Bonuses to Government Officials? Revisited

Since posting of my earlier message, I had occasion to reflect further on the appropriateness of bonus awarding. This resulted in a reinforcement of the hypothesis that they generally are unjustified.

A person agrees to render services for a specified compensation. He then performs his obligation and a benefit, theoretically at least, is realized by the person with whom he contracted. If the benefit is greater than might have been anticipated, and if this might be due to the ingenuity and perspicacity of the service renderer, is not the result and is not the nature and extent of the services but the scope to which these parties earlier agreed? If so, why is the one due anything more than what he agreed to accept? (Though the dynamic and principle is different, one could look to Matthew 20:1-16 to see a parallel scenario.)

But, for argument, let us accept that a bonus might be able to be justified in an activity performed in the For Profit Arena. While it should be carefully structured because of the great possibility of abuse if loosely granted and administered it might be permissible under limited situations where a significantly greater-than-expected result is produced. But is this what is expected in the Governmental Arena?

Here, the dynamic and principle is to unilaterally provide benefit to the citizens, without a corresponding benefit to the government; a government exists only to do what the citizens cannot easily and efficiently do themselves, and thus it is to serve, not to itself benefit.

Further, because it is the agent of many, it has been delegated extraordinary power, that must be carefully controlled and exercised. Authorizing bonuses for its personnel, because a personal benefit would be received by them as a consequence of the performance of their duties, only encourages potential excessive and onerous exercise of this power, even though the dominant principle is to confine and restrict exercises of power, as being fatal to liberty.

Hence, for both these reasons also, allowance of bonuses to government officials is even more obviously wrong and impermissible.

WAYNE A. SMITH
Forester Twp, Michigan USA
14 May 2014

Bonuses to Government Officials?

Only recently has it come to my attention that certain government agencies provide bonuses to certain of their employees. To say the least, I was astounded and shocked!

On what basis could a public agency justify providing bonuses? Now, the answer may be given that private enterprises not infrequently do provide such extra compensation. But those private enterprises (or most of them) are, by definition, profit-making ventures; their purpose, in addition to providing a valuable product or service, is to make money.

The only reason for the existence of a government agency is to perform functions that its citizens are unable to, or at least can only inadequately, perform for themselves. Thus, its purpose is but to minister in the interest of and upon behalf of its citizens. Consequently, private enterprises and government agencies have different characters and postures, and thus must need be organized on different principles.

Perhaps most saliently the private enterprise is paying bonuses from its own monies; and its shareholders have the capability to directly control awarding, or not awarding, such compensation. The government agency though would be paying these bonuses from someone else’s money, that is, from the pockets of its citizens. And who could possibly say the citizens have the de jure, much less de facto, power to countermand such awards?

Yet someone may say: But certain of our officials perform long, arduous service and thus are entitled to this extra compensation. If so, might not the answer be to appoint additional personnel and divide the work between them?  so that the volume of work is now more in proportion to the compensation? Not only would this seem to resolve the putative objection, but would have the further salutary benefit of allocation of authority between numerous officials and, thus, division of power.

WAYNE A. SMITH
Forester Twp, Michigan USA
27 April 2014

Unity = Difference ?

 

Reading 1 Cor 12:12-26 this morning reminded me of a comment last night at our Lenten Study session to the effect that individual interpretations of Scripture are permissible and sanctioned; this would, I suppose, be consistent with the “Priesthood of Believers” principle. This passage from First Corinthians does appear, to some extent at least, to corroborate this opinion.

All the disparate members of a body remain part of it. The whole does not have an identity nor is it viable without its different parts. Unity then exists in difference; and the difference in opinion is an inherent part of and sustains the entity.

But is this not because we are congenitally and inevitably imperfect? We may strive but are unable ever to attain perfection. Yet perfection remains the goal and Eph 4:13-16 instructs us that maturity and growth into a unity remains the objective. Thus, difference of opinion would then cease to exist.

Growth beyond difference of opinion consequently is the ideal dynamic. Yet in this world it remains but the standard upon which we should focus and toward which we should strive, with the affliction of differing interpretations being that with which we are presently encumbered.

WAYNE A. SMITH
Forester Twp, Michigan USA
3 April 2014

Income Inequality / MINIMUM WAGE

Various discussion has recently been generated over the issue of “income inequality”. Ancillary to this has been controversy over the practical repercussions and moral posture of an increase in the Minimum Wage. It is possible that in the noise some perspectives have been ignored. (One which the writer believes can be ignored is the effect or lack thereof on income equality from such an increase, since to this individual it seems clear that any effect would be de minimis.)

In analyzing the questions we should first consider: Who is the Minimum Wage intended to benefit? It would seem a fair conclusion that it is those who are only marginally skilled, either by being new to the work force or by not having had the opportunity or inclination to develop any skills other than the rudimentary. Thus, it would seem that most persons would or ought to be relegated to this category only for a relatively-brief duration. (For those who do not have the capability to develop these skills, due to various physical, mental or psychological deficiencies, there should be provided some type of permanent financial support; since this, hopefully, will only be a small segment, its effect on diminishing overall resources should not be controversial.)

Now, would an increase in the Minimum Wage have the intended effect and the desired efficacy? It may well be doubtful since, by definition, it would only benefit those with marginal skills. The basic and introductory premise, it would seem, is that those with these marginal skills have the least job security since they would most easily be able to be eliminated and replaced, and would only be supplying a limited benefit to the employer. Can we now, from this perspective, further analyze these questions?

This limited benefit to their employer necessitates a conclusion that these employees are of marginal value to the employer. As the differential between the value and the cost to the employer is thus narrow, any magnification of the cost will be material. And if the cost is increased too much so that the cost exceeds the value, the employer may decide termination of these employees, and the investigation of alternatives, is required.

Even if the differential is only narrowed — with the value of the employee still exceeding the cost it is likely the same result will be yielded. For marginally-skilled employees, because of their minimal level of abilities and consequent similarity between equivalent employees, are relatively fungible. Now, even if the differential in value is somewhat diminished, the employer may still continue the relationship out of convenience, habit or tradition. But if the differential between value and cost narrows too much, an exchange for an employee who may be more compatible with the position and of more value may be more easily justified. Thus, the inherent dubious tenure of these employees will be threatened even more under such a regime, viz, where the Minimum Wage is significantly increased.

The above examination of course has proceeded from the position and perspective of the absolute and relative attributes of the employees. It should be at least equally pertinent to consider the position and perspective of the financial status and considerations of the employers.

To this writer it would seem the type of employer who might most often utilize the marginally skilled are also those who experience only marginal profitability. For more skilled employees are of course capable of performing more efficiently and at a higher level of quality. If a person is operating at sufficient profitability, it would normally then be expected they might seek the more qualified (as long as they are not overqualified) employees. If the employer utilizes instead the marginally skilled, it is likely due to it being unable to afford higher-value employees due to their own marginal profitability. Now, if the cost to them of these employees increases, they may be faced with the prospect of becoming unprofitable, resulting in either elimination of some of their current employees or termination of their operations. In either event, the already-questionable tenure of this class of employees becomes even more tenuous.

Thus, it is doubtful that an increase in Minimum Wage levels would in fact attain its objective. Nevertheless, I perceive there being a sound policy that would support and induce such a change. And this would be the pressure it might exert to eliminate or at least reduce so-called Economic Stimulus programs.

A switch of activities or programs to attain this objective from the governmental sector to the structures within society already would be salutary indeed. If this were to result in private, rather than public, organizations being the ones to help others up by their bootstraps, then such a change in policy certainly would be most beneficial.

Now, one could attempt to condition a Minimum Wage increase on an offsetting reduction in appropriations for Economic Stimulus programs. However, it may be sufficient simply to induce a change in the mentality of recourse to resources looking first to and relying upon the private sector by resort to employers rather than government agencies for magnification of disposable income. Thus, even if their is no immediate reduction in governmental expenditures, adoption of such a change in attitude ought to justify obstruction of or even reduction in later expenditures for, much less enhancement of, these programs since the objective thereof ought already to have been attained by the greater disposable income flowing from the private sector. I consequently would think such a Minimum Wage increase should be supported for the above reasons; the conclusion that the purported income inequality reduction argument is merely a phantasmal exercise without weight or logic should not be deemed a reason to refrain from pursuing a policy that has its own good and sufficient rationale.

WAYNE A. SMITH
Forester Twp, Michigan USA
3 March 2014