Big Profits From California’s Public Spending

State and local government employees in the United States will collect more than $1 trillion in compensation and benefits this year, more than any other recipient of state and local spending. Pharmaceutical, healthcare and defense corporations garner a similar magnitude from federal spending. Union and corporate managements work hard to keep that money coming, mostly by spending money on elections and lobbying. In California, government employee unions spend more than anyone else. They get results.

For example, this year California’s legislature and governor will approve $7 billion in salaries and benefits for the 55,000 employees of California’s prison system, which houses 128,000 prisoners. In contrast, the legislature and governor will approve only $3.5 billion for the University of California, which serves 238,000 students. The difference is political power. As reported in the LA Times, prison employees got a new contract in 2011 after targeted political spending and have received two new contracts since then. No one profits more from California’s Penal Code. In the meantime, UC’s share of state spending has declined 20%.

Public employees are good people doing important jobs. But like employees of pharmaceutical, healthcare and defense corporations, they profit from public spending and want to keep those profits coming. Absent opposition, those corporations and unions will continue to increase their shares of government spending at the expense of students, citizens and taxpayers. That opposition takes the form of legislators who support the public interest. They get elected with the support of political philanthropists. Until there are limitations on political spending by unions and corporations that profit from government spending, political philanthropists must step up.

Written by

Lecturer at Stanford University and president of Govern For California

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