After plans to negotiate $145 million in employee concessions failed, the state government will eliminate more than 300 job openings and require its unionized employees to take furlough days, according to the Department of Technology, Management and Budget. These moves point to a broken system that ensures automatic and unaffordable above-inflation pay increases.
DTMB reports that the number of state employees fell 21 percent from 1999 to 2009, while total payroll increased 38 percent. In addition, the average compensation package of a state employee increased 52 percent from 2000 to 2010.
While Michigan was going through a decade-long recession, state employee compensation packages grew substantially.
Mackinac Center readers may be familiar with these trends. The administration is finally paying attention to them as well. While it’s disheartening to see that the problem will continue for at least another year, there has been legislation introduced to reduce the benefits costs of employees, which can go a long way toward reducing the cost of out-of-control compensation.