The “Pay Freeze” Isn’t New…We’ve Experienced It for 30+ Years

The federal budget deficit is the highest it’s been since World War II. Multiple studies have alleged that government employees earn more than workers in the private market. So, naturally, President Obama announced a “pay freeze” for federal workers.

This, supposedly, is news. Well, at a time when unemployment is 9.8% and interest rates are near 0%, there really isn’t much of an excuse for the government to spend less on anything because that’s less consumption, which leads to less hiring and a slower recovery, so yea, it’s news.

But you know what’s even bigger news? The fact that we’ve been living through a “pay freeze” since the 1970s!  

No, not a government pay freeze. A free market pay freeze.

If government employees are paid more than their private counterparts — and I can’t grant the premise because I haven’t calculated the numbers myself — then doesn’t it stand to reason that we should be trying to raise private wages instead of lower public wages (in real terms)?

Do you think it’s a coincidence that we’re having this debate after thirty years of real wage stagnation? After the largest increase in income inequality since the Gilded Age? Do you think that might have something to do with the imbalance? With the outrage?

This debate is called a “red herring,” and it’s how bad politicians get elected. They distract you with the wrong culprit for a very real crime. And you know what? It works.