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Neil H. Buchanan

The Public's Distrust of Public Employees: An Old Problem Has Become Much Worse in the Great Recession


Monday, October 25, 2010

Growing up in the Midwest, I absorbed the lore about unresponsive bureaucrats in Washington -- those faceless, uncaring people who supposedly do nothing but hinder "real people" from pursuing happiness in their daily lives. When, however, I actually spent some time in Washington over the years, I discovered quite a different reality. Other than a year as a federal judicial clerk, I have never worked for the federal government (my only time on public payrolls has involved short stints teaching in state-funded universities). However, being both an economist and a law professor has meant that I have had a great deal of contact with public sector employees. I have found that they tend overwhelmingly to be hard-working, conscientious people. Most of the public employees with whom I have dealt have, in fact, bent over backward to try to be helpful.

Obviously, there will be examples of bad behavior, wherever one looks in the world. While we have all, I suspect, had irritating experiences getting drivers' licenses (a non-federal government duty), we have most likely had bad experiences with private- sector bureaucrats as well. Certainly, no one smiles when they tell stories about dealing with the bureaucrats who run their private health-insurance plans.

Even so, the drumbeat against public employees has taken a dangerous turn in the last few years, with ugly threats (and some deadly attacks) against government workers becoming common. In this column, I will analyze the general phenomenon of vilifying public workers. I will then show that public employees -- beyond their specific duties -- serve an important role in stabilizing the economy. Therefore, this scapegoating of public servants must stop, because the stakes have simply become too high.

Public Disenchantment with Government Workers as a General Populist Theme

Because a large number of government functions involve encouraging (or requiring) people to do some things, while discouraging (or prohibiting) people from doing other things, the public's relationship with the writers and enforcers of government rules will inevitably be complicated, at best. We want safe streets and highways, but we do not like it when we are cited for traffic violations. We want clean air, but we are annoyed when a city official tells us that we cannot burn "just a few things" in our back yards. We want fair treatment in our daily interactions, but we complain when public courts require due process for both sides of a dispute when we feel one side is clearly right.

This public schizophrenia -- approving of (or even demanding) the things that government agencies are created to do, while disliking the reality of carrying out those public policies -- has led to a long line of politicians, pundits, and even comedians who find a ready audience for attacks on the public work force. We are told that there are too many government workers, and that they are unproductive, rude, and overpaid. Certain agencies, such as the Internal Revenue Service, come in for particularly harsh treatment. The storyline, in any case, is of a public sector gone haywire.

Where there is public unrest, there are politicians ready to exploit those emotions. One of the Clinton Administration's major initiatives, for example, was to reduce the size of the federal workforce. A supposed bragging point that Administration spokespeople repeated endlessly, in fact, was that the federal workforce had been reduced to its smallest size (relative to the population) since the Eisenhower Administration. There was no explanation -- because the Administration apparently felt no need to explain -- as to who had actually been eliminated from the federal payroll. The unspoken assumption was that there simply must have been a bunch of lazy, unproductive, duplicative workers in federal agencies, and the Clinton team had efficiently found them and told them to get "real jobs."

Again, there is doubtless some truth to some of these claims of public-sector inefficiency. Every workplace, public and private, can be reorganized in ways that might result in cost savings, even if those savings are ephemeral and ultimately damaging. And if the cost savings can be stated dramatically, then the long-term costs or tradeoffs involved in any change can be conveniently ignored.

Other changes can be more salutary. The most valuable aspect of the Clinton Administration's anti-government efforts was Vice President Gore's "Reinventing Government" initiative. Gore demonstrated that government agencies can be made more customer-friendly simply by improving management techniques. Twenty years ago, for example, the Post Office was the poster child for anti-government ideologues. Today, despite continued under-funding, most post offices now offer multiple services and products, and postal workers no longer tell people, for example, to go elsewhere to get the right kind of packaging.

Even state departments of motor vehicles demonstrate that a citizen's experience is mostly dependent on the nature of the management of the particular agency at issue. Because I have lived in many different states, I have dealt with DMVs on a fairly regular basis. Some states have taken the time, money, and effort to make the process work smoothly for their citizens. Some other states have, unfortunately, continued to allow their DMVs to be a Kafkaesque nightmare.

The key point, however, is that the public's interactions with public agencies can be -- and have been -- improved by smart management.

Changing Who Counts as a Government Employee: Reducing Accountability and Benefits

In the context of general public unhappiness about the size of government, the administration of President George W. Bush pushed the prior Clintonian strategies to shrink the public sector much further. Anything that could be contracted out to private companies, it seemed, was on the block during the Bush years. This strategy, however, merely meant that some activities that had traditionally been carried out by public employees were taken over by people who were private employees of companies that received all of their money from the government.

Why engage in this shell game? First, it makes it possible to pretend to the public that government is smaller than it really is. Second, it allows public employees to be replaced by private employees with lower wages and fewer employment protections. And third, it allows the government to sometimes avoid legal responsibility for the actions of its agents.

The Troubling Role of Privatization in Wartime

The most obvious area in which the Bush Administration pursued this privatization strategy was in the Iraq and Afghanistan wars. By contracting out duties that were formerly performed by government employees -- even core military functions like armed security -- the Administration was able to deceive the public about the size of the U.S. presence in the war zones. With troop counts being the preferred metric for describing whether the U.S. is building up or drawing down, it was expedient to reduce troop counts artificially by inflating the nominally-private employment numbers.

More tragically, the result of such privatization efforts was to put deadly force in the hands of untrained and unaccountable non-soldiers. Just this week, news reports have indicated that the government is still having great difficulty prosecuting even the most egregious private-sector violators of public safety.

In the non-military area, the urge to privatize even reached the point where the Bush Administration farmed out tax collection. This effort was not only a serious threat to the security of citizens' most sensitive personal information, but it turned out to be shockingly expensive: Private collection cost several dollars to collect each dollar of unpaid taxes; it had cost only a few cents when it had proceeded through normal IRS procedures. Thankfully, this program was discontinued shortly after the 2006 mid-term elections.

Efforts to satisfy the public's supposed desire to shrink government, therefore, not only caused serious unintended effects, but were also self-defeating on their own terms. That has not, however, stopped anti-government extremists from continuing to blame public employees for every problem under the sun.

Scapegoats During a Crisis: The Dangerous Turn in the Political Mood Against Public Employees

The general public antipathy toward government is, as noted, a constant in this country. During an economic crisis, however, the mood can turn from general disdain to ugly scapegoating. As I described in a FindLaw column this past Spring, severe economic pain creates wounds that demagogues happily exploit for short-term political gain. The results can be disastrous, with would-be Father Coughlins and Huey Longs casting any disfavored group as the cause of the woes of "real Americans."

This scapegoating has become increasingly virulent in the last two years, with rhetorical attacks on immigrants, Muslims, and gays becoming an ugly staple of the speeches and remarks of a large number of political candidates and their enablers. Less prominently, but quite persistently, public employees have been the subject of verbal attacks by those who would give the public an easy target for their anger. This rhetoric has already played a prominent role in attacks on government agencies and the deaths of public employees; yet those who have stoked this explosive hatred have shown no remorse.

As a general matter, scapegoating government workers involves describing them as overpaid, especially with respect to their non-salary benefits. It has long been the case that people who are weighing offers from both public and private employers have traded off salary for benefits. (Examples include lawyers choosing between working for a corporate law firm or for the Justice Department, accountants choosing between private-sector work or the IRS, or economists choosing between the Treasury Department or corporate work). The standard view was that no one gets rich working for the government, but working conditions in government jobs are generally good, and the benefits (especially health benefits) are better than those that are available almost anywhere else.

During the Great Recession, however, both salaries and benefits in private companies have fallen precipitously. Because government employees' salaries and benefits have not been cut (or, at least, not as severely as those of many private employees), the comparison between government and private employees now can be made to look disproportionate. That will surely change after the economy finally recovers, but for now, those who wish to attack government employees can stoke the public's anger by painting government employees as coddled and overfed.

This is an especially damaging argument, because the public in general is actually helped by the employment standards set by the government. Public benefits often set a benchmark against which private employees can compare their (increasingly meager) benefits packages, putting at least some pressure on private employers to mitigate their cuts.

Moreover, cutting public employees' salaries and benefits in order to force them to "share the pain" would perversely cause the pain for everyone else to increase, as reductions in public workers' pay would trickle down into the already-weak economy, causing still more private-sector workers to lose their jobs or suffer further reductions in salary and benefits.

Are Public Employees to Blame for the Lack of Public Investment? Definitely Not

Perhaps the most bizarre variation of the long-standing vilification of government workers is the recent claim that the supposedly excessive compensation of public employees has caused governments at all levels to be unable to engage in long-term public investments. This argument, for example, showed up in this recent op-ed by David Brooks in The New York Times. Brooks cherry-picked a few scary-sounding numbers regarding public employees' pay, leading him to conclude that we really could engage in long-term investments, if only public-sector unions were not making it too expensive to do so.

This argument is absurd. The costs of public investment are simply not a barrier to engaging in projects with long-term payoffs. Indeed, as I recently noted in a FindLaw column, there are plenty of public investments that -- even at costs calculated to include current wages and benefits -- have sky-high rates of return. Moreover, this is the best environment possible in which to engage in such public investments, precisely because we have so many idled workers who are available to work on such projects (and whose salaries would, when spent, stimulate the private economy further).

Now is also the best time to engage in such investments because, notwithstanding any labor costs, the costs of borrowing by the federal government have never been lower. With ten-year Treasury securities paying only about 2.5% in interest, government borrowing is a historic bargain. With high-return projects and the low costs of borrowing, any rational manager would view this as a very good time to borrow and invest -- no matter what one might say about public-sector wages and benefits.

In sum, the continued economic slump is causing unfortunate and unjustified -- but very predictable -- anger toward easy political targets. Public employees are prominent on the list of scapegoats. Acting on that anger is dangerous to those public employees themselves, and it is harmful to the country as a whole. The economy would be weaker, not stronger, if we listened to those who attack our public servants.

Neil H. Buchanan, J.D. Ph. D. (economics), is a Visiting Scholar at Cornell Law School, an Associate Professor at The George Washington University Law School, and a former economics professor.

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