Don't Freeze Federal Pay. Cut It.

[Recursion]

http://www.slate.com/id/2276189/

Annie Lowrey on Slate:

On Monday morning, President Barack Obama proposed a two-year pay freeze for federal workers, a measure that would save the government $2 billion in the 2011 fiscal year and $60 billion over the next 10 years. The proposal, which would require congressional approval to become law, would cancel this year's 1.4 percent pay increase for the country's 2.1 million civilian federal workers and prevent any pay bumps next year, as well. (Uniformed military personnel would be exempt.)

...

Economists agree that during recessionary times, it would be better to have more workers earning less rather than fewer workers earning more. But employers tend to fire workers rather than cut wages, when their bottom lines are under duress.

...

In the last two years, faced with extraordinary budget pressures, businesses and local governments have increasingly turned to wage cuts and freezes—not just to improve their bottom lines, but to keep workers on payroll. Cops in Atlantic City, N.J., teachers on Long Island, N.Y., and firefighters in Phoenix, Ariz., to name just a few, all agreed to slash their own salaries to help save their co-workers. Indeed, a recent study by the National League of Cities found that more than half of U.S. cities have imposed pay cuts or pay freezes this year, with one--quarter revising union contracts to lower pay. Private employers—normally loath to cut compensation, as they would rather fire a few workers than anger a whole lot of them—have turned to salary cuts as well.

Other countries have implemented such controversial, if low-cost, ways to help bolster employment, to great effect. Most notably, Germany has held down its unemployment rate through the recession by using a variety of wage-cutting and job-sharing techniques. The most successful program is called "Kurzarbeit," or "short work." Employees work fewer hours, with government making up the difference if they lose more than 10 percent of their compensation. In turn, employers keep more workers on the books. The benefits have proved massive. The U.S. unemployment rate is 9.6 percent and Germany's is 7 percent, though, GDP-wise, the German recession was worse.

Though what she seems to actually be saying is that the gov't should fund the private sector to reduce workers' hours rather than laying people off. I'm not sure where that connects with a Federal pay cut except as a suggestion of how to pay for that.

[hedgehog]

1. Far better if the Federal government stepped in to help

states and municipalities through tough times. Wage cuts, however distributed, only increase the pressure toward recession/depression.

[Recursion]

2. It also alienates voters

There's a lot of near-crazy resentment among people in the private sector against people in the public sector. People see government employees' pay and benefits increasing while their private sector analogues are stagnant or falling. Which leads to a sentiment that the government might be less eager to let companies continue to wring the last pennies out of workers if its employees were sharing in some of the hardship.

[SidDithers]

3. K&R...

you should cross-post this into GD, where it will get more visibility.

Sid

[Tuesday Afternoon]

4. Economists agree

:rofl:

gotta stick together, don't they. wonder how much they are paid to spew this crap.

[Dr.Phool]

5. Unrec

'cause Sid didn't.

They're coming up with EVERY solution they can find to keep from raising taxes on the richest.

Start cutting people's paychecks, you'll start finding people who can no longer make ends meet. More foreclosures, less spending.

Several months ago, when Republicans proposed this shit, Democrats blasted the idea. Rightly so.

Now, a "Democrat" proposes it, and it's the greatest idea since peanut butter?

Sheesh, this guy has a classified playbook on how to become a failed, one term President. Alienate, and piss off all of the people who voted for you.
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Edit to add link:
http://tpmdc.talkingpointsmemo.com/2010/11/obamas-federal-worker-pay-freeze.php?ref=fpblg


Obama's Federal Worker Pay Freeze Was Blasted By Democrats Months Ago

President Obama proposed a two year freeze on federal employee compensation today, just ahead of a Tuesday post-election meeting with the GOP leaders. The proposal was originally put forward by Republicans in recent months -- and slammed by Democrats.

The move is reminiscent of Obama's call for a freeze on non-defense discretionary spending in the days after Sen. Scott Brown (R-MA) won deceased Sen. Ted Kennedy's Senate seat in a special election earlier this year. The gesture resulted in no meaningful counter-gesture from the GOP and the administration's natural allies questioned the move. It's likely to be no different today.

In recent months, Democrats have attacked Republicans for proposing federal pay and hiring freezes, and experts have derided the idea of attacking massive budget deficits with small-fry initiatives like this one.

On the Senate floor in June, now-retired Sen. Ted Kaufman (D-DE) whacked a Republican amendment that would have frozen federal pay as an "assault" against "those who choose to serve."

(snip)

[littlewolf]

6. start with congresses .. nt

[OHdem10]

7. The Republicans when they take over the House in Jan. will

move to cut pay and cut the workforce. They have
long been screaming about Govt. workers earning more
than public sector.

I put this out there just so people are not surprised
later.

[Tuesday Afternoon]

9. I think you mean private sector ...

right? :shrug:

[howaboutme]

8. I'm all for shared sacrifice

and it needs to start with Congress and government.

And it also needs major sacrifice from those who gained the most over the last 30 years such as Hollywood, Sports, Wall Street and the super rich. For them the marginal tax rate needs to return to >70% as it was when the USA was strongest economically.

Hedge fund managers need to pay income tax rates on carried interest.

Government at all levels needs to cut wages so that overall employment remains and so budgets can be cut and balanced.

Every bit of corporate pork needs eliminated, such as oil depletion, factory farm subsidies, economic development special incentives.

Defense dollars and foreign aid to countries such as Israel and Egypt needs eliminated and that should be cut before one American citizen sacrifices.

Lastly I have no freaking idea why the government persists in paying out billions in unemployment benefits without requiring something productive in return. Where are the CCC camps etc that built parks and things that are still serving us.

Social Security recipients have sacrificed by giving up COLA inceases.