Currently in Cuba, more than 85 percent of their 5.5 million workers are government bureaucrats. Even Fidel Castro recently acknowledged that this rate was unsustainable by stating that “the Cuban model doesn’t even works for us anymore.” Therefore, Cuba will cut 500,000 government jobs in the next six months to help fix its nearly bankrupt economy. According to Cuba’s official labor union, “Our state cannot and should not continue maintaining companies, productive entities and services with inflated payrolls and losses that damage our economy and result counterproductive, create bad habits and distort workers’ conduct.”
It’s unfortunate that the Obama administration has not learned this vital lesson. In the United States, one in every six jobs—22.5 million—is a government job. Since the start of the recession, public sector employment has increased by 590,000 while the private sector has lost 7.9 million jobs. It’s hard to believe that Cuba is correcting its mistakes while the United States is escalating its financial problems by adding even more bureaucrats. As Cato Institute Dan Mitchell states “Obama wants more people in the wagon and fewer people pulling the wagon.” If the current trends continue, the wagon—the representation of the economy—will be impossible to move forward. As the Heritage Foundation chart below shows, the gap between government and private sector jobs has rapidly grown:
Furthermore, taxpayers in the private sector cannot afford to pay federal bureaucrats their bloated salaries. With benefits included, the average federal government employee is paid $123,049 while the average private sector receives $61,051 annually. After adjusting for inflation, federal employee wages increased 36.9 percent while private sector wages rose only 8.8 percent since 2000.
Some claim that government bureaucrats deserve to be paid twice the salaries of private sector workers since they have attained more education. According to Paul Krugman, it’s an “apples and oranges comparison.” However, the Heritage Foundation has conducted a new study that carefully accounts for education and skills differences between government and private sector employees. The results:
While federal employees do earn more partially because they are more skilled than the average private sector worker, controlling for skills does not eliminate the federal pay premium. Depending on the methodology employed, the average federal employee receives as much as 22 percent more in wages than an equally skilled private sector worker. Including both wages and benefits, overpaying federal workers costs taxpayers approximately $40–50 billion per year.
America needs to take one lesson from Cuba. America must also take strives to cut needless government bureaucrats and their padded paychecks. The rapid expansion of government employees jeopardizes America’s future economic growth. We must stop these harmful trends before it’s too late.