Federal Employees, Pay, and Labor Mobility

Two nights ago at the YMCA I caught a Mr. Cafferty on CNN bewailing the pay of Federal employees and calling for a hiring freeze. "It's bloated," he says.

Of course, he's right, it is bloated. And of course, he's wrong, a hiring freeze is idiotic. With a bureaucracy as big as ours, you can't have blanket policies, such as a hiring freeze. Some areas need more staffing and others need much less. However, he does highlight a key problem with the Federal Bureaucracy--the lack of labor mobility.

Every once and awhile various politicians or think tanks come out arguing that federal employees are overpaid. Immediately Democrats and labor unions rush out their chosen studies to counter any such claims, and insist that, in fact, federal employees are underpaid. People yell, and then it's forgotten. However, all that yelling misses the central point, namely that federal employees are not so much overpaid, but that they can’t be fired. Furthermore, the General Schedule encourages promotion and hire pay coupled with time. Thus you have high percentage of folks making $100K but doing absolutely no work because they were overpromoted and can’t fulfill their role.

To fix the bloated federal bureaucracy we need to give managers the ability to easily fire people. However, that ain't going to happen because there are far far too many rules. Unless the employee is criminal, it is nearly impossible to get rid of him. Why? Here's one answer.

Money Money Machine...

Yesterday, the US Supreme Court expanded "corporate personhood" and allowed unlimited spending on political campaigns (but not for politicians). Like most change in politics, this news brought lots of hyperventilating...it's the end of the world and Exxon is going to buy all politicians from here to Timbuktu. I'm not so sure. As highlighted in Marginal Revolution, from a paper by Stephen Ansolabehere, John de Figueireido, and James Snyder.

Finally, we illustrate that when one controls for unobserved constituent and legislator effects, there is little relationship between money and legislator votes. Thus, the question is not why there is so little money politics, but rather why organized interests give at all. 

Now there are some problems with this paper because it only accounts for direct campaign contributions (from individuals, PACs, etc...) and doesn't address 507 spending. Nevertheless, the study holds true with my experience of politics. At the end of the day we still have one vote for one person. The hyperventilaters assume that people are idiots. I don't think they are idiots and I don't think this is the end of the world.