One in three Greeks works for the government. Government employees enjoy higher wages, more munificent benefits, and earlier retirements than private sector employees. Civil servants can retire after 35 years of service at 80 percent of their highest salary and enjoy lavish health plans, vacations, and other perks. Because they are so numerous, and because Greece is highly centralized, public sector unions hardly have to negotiate. They simply vote in their preferred bosses. Some civil servants receive bonuses for using computers, others for arriving at work on time. Forestry workers get a bonus for outdoor work. All civil servants receive 14 yearly checks for 12 months' work. And it's impossible to fire them -- even for the grossest incompetence.
Public sector unions are growing in the U.S. More than 50 percent of all union members are now public employees who have negotiated sweet deals with local, state, and federal governments. As economic historian John Steele Gordon points out, "Federal workers now earn, in wages and benefits, about twice what their private-sector equivalents get paid. State workers often have Cadillac health plans and retirement benefits far above the private sector average: 80 percent of public-sector workers have pension benefits, only 50 percent in the private sector. Many can retire at age 50." While private employers were shedding jobs during the recession, state and local governments hired 110,000 new workers.
Obama's new spending will result in a 14.5 percent increase in the number of federal employees in just two years. And he has looked after union interests with particular zeal, whether at General Motors and Chrysler, or by funneling one-third of stimulus spending to state and local governments, or by repealing the rule that required unions to disclose their spending.
And in a corrupt feedback loop that may not be so very different after all from the Greek practice, public employee unions give generously to Democratic candidates, both in cash contributions and by manning phone banks, getting out the vote, and so on.
It's no coincidence that the states with the most powerful public sector unions -- New Jersey, California, and New York -- are facing the most severe budget crises.
Greece is in flames, but if you look around, you can smell the smoke here as well.
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