Productivity is the key to prosperity. And technological innovations are the key to productivity—and to the dislocations of workers
Not surprisingly, government productivity stinks relative to private-sector productivity.
Before getting into the numbers, let’s go on a quick tour of some locales, starting with my hometown of Scottsdale, Ariz.
Scottsdale is the best-run city I’ve ever lived in, but my bases of comparison are St. Louis, Chicago, and various cities in New Jersey—locales where union featherbedding and political corruption are reflected in bloated government, high taxes, potholed roads, decrepit infrastructure, and huge unfunded liabilities for public pension plans.
Particularly telling is the stunning amount of trash and litter strewn alongside roadsides in the Garden State, a result of the lousy work ethic and poor productivity of the state’s government workers. If mobsters wanted to ditch a body where it would never be found, they could just put it in a trash bag and throw it on the side of a New Jersey road, amidst all the other bags of trash that are never picked up. No doubt, Jimmy Hoffa’s body has mummified alongside some road in the Garden State.
Think I’m exaggerating? Think again. One year trash had piled up so high under an Interstate 78 overpass near Newark that the interstate had to be shut down for months when the overpass was destroyed after the trash caught on fire. Maybe Hoffa’s mummy was cremated in the fire.
Switching to the subject of Donald Trump, the president-elect has joined Democrat bandits in calling for increased federal spending on infrastructure, which will reward states like New Jersey and cities like Chicago for their featherbedding and corruption, at the expense of states and cities that are well run and fiscally responsible. This is akin to forcing a homeowner who keeps his house in excellent condition to pay for a new roof and new siding for the house of a neighbor who spends all of his money on booze and gambling.
I digress. Let me return to Scottsdale.
Years ago Scottsdale was a leader in an innovation to replace the manual labor of picking up household trash. The innovation is commonplace today across much of the nation: Trash trucks are equipped with a lift that the driver can operate from the cab to pick up uniformly-sized trash cans.
Today, in another productivity initiative, the city’s water department is replacing all of its residential water meters with “smart” meters, which can be read remotely instead of sending a worker to each house to read the meter.
Last week, I chatted with a friendly city worker who was replacing my old meter with a smart meter. I said, “Well, the good news is that it will be more efficient to read meters, but the bad news for city workers is that the new technology will put some employees out of work.” He responded, “No, the city is going to find something else for the meter readers to do.”
Will the former meter readers be placed in newly created jobs or in existing vacancies? I don’t know, but the answer will determine how much the city gains in overall productivity from the smart meters.
Only an oddball thinks of such things when seeing a smart meter being installed. Out of a city population of 235,000, I’m probably the only citizen who thinks this way. My excuse is that I spent much of my career in manufacturing, including with one of the most efficient and productive companies in the world, where such thinking is de rigueur. If you didn’t think like this, you were fired.
Most politicians don’t think like this.
Nor do reporters.
If you want to know how your city and state are doing overall in productivity and efficiency, the local media probably would be the last place to find the information. You’d have to spend time conducting your own research and contacting city and state officials. Either because of laziness or an affection for big government, most media don’t provide such important information to their audiences as a matter of course.
You may not know the productivity figures for your town and state, but if you read the following, you’ll get an idea of what they are for the nation as a whole.
- Employment at all levels of government (federal, state, county, and municipal) has decreased relative to population since the Great Recession but is on the rise again.
- Over the last 75 years, total government employment has grown from about five million to about 22 million, or more than a fourfold increase. During the same period, the population of the USA has doubled. In other words, government employment has grown twice as fast as population, suggesting that government productivity has gone in reverse.
- There would be approximately 12 million fewer government employees at the state and local levels if public sector employment had not exceeded the growth in population. Assuming a fully-loaded cost (wages, benefits, overhead) per government employee of $100,000, the total per annum cost of those additional 12 million employees is $1.2 trillion, which is equal to the average annual income of 27 million Americans in the private sector.
- The $1.2 trillion does not include the regulatory costs inflicted on the private sector and the public at large. Respected sources estimate these costs at between $7,000 and $10,000 per capita, or, in total, $2.275 trillion to $3.25 trillion.
These staggering numbers are a major reason why incomes have stagnated for working stiffs in private industry, but you wouldn’t know it by media coverage of the problem.
Yes, technology also has negatively impacted working stiffs, especially those without a college degree. For example, in the 1950s, there were over a quarter of a million highly skilled machinists and tool-and-die makers. Today, as the result of computer-aided machines on the factory floor, there are only about 45,000 of them. But as hard as this has been on workers, there at least have been benefits that have accrued to society at large as a result of the productivity increases. The same can’t be said for the negative productivity of government.
For sure, the incoming Trump administration and the Republican Congress shouldn’t reward states like New Jersey with money for infrastructure improvements until they improve the productivity of their workforce.
Fortunately, since I no longer live in the Garden State, I can say this without fearing that a corrupt contracting company or Mob-dominate union will kill me, put my body in a Hefty bag, and throw me by the roadside, where it will remain for decades.