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Saturday, December 14, 2019

Governor Salary Should Be Tied to Yours

Why should not government workers have their compensation tied to the performance of the tax-paying sector of the economy?

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It is well known that politicians can be tone deaf to the lives and conditions under which their taxpayers live. Sometimes, though, their lack of insight takes ridiculous proportions. From the Casper Star Tribune:
Wyoming’s governor and the four other members of the executive branch have not gotten a pay raise in nearly 20 years. That could change this winter. On Friday, members of the Legislature’s Joint Appropriations Committee took up legislation proposing significant bumps in pay for the governor, secretary of state, treasurer and state auditor. Under the proposed legislation, the governor would see his pay raised by two-thirds, bumping his total salary to $175,000 annually, while the state auditor, treasurer, secretary of state and superintendent of public education would receive bumps in pay from $92,000 per year to $150,000 per year — a 63 percent increase. The pay raises would take place following the 2022 general election.
These increases are being discussed right when leading legislators tell us that the state's finances are so bad that they need a corporate income tax, a higher gasoline tax, that municipalities must be given more leeway to raise taxes to alleviate the state's responsibility for them...

While the governor and the other top functionaries in the executive branch will get salary bumps that we the people can only dream about, those who are supposed to pay the taxes to fund those salaries have seen their economic opportunities shrink in recent years. The total tax base in our state has declined by nine percent in fixed prices, in the past ten years.

To put these salary hikes in perspective, here are the employment numbers and average annual wages for the five most common occupations in Wyoming, as reported by the BLS Occupational Employment Statistics:

Office and Administrative Support
Employees: 34,250
Average wage: $37,250

Food Preparation and Serving
Employees: 25,310
Average wage: $24,920

Sales and related occupations
Employees: 23,920
Average wage: $35,410

Transportation
Employees: 22,070
Average wage: $46,110

Education, training and library occupations
Employees: 19,500
Average wage: $49,400

The average job in the private sector, outside of minerals, pays about $37,000 per year. This is the average annual wage for more than 90 percent of the private, tax-paying workforce in Wyoming. 

Let me stress that I believe our governor should be generously compensated. His job is tough with a lot of responsibilities. For sure, he wanted it, but if we assume that we elect the most competent candidate, we should also assume that this competent person is going to do a good job managing a multi-billion dollar corporation. Therefore, he also deserves to be well paid.

The problem here is that our legislators want to hand out these very large salary increases with one hand while taking more money from us with the other hand.

According to the Tribune, the Appropriations Committee appears to motivate these increases with the major hikes in salaries that Governor Mead secured for the government employees right beneath these top five positions:
The impetus for Friday’s conversations date back to a significant raise in salaries for executive branch employees seen during Gov. Matt Mead’s administration, in which many employees working beneath the state’s five elected officials were granted salaries far exceeding those of their bosses. 
I am sure we have no reason to doubt that these salary increases reflected major increases in the value added by these executive-branch employees. If they didn't, then two wrongs do not make a right. 

The Tribune again: 
If passed, the proposed legislation would authorize the first pay raise for the state’s top officials since 2002, when the Legislature overwhelmingly moved to raise executive salaries after an effort failed in 2001. However, three other efforts to raise executive pay over the years — including one in 2012 intended to balance salaries with the $126,000 annual salary earned by state Supreme Court judges — have failed to gain traction.
So the governor's salary has stood still for 17 years, and yet he currently makes more than three times what 90 percent of private-sector employees make. 

There is a better way to determine the compensation of our governor and the other four top positions in the executive branch - and the entire government workforce. Instead of handing out bigger salaries with one hand while taking more from taxpayers with the other, our lawmakers should tie government employee compensation to average compensation in the tax-paying private sector. 

I am well aware that many government employees have not had raises in several years. Unfortunately, that has been the life for many private-sector employees as well. Since the private sector pays the taxes that fund government, it is only fair that government employee compensation follows the ups and downs in the private sector. 

In fact, this tie would benefit both groups: since private-sector compensation varies closely with our state's GDP, it would mean that if the governor can work with the legislature on policies that promote private-sector growth, then he and everyone else on tax-paid payroll will make more money. If, on the other hand, they raise taxes and grow government, they make life harder for taxpayers and there will be less growth. The painful consequence will be a decline in government salaries and benefits.

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