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The Divided Middle Class


By John Bebow - September 28, 2007

Meet two Drakes with very different takes...

Barb Drake runs "Sleezy Barb Horsewear" in St. Johns. She thinks public sector employees make too much money and don't deserve their gold standard benefits packages.

Robert Drake is a supervisor for the Welfare Debt Unit in the Michigan Department of Human Services in Lansing. He's tired of being targeted by the tax-cut crowd that doesn't appreciate sacrifices he and other public employees have already made.

Barb and Robert wrote to the Center within 90 minutes of each other this week to share their beefs about the state budget mess. Their polar-opposite views illustrate what we see as a widening rift between public and private sector workers. As a high-profile Michigan politician noted in yet another email to us this week, this is a skirmish that could grow into a civil war among different segments of the middle class.

Read Barb and Robert's views below and then ask yourself... Where's the middle ground between these two perspectives?

BARB'S TAKE...

What about all those institutions that get State money (yours and my tax dollars) and are accountable to no one for their wage and benefit packages. For example, the universities...their wage and benefit packages are way out of line with the national average; the public school employees... their wage and benefit packages are way out of line with the national average; the city and county employees that get revenue sharing...their wage and benefit packages are way out of line with the national avaerage. You need to compare apples with apples, Phil. The State employs 50,000 people so you need to compare that with a private sector company that employs 50,000 people and guess what??? State employee benefits and wages are WAY below a private sector business of the same size. Compare a full-time university job with a state employee job and the university job is paid more and has better benefits than the state employee. How about the Legislature giving up some of their perks...like a PENSION for
only 6 years of work!!!!! What private sector gives a pension and lifetime health insurance for only 6 years of work!

ROBERT'S TAKE...

How is it that under the Engler regime, State employees pay raises were held in check during the supposedly "good times"? (Ah, the 90's....) And now that things have gone south, and nobody over in the Romney building has the stones to do anything without scurrying back into a caucus room for cover, it's time again to blame the civil servants for the mess we're in.

Funny how, as employees of the State, we're forbidden from striking, as it would potentially disrupt the heath, safety and well-being of our citizenry. But those Capitol clowns can effectively do the same thing. They call it negotiating, or so they would have us believe, with just a hint of partisan bickering thrown in for flavor.

Benchmark my job and you'll find accountants in the private sector with my knowledge and years of experience are paid substantially more. Benefits were part of the negotiating strategy by the Office of State Employer and unions to compromise contracts in lieu of pay raises years ago. If you put things in proper perspective, you would no doubt sing a slightly different tune.

And yes, I'm wasting valuable State time and resources responding to you, and I'm not even on break! Tsk Tsk.

Have a nice day. I'm going bow hunting.

(Editor's Note: But first, Robert shot a couple more arrows in this follow-up email)...

I worked private sector for 18 years (insurance adjuster), and in that particular line of work, every day was a risk of sorts (no pun intended!). It was not unusual for new management blood to enter in and "change the way we do business". That resulted in unfair firings, demotions, transfers, etc.,- all unchecked and uncontested during that time. As a seasoned adjuster, I was often at risk as my salary rose and management looked for ways to streamline costs.

Should public employees suffer in the same fashion, even though they are public servants, and not funded by profit-based free enterprise, openly competitive businesses? And conversely shouldn't we then show economic gain when private sector times are good and profits are up?

Here's an excerpt from a recent email I received as posted in the Freep, unverified, but helps further my point just the same:

"For the record. The 2% raise that state employees will receive was part of a contract that was negotiated 4 years ago. State employees aren't demanding it, they state already agreed to it. The Legislature and the Governor are more than welcome to stop it. It takes a 2/3 vote in both houses and a signature by the Governor to void the contract.

Each state employee has two designations. Their position and their level. Position is what specific job they do. Their level is similar to how rank works in the military. It is your level that determines a state employee's wage. Each level has a maximum wage cap. Every year spent at that level gives that employee a gradual raise in their wage until they reach that maximum cap for their level (this typically takes about 5 years). After that, the only way for that employee to receive a pay raise is through union contract negotiated raises (the 2% raise) or through promotion/re-allocation.

Some employees who have risen as far as they can without becoming part of management have been at the same level for 15 years. This means that they hit the maximum cap 10 years ago. Without those union negotiated raises they wouldn't have received a raise in a decade. How much buying power would they have lost due to inflation in that span of time? Think how much the cost of living has gone up since 1997. To give you a "subtle" reminder, in 1997, it wasn't uncommon to be still able to buy gas for less than $1 a gallon (I remember filling up once in Georgia and paying 79 cents/gallon).

Still, in spite of the 2% raises, state employees, when factoring in inflation, make less today than they did 20 years ago. There have been MANY years when they received no cost of living raise while inflation increased. They are also doing more work than 20 years ago because the number of state employees has shrunk since that time so the numbers that remain have had to take on a bigger load. So to recap, state employees are doing MORE work for LESS money...just like everybody else.

Lastly, to keep this going, state employees, as far as union employees go, have already given up a lot of their benefits with little complaint. State employees have been off the pension system for 10 years now. The only people still on that system are retirees and employees who currently have 20 years or more of service. The rest have a 401k retirement program. State employees also have a co-pay on their healthcare. That's the two biggies there. Free healthcare and pensions. State employees have already given those up. Much faster than even some in private sector have.


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