Public sector, meet private sector economic reality

Onward and upward goes the compensation of some government employees, even during the deepest economic distress in generations.

The latest bit of government largess – 5 percent pay increases – has gone to Tacoma Fire Chief Ronald Stephens and Police Chief Don Ramsdell. Their salaries will now be, respectively, $181,534 and $180,551.

That may or may not be too much in a city the size of Tacoma. What’s interesting is the thinking behind the raise: These two had to be paid more because they were in danger of being overtaken by their subordinates.

Without the increase, the city’s deputy fire chiefs and assistant police chiefs – all unionized, despite their high-management status – stood to make more money than their bosses.

Government compensation is rife with that kind of logic: Someone else gets more, so our guys ought to get even more than them. What clobbers taxpayers are the constant rounds of leap-frogging between one jurisdiction’s pay schedule and the pay schedules of “comparable” jurisdictions.

Public officials have a quaint notion of “market” pay. In the private sector, “market” is roughly defined as what you have to pay good employees to make them want to stick around. Otherwise, they complain with their feet.

In government, market pay is generally defined as what someone in a similar position in another government makes – regardless of whether attrition is a threat.

The City of Tacoma recently passed out millions of dollars worth of raises to its employees on the basis of such market comparisons, even as a $26 million hole has opened in its current biennial budget. The raises reflect the city council’s expensive policy of paying workers at least 70 percent of the highest pay given to their counterparts in similar cities.

Officials sometimes claim that the higher-than-average compensation is needed to keep employees from jumping ship. That’s true for some scarce specialties – Tacoma Power’s linemen, for example.

But compensation is only one factor that can lure an employee to a better-paying position elsewhere. A more important factor is whether that better-paying position exists in the first place. Even before the new raises, the City of Tacoma wasn’t suffering from undue attrition in most job classifications for a simple reason: Jobs are scarce – and most employees have nowhere to go.

To their credit, many government unions and elected officials now recognize they can’t keep riding the gravy train at the expense of private taxpayers who are enduring the real-world economy.

Pierce County unions have been signing no-COLA contracts; Tacoma’s rank-and-file police have now gone two years without general raises. State of Washington employees this year accepted a 3 percent cut in pay through furloughs and swallowed a greater share of their health expenses.

But get a load of Tacoma’s police and fire deputy chiefs: They’ve pulled in raises of more than 10 percent over three years – three years known to less fortunate souls as the Great Recession. Even for their bosses, that’s a hard act to follow.