% underfundedThe public pension problem creates a huge economic burden on government. Forinstance, some towns in California such as Vallejo and Desert Hot Springs, have beenforced to Xile bankruptcy due to the inability to pay the cost of employee pensions.The cost of California pensions, have grown from $150 million per year to over $3billion per year in just the last decade ‐ a 2,000% increase.This is not a California speciXic problem. Orin Kramer, chairman of New Jersey’sINvestment Council, who has studied the problem, Xinds that the total unfundedliability of the nation’s public pension could be as large as $2 trillion. Some wouldsay even this huge Xigure underestimates the problem. Joshua Raugh, professor of Xinance at the Kellogg School of Management at Northwestern University says that “our calculation is that it’s more like $3 trillion underfunded.

Fact 3:Young Adults Will Be on the Hook for the Governments Excesses

Governments are refusing to face up to the economic realities of a huge bureaucracy.Given the data it appears that the federal government is paying well‐above that which is necessary to compete with the private sector for skilled labor. Moreover,despite the economic downturn which has caused a massive decrease in taxrevenue, the government keeps on hiring and spending. As Michael Barone recentlywrotefor the Washington Examiner,“While the private sector has lost 7 million jobs, the number of public‐sector jobs has risen. The number of federal government jobs has beenincreasing by 10,000 a month, and the percentage of federalemployees earning over $100,000 has jumped to 19 percent duringthe recession.”