Last Saturday, the New York Times published a sad story of another Californian town heading for bankruptcy under the weight of unaffordable pensions and salaries. The figures should astonish even the politically jaded. In a town where the median household income is less than $32,000 the average pay and benefits for a member of the police department exceeded $177,000.
Rich public employee compensation schemes create public tragedies. First, poor people suffer the injustice of overpaying people richer than themselves. Second, when the bubble bursts, a city can no longer afford needed services, leading to higher crime rates and worse educational results. Those with most to lose live in high crime areas and low performing school districts. So the poor take a double hit.
Often the reaction is to blame” greedy” public employees. But this sentiment is wholly inappropriate. These people were just operating rationally within a structure of bad laws. The real question is what can be done to prevent similar tragedies in the future. Here are three suggestions: