Yet another travesty is unfolding before our eyes in these United States of America. While tens of millions of Americans continue to struggle through difficult economic conditions, with hundreds of thousands more losing their jobs every month, tens of thousands more losing their homes and their businesses, and millions more facing salary cuts and pay freezes, government employees are prospering and getting rewarded financially more than ever.
As the economy struggles, incomes fall, and business bankruptcies and mortgage default rates remain at all time highs, the federal government spending is booming and its employees are enjoying increased hiring and higher salaries.
According to USA Today the number of federal workers earning six-figure salaries has skyrocketed during our current recession. As a result, on average, federal workers now earn $30,000 more per year than their private sector counterparts. The paper’s analysis into the federal salary data reveals some disturbing facts:
- Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.
- The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.
- When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.
- The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.
- The growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector.
By contrast, the economic situation for millions of Americans has been very bleak and continues to worsen. The problems in the private sector are indicative of the many difficulties and dangers that businesses and individuals still face as they grapple with the realities of a weakened economy and a devastated job market; a situation made worse by constant government interference, bailouts of failed corporations, increasing levels of regulation, continuing high taxation, and run-away government spending. Since the recession began unemployment has risen dramatically, real wages have stagnated, and business failures and closures have increased.
High National Unemployment Rate
Approximately 8.4 million jobs have been lost in the private sector since the start of this recession. The nationwide unemployment rate has hovered around 10% since the fall of 2009. The latest minor correction to 9.7% is just a drop in the bucket when compared to the 4-5% rates enjoyed during the 1995-2008 period. Some estimates place the real rate of unemployment as high as 17.3% when considering the workers who have simply given up their job searches or have resigned themselves to going on social assistance.
Furthermore, the length of time Americans stay on unemployment has risen to a high of 29.1 weeks. According to Miller Tabak:
“In sum, fewer people are working, more Americans are dropping out of the labor pool and those who are working are working fewer hours: Average hourly earnings up just 2.2% vs. a year ago in December, lowest rate since 2004 and vs. an average gain of 3.3% over the prior decade.”
Household Bankruptcies Increasing
In December of last year, the National Bankruptcy Research Center (BNKRC), reported that 1.4 million households filed for bankruptcy in 2009, a 32% increase over the total filing in 2008. The research center reported that the 2009 filings were “the highest in any year since 2005″, the last year individuals could take advantage of more lenient bankruptcy laws. The report further details that Chapter 7 (liquidation) bankruptcies have increased by more than 42% as compared with 2008, while Chapter 13 (rehabilitation) filings have increased by 12% over last year. (BNKRC tracks bankruptcy data from November to November of each year.)
According to RealtyTrac, the online marketer of foreclosed homes, almost 3 million homeowners (that’s one in every 45 households across the U.S.) received at least one foreclosure filing during 2009. The 2,824,674 properties that were in default in 2009 represent a 21% increase over the 2.4 million home foreclosures in 2008, and more than double the 2007 total.
Sky-High State Unemployment Rates
On January 22, 2010, the government released data that painted a depressing picture of the job market across the country, with unemployment rates rising across 43 states as of December 2009. Michigan’s 14.6% unemployment rate remains the highest in the nation, followed by Nevada at 13%, Rhode Island at 12.9%, and South Carolina at 12.4%. California, the state with an economy that used to rank seventh in the world, still has the fifth-highest unemployment rate in the country with a rate of 12.4%.
Business Bankruptcies Remain High
The latest data from Automated Access to Court Electronic Records (AACER), a database of U.S. bankruptcy statistics used by lenders and attorneys, indicates that U.S. business bankruptcy filings rose 7% in January 2010 from a year ago. The sluggish economy has continued to “hurt sales and hindered businesses’ ability to refinance debt obligations.” Mike Bickford, president of AACER, observed that the numbers “indicate that there’s going to be more filings in 2010 than in 2009.” He further warned that despite the slight improvement of the economy in the last quarter of 2009, bankruptcy filings will not slow significantly anytime soon. “You don’t see a recovering economy in bankruptcy numbers until 12 to 18 months after the economy has actually begun to recover,” he said.
More Civilian Government Employees Hired
Meanwhile, the bloated and massive government sector continues to grow at exponential rates with no signs of slowing down. The Washington Times observes: “The era of big government has returned with a vengeance, in the form of the largest federal work force in modern history.” With the full support and blessing of the Obama administration, the ranks of civilian government employees will reach approximately 2.13 million (including approximately 700,000 Postal Service workers) this year, the highest number in almost two decades. The 2.13 million total does not include the 720,000 Department of Defense employees and all members of our military. The civilian side of government hiring alone will increase by 153,000 workers in fiscal 2010.
Massive Government Spending Increases and Federal Deficits
Obama’s massive $3.72 trillion budget for 2010 and $3.83 trillion budget for 2011, with structural deficits of $1.6 trillion for 2010 and $1.3 trillion for 2011, and a planned $8.5 trillion deficit total over the next 10 years, on top of the $1.75 trillion deficit for 2009, is a slap in the face of all taxpayers. The current budget includes a 5.7% increase in spending over last year. A further 3% increase is planned for 2011. Congressional Democrats, with the full support of the White House, show no indication of fiscal responsibility and discipline, ability to control government waste and out-of-control growth, or willingness to face reality.
While ordinary Americans and businesses suffer and struggle to make ends meet, our government is rapidly wasting our tax dollars on pet projects and special interest groups (especially unions, failed companies, failed banks, etc.), protecting its civilian employees, and lavishing money on the privileged few.
As we balance our checkbooks and pinch pennies to keep a roof over our heads and stay out of debt, the politicians in Washington rack up massive deficits and rapidly shove America towards hyperinflation, bankruptcy, or fiscal insolvency.
While we lose our jobs and close our businesses, the career politicians in our nation’s capitol keep hiring more bureaucrats and giving them first-rate salaries, generous benefits, pay raises, and bonuses.
While we scale back on all our purchases, buy food and clothes from Walmart, cancel travel plans, and buy smaller cars to afford the rising cost of gas, Nancy Pelosi flies around the country in private Air Force jets surrounded by friends and family members, racking up $2.1 million in unnecessary travel expenses, including $101,429.14 tabs for booze and food, all paid with our tax dollars.
While Washington fiddles, the American heartland burns!