We Could Have Saved New York

...And the government has become so topheavy that, for example, 52 per cent of the employees of the Department of Transportation are making over $20,000 a year...

...This year the higher education lobby was one of a handful with enough strength to overcome a presidential veto...

...They keep on demanding more and the ‘growing voting power of their members makes their demands .increasingly irresistible...

...They also receive annual increases, again without regard to merit, on the basis of a standard of comparability with private business that manages to exclude all but the highest paying 24 per cent of private business...

...Now’s the time for responsible liberals and conservatives to revive it...

...is doing even better than New York...

...But there is also the issue of fairness to the American taxpayer, who is now supporting a vast array of income supplement programs-social security, railroad retirement, unemployment assjstance, welfare, veterans’ benefits, etc.-to the tune of $147.6 billion per year...

...Salaries and Pensions I ” The salaries and pensions of its present and former employees constitute tlje biggest drain on the treasury of Ney York City...

...The response was immediate...

...The basic guarantee could be raised to $4,500 and the program would still cost only $30 billion...

...Two years ago Mike Causey of The Washington Post came up with some of the planning-analyst type jobs at the U. S. Postal Service and their salaries (which.of course have risen a couple of times since): Manager of Creative Services $25,183 to $33,493 Social Priorities Specialist ‘ $18,634 to $24,783 Schemes Routing ’ Specialist $16,872 to $22,440 Fringe Benefits Specialist $16,643 to $24,783 Suggestions Award Adniinistrator .$22,761 to $30,280 The demands on the discrimination of the last-named official are suggested by another gem Causey dug up about the “incentive awards” program, under which millions of dollars are spent each year to give cash grants to employees who presumably have done .especially fine ‘jobs...

...One risks unfair, uninformed criticism...

...First we would have transferred the cost of higher education from the public to the student...

...Causey found that the Office of the Secretary of the Air Force gave out awards to 156 of its 276 employees...

...As long ago as 1959, Wallace Sayre and Herb.ert Xaufman, in Governing New York, wrote this about the tendenGies of leaders 6f groups of civil servants : ’ “Their Strongest ’drives are toward higher salaries and wages and toward the other elements of the personnel system which enhance tenure protection, limit competition for advancement, and resist the intervention of other participants .” When the pressure is for raises for all civil servants, the result is usually five- or ten-percent increases across the board, which means that, while the clerk at the bottom may get a needed and deserved $300, the planning analyst who does nothing but read the paper all day will get $3,000...

...Many of these programs overlap...

...Certainly people nearing retirement who have counted on making a comfortable package out of social security and other income should not at this late date have the rug pulled out from under them...

...The result is that federal employees, according to the Advisory Commission on Intergovernmental Relations, now make 46 per cent inore than workers in private industry...

...Fair enough...

...The military system had an unfunded liability of about twice that amount...

...Federal funding of higher education is consuming a steadily increasing share of the national budget...

...Your motivation declines...

...Lionel S. Lewis, in his new book, Scaling the Ivory Tower, notes that “universities have taken on more and more features of government bureaucracies...

...While many of them deserve even morebecause there are in fact some truly outstanding people in the government service-many others deserve less...

...The District of Columbia spends 68 per cent of its annual budget on salaries, fringe benefits, and pensions...

...But soon they forgot why they had wanted this protection, and viewed it as a right...

...A 1972 survey by the American Council on Education showed that although more than two thirds of the college seniors found their university experience largely irrelevant, about half were planning to go on for advanced degrees...

...New York is also the victim of another kind of unfairness in that it is almost unique among American cities in the share-25 per cent-it pays of welfare expense...

...H. R. Gross found that of 79 executives recently recruited from private business by the Postal Serivce, 65 received improved salaries...

...On the other hand, people in their twenties and thirties would not be bothered in the least if they were told that there would be no more social security but that there would be a guaranteed annual income, and they would be positively ecstatic if the news were accompanied by even modest relief from the regressive social security tax...

...New York City teachers, according to a recent New York Times survey of eleven major cities, receive the highest median income for the lowest number of hours worked...

...You could be making $220,000 a year from dividends and still receive social security and unemployment compensation...

...But the retirees also get an extra one per cent each time there is a cost-of-living increase...

...Guaranteed Income -~__ As for welfare, we have long recommendedbeginning with an article in 1970-replacing it with a guaranteed annual income, or “negative income tax,” to be distributed through the federal tax system...

...The New Enemies Once one realizes what brought New York to the brink and is rapidly bringing the rest of us there, one also realizes that there is a new set of enemies in the land, many of whom have traditionally been the friends of liberalism, and in fundamental ways still are...

...Under the Great Society, the welfare bureaucrats got the jobs which paid very well and the poor got the services which were generally ineffective...

...See Work Incentives and Income Guarantees by Joseph A. Pechman and P. Michael Timpane (Brookings 1975...

...And like New York during the sixties, it has managed to steadily increase its number of employees in the face of a steadily declining city population...

...But Albert Shanker says, “It’s impossible to evaluate the perforniance of individual teachers, even if you’re only trying to see if the children improve...

...The point is that the government should give a person money when it is needed and not when it isn’t...

...There have been eight increases since 1969, and the total cost to the taxpayers of simply that one per cent has been over $2 billion...

...All but one per cent of our federal civil servants receive annual “step” increases of hundreds of dollars without regard to the merit of their performance...

...That is the story of America today...

...As our steady readers know, there is no subject about which we have been a more tiresome nag than federal salaries, beginning in 1971 with an article entitled “The Rising Profits in Public Service” and continuing through our last issue, in which we pointed out that while in 1960 only a few hundred civil servants were making the then-top salary of $18,000, over 16,000 are now making the current top of $37,500...

...The hardest part will be finding a way to phase out the other income supplement programs with decent regard for the people whose expectations have been aroused by them and whose fears could be exploited by demagogues opposing the guaranteed annual income...

...The effort will not be easy...

...Over the last few years we have assembled in these pages a mixture of ideas-some liberal, some conservative, few original with us-which taken together would have saved New York most of that $4.5 billion...

...So, as far as attracting talented people was concerned, we didn’t need general salary increases, but a specific way of taking care of education expense...

...The pensions of civil service retirees are tied to the consumer price index...

...It now has 75.2 employees per 1,000 residents against New York’s mere 52.8...

...The other victim of the present method of financing our universities is the parent...

...Their fears have been proved groundless by a negative income tax experiment conducted in New Jersey...

...Unfunded liability” put more bluntly means you and I will pay the difference in higher taxes...

...It’s not hard to see that room remains for much more assistance to the elderly, the sick, and the disabled without coming close to the current figure of $147.6 billion, and the administrative cost of the negative income tax would be less than half that of the current welfare program alone...

...The Washington Star recently reported that the District of Columbia was headed toward a billion-dollar pension liability and pointed out that if a former chief of police, Jerry V. Wilson, lives until he is 77, he will have collected at least $1 million from the District in retirement benefits...

...In seven of the eleven cities, teachers’ salaries range above $20,000-which would be fine for a full-time, dedicated teacher, but which in these cities buys less than seven hours a day for fewer than 180 days a year...

...Fairness to New York is important...

...Free higher education, welfare, and the salaries and pensions of its public employees...

...Here is how Walter Shapiro ended his article on “How to Beat the High Cost of Education”: “In 1967, a White House task force, under the direction of MIT physics professor Jerrold R. Zacharias, proposed establishing a deferred in come-contingen t 1 oan program in the form of an Educational Opportunity Bank...

...If the present income supplement programs continue unchanged, by 1980 one dollar out of every two the government spends will be spent on them...

...On the total number of local government employees, teachers included, Washington, D.C...

...Federal accountants and auditors, according to a report of the survey in The Washington Post, averaged $21,600 in wages and fringe benefits, compared to $13,800 for Travelers Insurance Company and $17,300 for Blue Cross in Maryland...

...The federal employees processed 2,500 claims a day compared to 3,900 for Travelers and 5,700 for Blue Cross...

...Pathetically enough, even this represents more evahation than is the custom in government...

...Some are paid without regard to other income...

...How these salaries relate to productivity is suggested by a recent General Accounting Office survey which found that it cost the government about twice as much to process medical claims as it costs private business...

...Of the hundred or so individuals who turned down employment at the Peace Corps, where I worked from 1961 to 1968, when government salaries were still within reason, all but a handful did so on the ground that they had or would soon have children in college...

...I have received a veteran’s disability payment for a back injury every month for 30 years, during some of which time I could have used any help I could get but during most of which it was not needed...

...Together they cost the city $4.5 billion a year more than it is reimbursed by the federal and state governments...

...In “A Way to Beat the High Cost of College” (April 1974), we recommended a program of loans to students repayable at two or three per cent of the students’ annual earnings over a 25- to 30-year period...

...In the last decade, in the government as a whole, the number of civilian employees at GS-I 4 and above (beginning salary $26,861) has tripled...

...I’m sure this reremains true today and that its impljcationthat we don’t have to give everyone higher salaries to solve the problem of the parent with tuition bills-also remains true...

...His morale sank...

...Pat Moynihan almost got a guaranteed annual income through Congress in 1970 but finally lost out to a coalition of liberals, who were intimidated by George Wiley and his riot squad from the National Welfare Rights Organization, and conservatives who feared that everyone would stop working immediately upon the bill’s passage.* They were joined by the welfare bureaucrats and, ironically, by the bill’s godfather, Milton Friedman, who objected because it wasn’t a sufficiently pure version of the negative income tax...

...Recall once more the dimensions of the problem...

...One can’t help suspecting that this kind of insanity, while partly based on society’s excessive regard for paper credentials, is encouraged by the fact that under the present system someone other than the student is usually paying for his education...

...When we last looked-in 1971-the civil service retirement fund had about $65 billion less invested than it needed in order to pay the obligation which the public owes to the retired employees of the future...

...When Pat Moynihan reflected upon the forces that defeated his guaranteed annual income, he directed his bitterest scorn at the welfare bureaucrats: “With astonishing consistency, middle-class professionals-whatever their racial or ethnic backgroundswhen asked to devise ways of improving the condition of lower-class groups, would come up with schemes of which the first effect would be to improve the condition of the middleclass professionals, and the second effect might or might not be that of improving the condition of the poor...

...ln 1973, Rep...

...They were bored...

...Even after they retire, the cost of civil servants continues to grow...

...I secretly suspect that these bureaucrats from government and academe regularly meet *with...

...We have invented categories for every reason for need except pure need, which is the one that counts...

...He must ask some organization for sufficient salary to cover the room, board, and tuition costs of his children...

...This would not only save the taxpayers the cost of supporting public institutions of higher learning, it would protect parents from bankrupting tuition payments and would encourage students to take their education seriously because they, not mom and dad or the government, would be paying for it...

...Charles Peters is editor-in-chief of The Washington Monthly...

...The reason for talking about it now, however, is not to pat ourselves on the back but to point out that much of what is wrong with New York is wrong with the nation and that the programs we have advocated are important, not so much for what they might have done for New York, but for what they still can do to save the rest of us...

...And no one should receive the automatic raises unrelated to increases in productivity that are the current custom...

...In fact salaries and pensioy cost the city twice as much as the combined burden of welfare and lili&er education...

...A guaranteed annual income of $3,600 per year for a family of four would cost only $21.6 billion, and it would allow benefits to continue if the fanlily had income from work so that the family could achieve a taxfree income of $7,200...

...It will require the kind of statesmanship that congressional leaders brought to the task of quieting the idiot right and left during the debates leading to the enactment of the Marshall Plan...

...They stopped taking work home...

...His motivation declined...

...Still, when you think about people in the 45-55 bracket, about the kinds of pressure veterans’ groups can exert, you realize the headaches that will be involved in making the guaranteed annual income a reality...

...It is painful to add government unions to our “new enemies” listthere is much good they could still do in improving the salaries of hospital workers, teachers, firemen, policemen, meat inspectors, garbage collectors, and other government employees who do real jobs in areas where they are still underpaid-but unfortunately the unions don’t stop once they have achieved fair treatment...

...The teachers at my son’s last public school were never held to exacting standards-they viewed that as a threat...

...What got New York into trouble...

...The government pays $12 per claim, compared to an average of $6.50 for claims submitted through private companies...

...One key to why Washington is in such a bad way is that by law over half of its employees must be paid the same as federal employees...

...And here is the’ crucial point...

...But if the fate of Western Europe was at stake then, the fate of America is at stake now...

...This means he is denied the freedom to choose a job where the compensation is modest (unless it is so modest as to qualify his offspring for scholarships) even though it may be the job which would give him the most satisfaction and be the one in which he is of the best use to society...

...Pay must be linked to performance...

...He got no applause or boos...

...But the point is that the other cities come pretty close...

...and a cadre of grey men have become well-entrenched on campus...

...This would do away with the inequity of burdening New York with the nation’s responsibility for refugees from Puerto Rico and the South...

...their fellow bureaucrats from the giant corporations and unions at places like Arden and Airlie and Aspen-and there amidst well-meaning discussions about manpower policy, cable TV, the changing world of higher education, and the crises of the cities-plot how to fleece the rest of us...

...In a joint statement, the National Association of State Universities and LandGrant Colleges, the Association of State Colleges and Universities, and the American Association of Junior Colleges denounced the proposal and charged that its intent was to let society ‘abandon responsibility for the higher education of its young people.’ That was the end of the Zacharias plan...

...Your morale sinks...

...Of course, evaluation is often difficult...

...But if you never submit your work to the appraisal of others, you live a life that is without applause as well as boos...

...There has been a growing similarity between these welfare bureaucrats who opposed the guaranteed annual income and the university administrators who opposed the education loans...

...Every one of them left at 3:15, not taking the time to grade my son’s assignments...

...Their union had won them the right to a six-andahalf-hour day, to protect them from principals who might have insisted that they stay late instead of being free to do their grading and preparing at home...

...You aren’t going to find out whether you’re getting your money’s worth from public employees until there is evaluation of their work...

...There was hope that the measure would be revived, until May 1972, when George McGovern unveiled his own un-thought-out version, which Hubert Humphrey ridiculed with such effectiveness that the idea seemed to go into permanent hibernation...

...Federal employees now receive 46 per cent more than comparable private workers, and 68 per cent of the .District of Columbia budget now goes to salaries, pensions, and fringe benefits...

...As Nicholas von Hoffman says, “Only the U. S. government would pay pensions to people who are still working for it...

...An interesting fact about the military retirees is that around 80,000 are currently serving as civilian government employees, dragging down both a salary and a pension...