This Is Neither Effective Deficit Reduction Nor Personnel Policy

Wed, 04 Aug 2010 14:11:39 +0000

I hate the idea of salary freezes.  In one sentence:

If you freeze salaries, then only the people who don't deserve a raise get the raise they deserve. 

Everyone else gets less, and the discrepancy is widest for the most productive people.  Who decided this was an effective personnel policy?  Why is it that when institutions are strapped for cash, they pay less attention to how they allocate their resources?  When cash is scarce, we should spend our money more intelligently.  What is intelligent about a compensation policy that fails to differentiate based on performance?  Reduce staff.  Set the baseline raise at a negative number.  Do something, but don't force those who merit additional compensation to subsidize those who don't.

Here's the relevance today.  The first two paragraph's of Scott Wilson's Washington Post article on the freeze on bonuses are these:

President Obama ordered a freeze Tuesday on all bonuses and other monetary awards to federal political appointees, saying: "Like households and businesses across the country, the federal government is tightening its belt."

Obama is under intense political pressure to close the federal budget deficit, and a presidential memo he issued Tuesday night is the latest in a series of personnel decisions designed to help do so.

If you make your way down to the fifth paragraph, you find this:

White House officials estimate that 2,900 employees will be affected by the order, which is projected to save the government $1.9 million a year.

So even if the savings were 1000 times as large, they would still not amount to substantial deficit reduction.  I can figure out why Obama says what he does -- he's a politician.  I cannot figure out why Wilson writes what he does.