Good news for Federal Employees!!!

[VZV21]

http://www.govexec.com/dailyfed/1101/111301b2.htm

4.6% raise in January!!!

Military: 4.6%

Civilian: 3.6%, the remaining 1% gets split between localities, so DC area and New York area (like me) will get more than less populated and cheaper areas.

[Black GT-S]

Ok it is my duty as an Economist to comment on this topic. First, we must define what this statement is: "Federal workers will get an average 4.6 percent pay raise in January under a bill signed into law Monday by President Bush" And any one with an academic background in law, govt or econ would agree that this is a govt. price control. What this means is that the price is going to be controlled and set by the govt. Now having said that, i will now explain the type of price control it is. It is a Price Minimum acting the same as a minimum wage law in essence a price or wage can not be payed or set above the govt. set price or wage.
Now that the price minimum has been identified, i will now explain the effects and methodology behind the minimum price control. To do this, I will use a common example, infact, i will use you as the example :) to help even out the playing field. Now it is my assumption here that you are a good worker and are worth the wage ammount that you are currently being paid. it is also my assumption that you know of slackers ie co-workers that do not work as hard as you. Am i wrong in this analysis?
Now that you have agreed that workers (maybe even friends) that work with you every day slack and dont always pull their weight. The question now becomes, what does the govt. do with the workers that were barely worth the current rate? ( economists call this workers at the wage margin - where wage exeeds thier productivity) The answer is, they are fired and or asked to leave their job because they can not keep up with the productivity and are having to be payed more than what they are worth.
So then comes the question, Where do these individual workers go ? (economists label them as a surpluss of unskilled workers) The answer is, they go into the welfare system. This seems like a nice idea, however, when a surpluss of unskilled workers are poured into the welfare system at once due to a govt set price control, across all govt markets the welfare level at its current level will struggle with accomodating them or will have to increase its size and funds.
Where do the funds come from to support the welfare system? They come from taxpayers tax dollars. So, to offset the surplus of unskilled workers, the govt will raise taxes to increase thier revenue and pay for more welfare. Correct me if im wrong, but i do believe that everyone is a tax payer even people that frequent newcelica.org.
So now how do we stop this increase in our taxes and pay the workers what is fair? Well, we should define fair as the productivity produced by a worker relative to thier wage rate. Then, a wage would be fair. As long as govt. price controls exist the market will never balance itself out and their will always be a surplus that is payed by mine and yours tax dollars!
In conclusion, let the market decide the wage based on real productivity and lets keep people thier jobs and familys out of welfare. I think we can all agree that the less family's out of welfare the better off America is!

- Tim (Economist)

[VZV21]

Teh 3.6% raise isn't for everyone. I take it, you're not a federal employee, so don't worry about the raise in January.



Being a federal employee (Dept of Defense, US Army)...my starting rates are below the private industry.

This is true for any other Civilian employee. My dad, works at the USPTO. He gets paid on a GS scale. THe USPTO, you'll have to work according to a quota (which is your argument)

Myslef, as an Army Engineer, don't have have to work with a quota, mainly the job gets done within the project's timeframe and cost. It takes a few years for me to catch up with my peers in the private industry (I make $28k, where my peers make $40-50k)

Also, you forgot, my boss is not the Pres or CEO of a company, instead it's the country. It's why, like enacting new laws or policies, it has to go through the usual route, Congress & the President.


Let's be reasonable here -- if your boss (pres, CEO, etc) decides to increase the base salary of the employees, would you be complaining?

Oh yeah, don't worry about me or my co-workers -- The US Amry has never laid off any engineers nor fired any engineers, no matter how incompetent they may be in the past 25 years. Too much paperwork.