With a government budget in massive, structural deficit, a frantic struggle is underway to find new sources of revenue. Notwithstanding an historic economic downturn, in recent years the public payroll has continued to grow, and efforts to make even modest reductions in staffing and benefits are met with fierce opposition from public employee unions.
Dover, February 2010? Sure.
Athens, Greece? Right again.
Greece invented democracy and Delaware can fairly be said to have helped perfect it as the first state in the world’s oldest democratic nation. But years of unchecked spending and bloated government workforces have now created another unfortunate and much less appealing connection between the two.
Greece’s national finances are in free fall and now pose a threat to the EU itself. Delaware’s budget woes stem in large part from the same fundamental issue: too many government employees with too few tax dollars to pay for them.
Katherine Kersten in the Minneapolis Star-Tribune observed:
Greece’s plight is due largely to the fact that one in three Greeks is employed by the government and is guaranteed lifetime employment. According to the New York Times, public wages and pension payments make up fully 51 percent of the country’s budget — a huge drag on the economy. Over the last decade, Greek public-sector workers’ pay has doubled and their numbers have exploded, thanks to union muscle.
The result? Greece is heading off a financial cliff. The country’s annual deficit is now almost 13 percent of GDP — four times greater than the European Union’s cap of 3 percent of GDP. This back-breaking debt has raised the specter of a Third World-style bailout from the European Union or IMF, or even the unthinkable: default.
You read that right. One. In. Three.
So it isn’t hard to imagine that many in Greece aren’t too eager to get on board with any new “austerity measures:”
Public sector workers in Greece clashed with police during a nationwide one-day strike on Wednesday to protest at government measures to try to tackle the country’s enormous budget deficit. Riot police fired tear gas at demonstrators in Athens after dustmen attempted to join other workers by driving their dustcarts through a police cordon.
Many schools were closed, flights into and out of the country were seriously disrupted and hospitals were operating an emergency-only service. The socialist government of George Papandreou – which has already faced down a three-week protest by farmers asking for more subsidies – has said it will have to cut pay and pensions as well as put up taxes. On Tuesday the Prime Minister announced plans to freeze public sector recruitment, raise the retirement age and put up petrol prices to raise more revenue.
Mr Papandreou has always been close to the unions, but they criticised his plans saying it was the lowest paid workers who would suffer while the wealthiest citizens would continue to evade income tax with impunity.
Today, 62,000 people in Delaware are employed by state, county or local government. That’s north of 14 percent of all those working. The second or third highest percentage in the country. Not Greece, perhaps, but the creeping effects of such an imbalance in public sector employment are increasingly apparent: a state legislature conflicted by its own double-dipping (the Senate’s top three Democrats all have a second paycheck thanks to the taxpayers) and beholden to the pressures of AFSCME et al, and public spending crowding out the private investment that is so badly needed.
As with our Mediterranean cousins, this is unsustainable, and, in the original Greek (“hypocrisy, deception…feigned ignorance”), ironic.