Once upon a time, public employees made less than private-sector workers but were compensated more generously on their pensions to make up the difference. The pension was intended as an incentive to stay on the public payroll as a career, thus insuring a stable work force able to keep essential daily government services functioning regardless of changes in political leadership. That was a reasonable model in the decades after passage of the Pendleton Civil Service Act that in 1883 replaced the old spoils system with a merit-based professional work force. For years thereafter, career government employees accepted lower salaries but received defined-benefit pensions under the Civil Service Retirement System.Click here for the rest.
But beginning in the 1960s, Congress made federal civil service salaries and health care benefits comparable to those of private-sector workers. At the same time, CSRS benefits became ever more generous, even to the point of awarding multiple cost-of-living-adjustments within a year. By 1984, CSRS was replaced by the Federal Employees Retirement System, a defined-contribution plan that covered all subsequent new hires. But federal compensation kept growing and government employees' advantage over the private sector steadily increased. And at the state and local levels, public employee unions kept the pressure on for raising salaries and benefits regardless of the ability of taxpayers to support such expenditures.
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