Public Sector Unions

A reader emails a pair of editorials from The Economist on public sector unions. Here’s a taste:

Politicians have repeatedly given in, usually sneakily—by swelling pensions, adding yet more holidays or dropping reforms, rather than by increasing pay. This time they have to fight because they are so short of money. But it is crucial that the war with the public-sector unions is won in the right way. For amid all the pain ahead sits a huge opportunity—to redesign government. That means focusing on productivity and improving services, not just cutting costs. (Indeed, in some cases it may entail paying good people more; one reason why Singapore has arguably the best civil service in the world is that it pays some of them more than $2m a year.)

The immediate battle will be over benefits, not pay. Here the issue is parity. Holidays are often absurdly generous, but the real issue is pensions. Too many state workers can retire in their mid-50s on close to full pay. America’s states have as much as $5 trillion in unfunded pension liabilities. Historic liabilities have to be honoured (and properly accounted for, rather than hidden off the government’s balance-sheet). But there is no excuse for continuing them. Sixty-five should be a minimum age for retirement for people who spend their lives in classrooms and offices; and new civil servants should be switched to defined-contribution pensions.

I’m torn on this issue. Throughout American history, civil service has been viewed as a low-prestige occupation and Americans have typically viewed the idea of a well-paid professionalized public sector with populist suspicion. That is why we do not have one.

In the private sector, the market determines pay; in the public sector, politics does.

So on the one hand, it makes sense to me that with public opinion leaning against them, civil servants would want to form unions to extract higher pay than voters want to give them, and shield themselves from cuts when budgets are tight.

On the other hand, the difficulty of firing unproductive workers or rewarding exceptional talent in the public sector should be deeply disturbing to anyone who wants to see more and better public services. There’s nothing progressive about keeping in place workers who perform badly. There’s nothing progressive about committing a larger and larger portion of the budget to paying for retirees’ consumption at the expense of doing more stuff.

The goal of civil service is not a welfare program for government employees – it is the provision of services that the market does not provide, or under-provides.

In order to do this well, the public sector needs to professionalize by more closely modeling its Human Resources practices on those in the private sector. One thing that should mean is taking the question of pay and benefits out of the arena of electoral politics, and handing it off to an HR administrator who will have fewer conflicting incentives in determining the true value created by employees.

What Do We Want From a Mayor?

What does a mayor do?

My understanding is that a mayor’s goal is to preside over a growing population, lower crime rates, rising test scores, and improved municipal services.

By all accounts, Bethlehem has experienced all of those conditions over the last decade. People are free to quibble on the details of specific decisions, but that’s beside the point. On the whole, most people would agree that Bethlehem’s progress in all of these areas has been on an upward trajectory over the last decade, and not a downward trajectory.

When I was a senior in high school, around 2001, I worked at the Green Cafe on 4th Street on Southside Bethlehem. Many of my friends and teachers were horrified at this because it was “the bad part of town.” Bums would come in and bother us, and one time Wendy Landiak (now of Balasia) got a pair of shoes stolen when she left them outside for 2 minutes.

Now everyone agrees that crime on Southside Bethlehem is on a downward trajectory, First Fridays there are a popular activity because of the many thriving independent businesses, and cool young women are writing in LV Style magazine about how it’s cool to live there.

Obviously there are many more improvements still to be made, but I think most people would say that Bethlehem is on a generally favorable, generally prosperous upward trajectory.

That’s why Sunday’s Muhlenberg poll showed 61% of voters rate John Callahan’s job performance between Fair and Excellent.

And it’s also why I think Charlie Dent is wasting his money trying to convince non-political junkies that Bethlehem is in bad shape. I expect that the image of Callahan walking down Bethlehem’s beautiful iconic Main Street will be vastly more politically effective than Dent’s efforts to call Bethlehem’ progress into doubt.

Harrisburg’s Fiscal Woes and the Case for Government Reform

Many of the stories I am reading about Harrisburg the city’s fiscal problems have suffered from underrating the importance of government structure in Pennsylvania as a contributing factor. Harrisburg is probably at least around stage 3 or 4 in the 5 Stages of Municipal Death. Chris Briem has a very good take on this:

What I don’t get, and what these Harrisburg stories mention, but don’t go into much at all, is that Harrisburg’s problems are not because of it’s own bad accounting in a sense. Harrisburg is being caught because of a guarantee it made on a loan that another Pennsylvania government altogether, the Harrisburg Authority, is defaulting on for a garbage incinerator. Beyond the irony in that, you have to wonder if the folks who worked on Harrisburg’s municipal budget even knew about their potential liability from that other loan when they were debating their own recent budgets. Public authorities were created mostly to create some independent (someone look up the definition of independent) loan authority distinct from municipal governments. Yet if Harrisburg (the city) is going to go down because of the finances of a public authority, what is the point of having the public authority in the first place?

Shouldn’t pick on Harrisburg too much. Realize that Dauphin County is itself caught up in this.

The bigger question for them is what other liabilities out there might catch them off guard in the future? What about for other municipalities? Either explicitly or implicitly, say for example the Pittsburgh Water and Sewer Authority fails completely, is the City of Pittsburgh off the hook for what costs that may incur?

Isn’t the real story in this just how screwed up local government is in Pennsylvania? Here you have one government about to fail because of another’s failure to keep up on a loan. It’s pretty obvious that all of these special authorities and districts obscures government transparency. Few places are as confused as Pennsylvania with nearly 4,900 distinct government entities of one form or another. It’s not just the large number of municipal governments in Pennsyvlania that sometimes gets talked about (2,562), but all the special districs and public authorities (at least 1,728 per count below, but I say there really are more) and don’t forget 515 school districts* each of which has substantial tax-funded budgets. Is there transparent open governance for all of them? Most of them? Any of them? How can the public even keep track of all the convoluted lines of authority, let alone their financial responsibilities, between all these different types of governement? As Harrisburg shows, even the elected officials can’t keep track…

Anyway. For reference here is what I see for the current structure of local government in Pennsylvania as of 2007.

County 66
Municipal 2,562
Special District 1,728

School District 515*
Source: US Census Bureau, Census of Governments

Which by the way adds up to 4,871, more than any other state in the nation.

The last point I bolded I think is the strongest argument for municipal consolidation. Nobody but political junkies has the time, or wants to make the time, to pay attention to all these politicians. Most families don’t have the money to hire lobbyists and policy analysts to pay very close attention to the legislative process and what it means for their bottom line. This is a function that local media should serve, but local media outlets all over the state apparently do not have enough money to pay reporters to pay very close attention to the legislative process, and they certainly don’t have the money to keep serious policy analysts on staff to explain complicated issues to their readers.

The only people who do have the money to pay lobbyists and policy analysts to pay very close attention to the legislative process and advocate for their interests full-time are primarily corporations, to a lesser extent unions, and a smattering of issue advocacy groups that appear to have zero effect on the legislative process.

There’s no need to insinuate a sinister motive to these people. It’s easy to see how this happens. This dynamic leads legislators to be very responsive to the interests of people who are calling them and meeting with them every day (lobbyists) and unresponsive to the interests of people who are not paying attention (people who are not political junkies).

Knowing this, some people still want to say “Too bad. Everyone should just be like me and take time every day to pay attention to politics,” or “We just have to elect politicians with more integrity.” Since not everyone is going to wake up tomorrow wanting to devote a vastly larger percentage of their free time to following politics, then we should change the structure of government to make it very easy for people to know who is responsible when things go wrong. Democracy works best when people are able to draw clear lines between election results and policy outcomes. The best way to do that is to consolidate municipalities and school districts at the County level.

PA Legislature Website Still Horrible

Scott Detrow reports on a new mobile website for the PA Legislature. It’s a nice enough gesture, but it’s not significantly more user-friendly than the horrible PA Senate website that looks like something I might have made on Geocities circa 1997. How hard would it be to spend a few thousand dollars to pay a good web designer to make an awesome user-friendly website?

Look how much better the New York State Senate website is. It looks like every advocacy website. You can get updates on issues you care about and there are all kinds of other cool features. There’s no reason any website should still look like the PA Senate website in 2010.

Can YOU Solve America’s Problems?

The Obama administration is rolling out a platform for X-Prize-style contests across the federal government, tapping the cognitive surplus of the American people by crowd-sourcing ideas to make government more efficient, transparent, and responsive:

The United States General Services Administration, or GSA, will run government-wide contests on a new prizes-for-solutions platform, in an attempt to spur efficiency while motivating the public to participate in government in a real, concrete way. New York startup ChallengePost beat out seven unnamed competitors for the right to power prize-based crowdsourcing contests for government agencies.

Every department of government will have access to the custom-built ChallengePost platform and a set of best practices for issuing challenges to the public, which will then discuss and hopefully solve a myriad of tangible problems, large and small, facing the country.

“President Obama has empowered the public to help solve some of the most difficult problems in government,” said David McClure, associate administrator for GSA’s Office of Citizen Services and Innovative Technologies in a statement. “The use of prizes and challenges spurs innovation and brings ideas to bear on some of our nation’s most pressing problems. By providing an online challenge and prizes platform government-wide, GSA is helping agencies promote and harness innovation to more effectively engage with the public.”

The public can submit problems to be solved and help judge solutions to the government’s challenges by lending or withholding support in the form of a click. Whichever entrants — be they citizens, or in some cases, contractors — devise the best solutions could receive cash prizes. In addition to reaching out to the citizenry with various campaigns, the GSA says it is “creating a contract vehicle to make it easier for agencies to access the best challenge products and services to identify and execute challenges.”