Paul J. Gessing
Carter Bundy of AFSCME recently urged the “likeable, bright guys” over at the “far-right” Rio Grande Foundation to “Drop the Political Rhetoric and Join the Debate” over how best to spur economic growth in New Mexico. While I share respect for Carter, I could not disagree more with his argument.
In fact, it is totally wrong to state that we believe that because the private sector has had a tough time, we should de-fund the public sector.
Bundy implicitly acknowledges that he knows better when he argues that we want “want fewer police, fewer corrections officers, fewer courts, fewer prosecutors, fewer 911 dispatchers, and more dangerous streets.” Actually, if New Mexico’s state and local governments focused primarily on these core functions of government and did them reasonably well and at a competitive price, there would be no argument at all.
The problem is, of course, that state and local governments are involved in every aspect of New Mexico’s economy. The fact that governments and their workers do not face the same economic realities as do their counterparts in the private sector has led us to do a great deal of work on the issue of government compensation and employment.
Private sector workers face numerous pressures to be more efficient and to upgrade their skills in order to remain productive as the economy around them changes. Private sector businesses and their workers must innovate to remain ahead of the competition, respond to the vagaries of the marketplace, and constantly adapt in an effort to remain relevant in a competitive economy.
If they fail to do this, the company will not survive and workers will be unemployable. This sounds cruel, but it is what pushes our society forward and it benefits us all in terms of improved living standards.
Public employees paid more than private counterparts
Governments and their workers don’t face these competitive pressures (there are no competing governments); rather their salaries are paid by taxpayers who don’t have a choice as to whether they pay or not (or who they “hire” to perform a government service). Rather than adapting to serve their customers, government workers often “adapt” to serve the whims of their political benefactors (those who control tax dollars).
Government workers, due to their large numbers and organizing power (Carter’s employer AFSCME being one of New Mexico’s most powerful), are able to use their political/lobbying influence for their own benefit, usually at the expense of taxpayers.
This has indeed taken place in New Mexico, where state and local government workers, using the political lobbying process, now receive compensation that is more than 10 percent higher than their private sector counterparts. This data is from a recent Rio Grande Foundation study “The Government Gravy Train,” which used data from 2008, a year when the private sector was still relatively strong.
With the private sector hemorrhaging jobs since then, it is likely the imbalance has only worsened.
An over-employment problem
Carter asked for “real solutions, not rhetoric,” so I’ll conclude with some concrete ideas for saving money that will benefit taxpayers, New Mexico’s economy, and those who utilize government services. First and foremost, as we at the Rio Grande Foundation have pointed out, New Mexico has substantially far more public-sector employees per private-sector job than just about any other state in the union.
And just to pre-empt Carter’s inevitable claim that large states require more government workers, New Mexico has the second-highest ratio of government workers in the nation while neighboring states of Texas (27th), Utah (33rd), Arizona (34th), and Colorado (30th) have far fewer government workers.
Far from being the only group in New Mexico questioning the need for so many workers, Governor Richardson’s own special committee on government efficiency, which met over the winter, pointed to the government over-employment problem. Through public records requests, we have learned that Lt. Governor Denish’s consultants also agree with us.
To modernize state government and grow the economy, we must correct this imbalance, stop the drain from the private economy, and put more resources and people to work generating wealth.
Ideas for saving money
So, what specifically can be done? There are dozens of government services that could likely be done – at a far lower cost – by private-sector workers. For one thing, city bus services could be contracted out. As upcoming Rio Grande Foundation speaker, transportation expert Randal O’Toole notes, Colorado law requires Denver to contract out half of its bus operations. In 2007, Denver spent $8.68 per vehicle mile on buses it operated, but paid private contractors only $4.60 per vehicle mile.
New Mexico should consider mandating the use of private contractors to achieve cost savings.
Services from solid waste and water to municipal golf courses and parks could be provided privately as well.
Education, both K-12 and higher-ed, is another area that is in obvious need of reform, with New Mexico schools graduating barely 50 percent of students and higher ed recognized as one of the most bloated areas of our state government. We would all see dramatic improvements in cost and quality if government policies funneled resources through consumers (parents and students) rather than funding bureaucracies from the top-down.
While government schools could remain a part of the mix, students and parents could choose the options that work best for them.
Lastly, there are a number of regulatory policies that have negative impacts on productivity, particularly in the area of construction. New Mexico’s prevailing wage law drives up costs by $45 million annually, while 22 states have experienced benefits from Right to Work legislation, which allows workers to choose – or not – whether to join a union instead of being forced into one as a condition of employment.
In fact, a net total of 185,000 tax filers moved from a forced-unionism state to a Right to Work state between 2007 and 2008 alone.
Efficiency improves our standard of living
The end benefit of all of these policies is that competitive markets, not monopolies, are more efficient. Efficiency, that is, doing something better and at a lower cost, is what improves our standard of living.
We at the Rio Grande Foundation have literally dozens of ideas for improving government efficiency that can be found on our Web site – riograndefoundation.org.
Far from being outside the political debate, as Bundy asserts, we are slowly moving the debate toward our viewpoint (perhaps that spurred Carter’s attack in the first place). We are not against government workers or even union workers, but we all benefit from a competitive marketplace. Government workers should not be exempted.
Gessing is the president of New Mexico’s Rio Grande Foundation, an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.