Liberals need to make a choice. Do government services exist solely to cost-effectively provide services to the public that enhance the general welfare? Or is an essential part of public service enhancing the welfare of those employed by the government, even if that can detract from the effectiveness of that service to the general public?
There are examples of both! In some countries (Saudi Arabia, for example, I believe) the government actively employs people for the sake of employing people. In other words, the services rendered aren't the desired end, merely the gainful employment of the citizens. In others, the services rendered are the end and the government employs citizens merely as a means to that end.
Right now, we have a schizophrenic view on the left. Liberals want the government to provide effective efficient services to the public. But at the same time, they are willing to go to bat for higher-than-market total compensation (pensions are important!) and generous work rules for (particularly low-skill) government workers.
I think these two desires are in conflict with each other. I understand where the impulse to push for both comes from. Many conservatives advocate cutting spending on social programs dramatically not because they think the programs are inefficient but because they are ideologically opposed to such programs. In that case, it is understandable that liberals put a premium on defending every dollar, even if some of them are wasteful or inefficient. After all, the alternative isn't more efficient programs but rather woefully deficient programs.
Now here's where I'm going to make my fellow liberals even more angry. I think it would be very silly to deny that the influence of unions, particularly in the public sector, are part of the reason this schizophrenia exists. It is in the best interests of those unions, who are HUGE backers of the Democratic Party, to extract as much compensation and as generous work rules as possible. But that has an effect on the broader liberal project. By putting so much emphasis on protecting the incumbent workers, we are failing to provide the best services possible to the broader public who are badly in need of such services. (I have a half-written essay on how transit unions can and do make it harder to provide cheap and effective public transit. I'll finish it some day, I promise.) Right now, public sector unions are making it more difficult to provide efficient public services.
Liberals need to make a choice. Is it more important to provide generous pensions and work rules (which are far more important, in my opinion, than cash compensation) to those incumbent bus drivers, bureaucrats, teachers, etc or to provide public services at low cost that have dramatic effects on the lives of tens of millions of those who are vulnerable, unemployed, and working poor?
I know, I phrased that in a way that is rather tilted toward my view. But if we really want to help the working poor have a higher standard of living, there are better ways than piecemeal efforts through improving the compensation of public workers. Beef up the Earned Income Tax credit, which is the most important piece of poverty-fighting legislation on the books. Increase cash transfers of other kinds (things like General Assistance in Minnesota pay only $203/month). These are broad-based ways to increase income rather than ones that affect only those working for public agencies.
I want to make it clear that I'm not trying to argue that we should impoverish bus drivers. What I am arguing is that we should spend as much money on CASH compensation as is necessary to get the workers we need. In some places, I'm sure that means spending more. But at the same time, let's reform pensions and work rules. In exchange for higher up front compensation, take away some job security. Make it easier for public agencies to keep talent and fire those who can't cut it. And move to a defined contribution system of pensions that won't leave public budgets on the hook for decades the way defined benefit plans can.
Clearly there will be many public workers who are worse off because of this. Again, this is why it's important to beef up cash transfers such as the EITC. Again, I want to make benefits as broad-based as possible. If a bus driver loses some income and schedule flexibility, I want to make sure there are cash transfers to help them out. But I want that same safety net to apply to a person working at McDonald's for minimum wage.
I know this is a little jumbled at the moment. And it probably sounds pretty hostile to a lot of my liberal friends. I tried to make it as clear as possible that my goal is to further the goals of broad-based prosperity that are the core of the liberal project. In my opinion there are other parts of the current liberal agenda that are problematic when trying to reach that goal. Let me know what you think. What am I missing?
Edit to add: Matt Yglesias uses an NYPD story as a hook for a very similar thesis in a post today.
Edit 2: Ross Douthat's column in the NYT touches on similar ideas:
It’s a story of a public sector that has consistently done less with more, and a liberalism that has often defended the interests of narrow constituencies — public-employee unions, affluent seniors, the education bureaucracy — rather than the broader middle class.