Monday, May 09, 2005

My iron law of state employee wages 

Last week Mark Yost, associate editor of the Pioneer Press and wingnut du jour, wrote a column that included this line that stuck in the craw of state employees everywhere.
State offices � particularly licensing bureaus � seem to attract people who do little work, are slow about it when they do, nasty about it when you don't kiss their pinky ring, and seem to never go away.
Mitch notes that AFSCME, the public employee union, is not at all amused.

Noted in advance: not all state workers are indolent martinets. But neither Mark Yost or I are the first to observe that state and government employ seems to draw a lot of:

  • people who thrive on lording petty authority over "customers", from clerks at state offices to the agents of county Child Support offices
  • people whose vocational goal is to have a secure grip on the same chair for an entire career, no matter what
SCSU is of course a state institution, and so I am also a state employee. I don't particularly mind Yost's comments, though I can say that among the state employees he might see most around here, like our academic office managers, he would behold little of this behavior. With college students you have what Gordon Tullock called "the discipline of continuous dealings," wherein repeated interaction induces more cooperation. I don't observe much "lording" (unless it's certain faculty who want to lord the bitch goddess diversity over some unsuspecting white male student-writer at the campus newspaper.) One of the issues of going to licensing bureaus is that you are highly unlikely to see that person ever again, so there's little chance that if they're rude to you that it will harm them later on. But, as James Suriowecki points out in one chapter of The Wisdom of Crowds, there are many other times where we act cooperatively with perfect strangers with whom we have no expectation of meeting again, such as in ultimatum games. (Quick nod to my colleague and reader Phil Grossman, who has done several of these experiments, for example looking at gender differences.)

So why do we have less-than-pleasant experiences with state employees? I think Mitch may have hit the target with the second bullet. (No slam intended to his marksmanship.) AFSCME as a union creates a wage schedule that builds in automatic raises each year -- even when a contract is negotiated and announced to "no increase in wages", workers will still get a step on a salary ladder for experience. Usually, increases in experience are associated with increases in productivity, but one would be hard-pressed to find productivity increases in AFSCME workers, and certainly not to the extent that they are in the private sector.

As a result, workers in government jobs -- in particular those working in offices -- have increasing unit labor costs. These are frozen in place by the state union contracts. Since their unit costs are high, these workers find it difficult to get employment in the private sector for a higher wage. It is that absence of private market alternatives that leads to their long tenures that Mitch observes. The person taking money for your car's tabs may make $30,000. Think simply what are the private market alternatives for this person and what do those jobs pay?

Most workers have two evaluation processes: that to keep the job they have; and the process that allows them job mobility. When mobility is diminished, the extra motivation to do well on a job is lost. I think this explains the quality of service both in state offices and most of Europe, where mobility is also poor.