True Colors

Facing a dire fiscal crisis, the Camden, NJ government laid off half its police force and one-third its fire department. The city sought to cut pay to avoid or minimize layoffs, and the unions preferred to see many of its members lose their job so the remaining members could have higher pay.

The people of Camden will be the ones who suffer, losing the protections provided by greater numbers of police officers and firemen.

Newark, NJ faced a similar situation, where 167 police officers lost their jobs after the police union wouldn't agree to wage and benefit concessions.

This terrible outcomes highlight the obvious, but often overlooked, incentive that taxpayers have: taxpayers should want the most services for their tax dollars, which implies that, in the efforts to balance government budgets, taxpayers should strongly prefer to see reductions in government employees all-in compensation than layoffs which reduce the quality of government services provided.

This is exactly analogous to how most people view other goods and services they purchase, whether they try to pay less while getting good quality. Most people have bought items on sale, at discount stores, or bargained for a better price such as buying a car. Directly or indirectly, such a focus on getting a good deal serves to reduce the income of someone in the chain of supplying the good or service.

Whether a car salesman who gets a lower commission because you negotiate a lower price on the car you purchase, or lower revenues to the retailer which puts downward pressure on wages when you buy clothes on sale, most people try to get a better deal when they spend their money even if the impact leads to lower wages for someone else.

As taxpayers, we need to have the same mindset, and recognize how normal and natural it is to do so. Otherwise, looming disasters such as will afflict Camden and Newark will become commonplace.