He's this week's Hometown Hero! Let's give a big saaaa-lute! to Mayor Mike.
Not content to simply refill every state government job that was eliminated by Governor Janklow (Question: Did you notice a fall-off in state services when Janklow reduced the number of state employees? Me either. Are you noticing an improvement in state services now that Mayor Mike is increasing the number of state employees? Neither am I. Weird huh?) our Mayor Mike has put on his shop steward's hat. He's mad as hell and he's not gonna take it any more!
Mayor Mike wants his constituents, er, I mean state employees, to get 3% raises. The legislature wants them to get 2.25%.
The average inflation rate over the last five years is 2.55%. The average salary increase for state employees over the last five years is 2.80%. Salary increases over the past five years have averaged 9.8% greater than inflation. That doesn't include the 2.0% to 2.5% that's budgeted each year to increase salaries for state employees who are below mid-point in the salary range for their job.
What that means is, if you're a state employee and you've been in the same job for the past five years, your earnings have increased ahead of inflation. If you earned $25,000 in 1999 you are now earning $28,700. $25,000 worth of stuff in 1999 now costs $28,352. Is that a huge variance? No? Should it be a big variance? I don't think so.
Remember, the example above is for a person doing exactly the same job they were doing in 1999. It doesn't factor in raises for promotions. It doesn't factor in additional increases that person would receive if their salary was below midpoint.
2005 inflation is projected at 3.4%. Consequently, if the 2.25% increase the legislature wants holds, then that 1999 $25,000 salary will be worth $29,346 and that $25,000 worth of goods will cost $29,316. Sounds right to me.
My point with that tedious bit of analysis is that South Dakota state employees have been treated somewhat better than fair the past five years. Their pay, in 1999 dolars, has increased relative to the work they are performing slightly more than the cost of living. The legislature's proposed cost of living raise will bring state employee pay and cost of living into balance. That sounds like good government - employees are fairly treated, the taxpayer's money is carefully spent.
But that's not Mayor Mike's view - oh no sir! On public radio the other day Mayor Mike was heard to exclaim about the proposed 2.25% increase: "I thought it was a terrible message to send to state employees. I thought it was a terrible message to send to other public employees across South Dakota. I really disagree with what they did."
What? What's so terrible? What is terrible about that message? What is disagreeable about what the legislature did?
State employees don't seem out of sorts about the 2.25% number. Ed Jacobson, the interim director of the South Dakota State Employees Organization, said state employees wanted 3.0%, but appreciate the 2.25% and understand the challenge for the legislature.
According to an AP story in the Rapid City Journal Rounds said "The Legislature could have sent a message to employers about good wages." Well sure they could. But we didn't send our representatives to Pierre to send messages or to create wage inflation, we sent them to govern. (Of course we didn't elect a Governor to be the Mayor of Pierre either. Guess you can't have everything.)
Ironically Mayor Mike is doing pretty much the same thing Steffi was called out on here. On the one hand he whines about the state's "structural deficit" but, on the other hand, he wants to surrender fiscal discipline in favor of sending messages. It doesn't work.
Remember what physics teaches us - you cannot have your cake and eat it too. Even if you're the Mayor of Pierre.
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