Pay Raises Sent All the Wrong Signals

Summary


The dust-up in Dayton about managers getting a pay raise -- even as the city faces a stunning $15 million to $20 million deficit next year -- is much ado about something.

Labor contracts -- at the city and in the public sector generally -- requiring regular and sometimes hefty "step" pay increases on top of negotiated cost-of-living raises create a culture wherein employees think the sky's the limit with respect to their pay.

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Extract


Pay Raises Sent All the Wrong Signals

That's a problem if governments ever hope to control personnel costs.

Meanwhile, unionized workers who, for long stretches of their careers, get two raises a year quickly end up making more than their superviso...

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