06/19/2017

For New York City’s Municipal Workers, A Supplementary Welfare State

Kevin D. Williamson, National Review

The inflation of its public-sector compensation packages is functionally an income-redistribution program.

New York City’s municipal work force is, under the mayorship of Bill de Blasio, now larger than it ever has been, at nearly 294,000 workers. This is not a matter of staffing up a few agencies that had been cut back during the recession; as the New York Times reports, “nearly every city agency now employs more workers than it did in 2014, when the mayor took office.”

New York City’s population is growing, up about 4 percent since 2010. But its city work force is growing much more quickly: In 2014, the city had one municipal worker for every 32 residents, while today it has one for every 28 residents, or a work force that is about 12 percent larger relative to the population. Many of those workers are doing work that needs to be done. Some of them . . . well, from the Times again: “Sanitation workers are now flanked by civilian outreach teams in blue dress shirts with expertise in project management and mulch, helping New Yorkers make sense of its new composting plan.”

New York’s ratio of city workers to residents is much higher than was Detroit’s (1:60) when that unhappy city went into a financial crisis, and it is much, much higher than the ratio of such pleasant and well-administered cities as San Diego (1:130). These figures exclude public-school employees and a few other large populations of public-sector employees, such as those of the Port Authority, who are not employees of the city government itself, so the public-sector footprint is even larger than it appears.

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Thanks to "bracket creep," the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

 

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