Public sector jobs - not just a US problem

"It was the best of times, it was the worst of times"
- A Tale of Two Cities by Charles Dickens

Instead of two cities the Dicken's quote now applies to a tale of two working classes - a state sector awash with taxpayers' cash while the rest of the economy struggles to stay afloat. A recent study by centre-Right think tank Policy Exchange shows that Public employees in the UK work nine years less than their private sector counterparts AND are paid 30 per cent more.

Those in the private sector work 23 per cent longer - equivalent to an extra nine years and ten weeks - than public sector employees. This is thanks to a combination of shorter hours, more time off and earlier retirement for public workers. Now it used to be that these public benefits compensated for lower pay. You had to offer something to encourage talent to give up high paying private jobs and work for the state instead. But today the public sector has better benefits AND better pay. The report says that on an hourly basis, the typical public sector worker is 30 per cent better paid than their private sector counterpart.

And the retirement pensions are quite generous for public workers. Ironically when 63% of the private sector workers retire without any pension at all, they will still be taxed and paying for a comfortable retirement for civil servants.

Bottom Line

In many countries the fox is in charge of the hen house. The government pays itself well and when the money runs out it will raise taxes or just print more money. In the US I expect the problem to continue until we reach the status of Greece and Spain where public sector expenses bankrupt the nation.