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#101687

Mike Herrmann
Participant

I have a bit of a different school of thought here that I don’t see reflected below which is based a little on supply and demand but more on the actual flow of dollars into tax coffers.

Generally speaking government salaries lag private sector, and government funding drops slower and recovers slower in/after a recession than private salaries do. Therefore governments are left trying to balance budgets post-recession when private sector companies are beginning to recover and expand. It makes sense- the recovery dollars won’t hit the government tax coffers until a year or two after the recovery has started.

That being said: government salaries are a consistent throughout the ebbs and flows of the economy. We never push to increase salaries when times are good, and I think its short sighted to cut dollars when times are bad. Unless you want to lose resources. Think about it: when will you restore that salary? Will the public ever really allow it?

Scaling back services, and even reducing staff, makes sense in the short term.