NCPA - National Center for Policy Analysis


January 29, 2010

Last month, the U.S. economy shed another 85,000 jobs.  It marked a miserable end to a calamitous year in which an estimated 4.2 million American jobs were liquidated, and unemployment rose to 10 percent. In addition, more than 920,000 "discouraged workers'' left the labor force entirely, having given up on finding work and therefore not included in official unemployment data. 

Meanwhile, millions of Americans who do have jobs have been compelled to work part-time or at reduced wages; many others have not seen a raise in years.  But not everyone is having a rotten recession, says columnist Jeff Jacoby.  

Since December 2007, when the current downturn began, the ranks of federal employees earning $100,000 and up has skyrocketed.  According to a recent analysis by USA Today: 

  • Federal workers making six-figure salaries -- not including overtime and bonuses -- jumped from 14 percent to 19 percent of civil servants during the recession's first 18 months'; the surge has been especially pronounced among the highest-paid employees.
  • At the Defense Department, for example, the number of civilian workers making $150,000 or more quintupled from 1,868 to 10,100.
  • At the recession's start, the Transportation Department was paying only one person a salary of $170,000; 18 months later, 1,690 employees were drawing paychecks that size. 

In Ohio, a joint reporting effort by the state's eight largest newspapers found that even in a time of severe budget cuts, one expense government leaders have not cut is pensions for their workers: 

  • The annual public pension tab in Ohio, currently $4.1 billion, is growing by around $700 million per year. Retirement incomes for the most experienced government employees top out at 88 percent of their active-duty pay.
  • Unlike most private-sector workers, whose retirement is driven by the strength of the stock market and 401(k) plans, government employees' pensions are guaranteed.'
  • Moreover, government retirees in Ohio enjoy taxpayer-provided health care, and in many cases can retire at 48.  

Ohio is hardly unique, says Jacoby.  A public-pension tsunami is beginning to inundate government budgets at every level.  As more and more of taxpayers' earnings are confiscated to fund outsize public-sector benefits, the backlash from the private sector will only grow angrier and more intense. 

Source: Jeff Jacoby, "Income angst?  Not for public employees," Boston Globe, January 27, 2010. 

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