Public Sector Pay and Benefits are Bankrupting France and New Jersey

Posted by PITHOCRATES - October 22nd, 2010

Soon, in France, You’ll be Able to Retire Before You Start Working – If the Protestors Get Their Way

Je suis français.  I am French.  And being French, it is my birthright to get lots of free stuff.  Or so says Gilly, a cemetery union representative in Marseille.  The following quotes come from AP’s French strike to save ‘birthright’ of privileges posted 10/20/2010 on Google News.

For Gilly and many other Frenchmen and women, social benefits such as long vacations, state-subsidized health care and early retirement are more than just luxuries: They’re seen as a birthright — an essential part of the identity of today’s France.

I remember reading about the French Paradox.  While Americans were suffering epidemics of heart disease, the French were living to ripe old ages.  Free from heart disease.  The paradox?  The French diet.  Heavy creams.  Cheese.  Wine.  Sure, the Americans eat a lot of crap.  But how can the French have such a high cholesterol diet and not suffer heart disease like the Americans?  Perhaps this can explain it:

“We want to stop working at 60 because it’s something our parents, our grandparents and even our great-grandparents fought for,” says Gilly, 50, a union representative at Saint-Pierre Cemetery, the largest in this bustling Mediterranean port city.

Retire at 60?  Work for half of your life (or less) and enjoy a generous retirement.  No wonder they’re living so long.  No stress.  Cradle to grave welfare.  An early retirement.  Gosh, that sounds good.  Almost too good to be true.  Once upon a time, in feudal France, you worked from childhood until you died.  Things have definitely got better.  Just how long has it been this good?  According to Gilly, it goes back generations.  All the way to his great-grandparents.  But has it?

It was in 1982, under Socialist President Francois Mitterrand, that the minimum age to stop working was lowered from 65 to 60. The measure, emblematic of the 14-year Mitterrand presidency, was adopted by a special ordinance that bypassed parliament.

And now the government wants to raise the retirement age to 62.  You can understand Gilly’s consternation.  If you do the math, the average lifespan per generation must be somewhere around 10 years.  So one can understand how the 50 year old Gilly is anxious to retire at age 60 instead of at age 62.  Because people in his family rarely live beyond 10 years of age.  Unless Gilly is exaggerating for effect.  Or lying.  Because the French were retiring at age 65 until Mitterrand changed that in 1982.

Tax the Rich, Middle Class and Anyone Else Who Isn’t in the Public Sector

This is all well and good as long as someone else is paying the bill.  And this is something that the people in the social democracies don’t understand.  There is a limit to the treasury’s generosity.  For the public treasury to pay these very generous benefits, there has to be money in the treasury.  And states fill their treasury, basically, in one of three ways: taxing, borrowing and printing money. 

If they tax too much, people will have less disposable income.  They will buy less.  Private business will see a loss in sales revenue.  At the same time, they will have to pay more in taxes.  They may lay off employees to adjust to the reduced demand and higher tax burden.  The economy will slow into a recession. 

If they borrow too much money, interest rates will rise.  This will increase the interest people pay on their credit cards.  They will buy less.  Private businesses will see a loss in sales revenue while their costs go up (because of the higher interest rates).  They may lay off employees to adjust to the reduced demand and higher costs.  The economy will slow into a recession.

If they print too much money, they may ignite inflation.  Inflation raises prices.  People buy less because of high prices.  Private businesses will see their costs go up with these higher prices.  They may lay off employees to adjust to the reduced demand and higher costs.  The economy will slow into a recession.

To summarize, excessive government spending leads to recession.  Which results in fewer jobs in the private sector.  This is a big problem for those public sector jobs.  Because it’s the taxes from those private sector jobs that pay for those public sector jobs.  In other words, the more the public sector demands, the more they kill the private sector, the golden goose providing that rich public sector pay and those glorious public sector benefits.

The Sans-Culottes are Very Much Avec-Culottes These Days – But They Still Revolt

I’m sure the French understand this.  I mean, how bad is it really getting over there?  Well, see Clashes, protests in French tensions over pensions by AP’s Angela Charlton on www. apnews.myway.com.  She begins with:

PARIS (AP) – Protesters blockaded Marseille’s airport, Lady Gaga canceled concerts in Paris and rioting youths attacked police in Lyon on Thursday ahead of a tense Senate vote on raising the retirement age.

A quarter of the nation’s gas stations were out of fuel despite President Nicolas Sarkozy’s orders to force open depots barricaded by striking workers.

Gasoline shortages and violence on the margins of student protests have heightened the standoff between the government and labor unions who see retirement at 60 as a hard-earned right.

New violence broke out in Lyon, as police chased rampaging youths who overturned a car and hurled bottles. Riot officers tried to subdue the violence with tear gas. A gendarme helicopter circled overhead.

Wow.  If it wasn’t for the Lady Gaga and the airport and the gas stations and the police helicopter, you’d think the sans-culottes were making another revolution.  It brings to mind the classic lyrics of Adam and the Ants’ classic Ant Rap (my sister was a BIG fan):

Liberté, égalité, au jourd’hui c’est tres tres tres

Voici l’opportunite nous incroyables!

But this ain’t the 18th century.  And famine isn’t a way of life for the masses.  No.  In fact, life is pretty darn good.  No 18th century peasant lived as grand.  In fact, the life they’re protesting about today was closer to the French nobility than it was to the Third Estate in 1789.  These aren’t food riots.  This generation just doesn’t want to work another 2 years before retirement. 

It would appear that these protestors don’t understand the intricacies of a market economy.  Perhaps they have lived too long in a quasi-socialist state.  Been brainwashed by their unions.  Or maybe they just don’t care.  As long as they get their benefits now they don’t care how they impoverish future generations.  It’s a pity.  How a minority of the French people can destroy a great nation. 

Good Work if You Can Get it – and You Can Get it if You Belong to a Public Sector Union

One wonders how people can resort to violence.  Of course, when you consider how much better the public sector lives than the private sector, you wonder how this hasn’t exploded earlier.  Let’s go across the pond.  To New Jersey.  But first, if you work in the private sector, pause for a moment and think about your pay and benefits.  How hard you work and how little time you get off.  Feel overworked and underpaid?  If you worked a 60-hour week or two, you probably do.  Now, think about the last time some public sector union went on strike.  When they asked you to feel their pain.  To support their cause.  Okay, now read this excerpt from a My FOX New York article by Luke Funk (see Audit: NJ Turnpike Wasted Millions On Perks on www.myfoxny.com):

MYFOXNY.COM – Auditors say the New Jersey Turnpike Authority wasted $43 million on unneeded perks and bonuses.  In one case, an employee with a base salary of $73,469 earned $321,985 when all payouts and bonuses were included.

How does that make you feel?  Think about this the next time you get change from the person sitting in a New Jersey toll booth.  Think about your skill level and your pay.  Then think about the toll booth occupant’s skill level and pay.  Now switch places and imagine someone wanting to cut your pay and benefits.  I mean, if someone was trying to cut your pay by, say, $300,000 because the state is on the brink of bankruptcy, what would you do?  Start looking in the want ads for another unskilled job that pays 3-5 times of a skilled job in the private sector?  Or are you going to do what the French are doing?

Is it any wonder Europe is burning?  First Greece.  Now France.  You get pay and benefits like this and you live like royalty.  And one thing about royalty.  They don’t abdicate without a fight.

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