Chapter 15

The Cult of Government Bureaucracy

A sure fire recipe for inefficiency and waste is to turn an activity over to a large organization and the inevitable bureaucracy that runs the show. In our country the largest employer, by far, is the federal government.  You might speculate that there have been more government employees per capita during democratic administrations and you would be wrong. Currently there approximately 24 million government employees

The following table shows the number of government employees, total population and the GE/P Ratio. It essentially takes a snapshot at the end of each president’s term and compares it to the point when they took office. Numbers are stated per 1,000.

Source: http://www.forbes.com/sites/mikepatton/2013/01/24/the-growth-of-the-federal-government-1980-to-2012/

The above numbers include all those employed in all governments, federal, state & local. In total, this represents about 15% of the entire work force (public & private).

Taking a look at civil service employees, which make up the bulk of Federal government employees, that belong to one of (if not the) strongest unions in the country. Currently there are just under 3 million civil service employees which represents almost 20% of all union workers. Nineteen percent of federal employees earned salaries of $100,000 or more in 2009. The average federal worker’s pay was $71,208 compared with $40,331 in the private sector, although under Office of Management and Budget. In 2010, there were 82,034 workers, 3.9% of the federal workforce, making more than $150,000 annually, compared to 7,240 in 2005.

Since government workers make so much more than workers in the private sector one would hope that they make up the difference in productivity? Again, such thinking is misguided. The Bureau of Labor Statistics does track productivity but one could argue that it is like the fox watching the hen house. Using their stats they do show a very slight annual increase in overall productivity per person (about 1% per year for the last 30 years or so), but a significant decrease in productivity per wages as they have increased at a faster rate. There is one very significant issue with their stats and that is the assumption that the base line against which all future numbers was a reasonably productive number. And if you believe that then…….

The above chart is revealing, but it still does not address the issue of productivity of the individual in the workplace. What is does reflect is that government workers make 75%+ more than private sector workers and work 10% fewer hours.                                                                                                                                                                           This is a very difficult item on which to find valid information so I speculate a bit. I would be willing to bet all of the money in my bank account that a 10%+ improvement in individual productivity among all government workers is achievable. I suspect this expectation is actually too low. Achieving this result will never occur through any inspection or evaluation by an existing government agency. It will take the efforts of a professional, private management & administrative auditing firm. This service does exist and could easily be funded out of savings. My suggestion is that an RFQ be issued for this activity and that any and all management consulting firms be invited to quote. I do wonder how the controlling body for Civil Service would react to this suggestion?