The Reckoning

My new TIME Magazine story investigates what government workers actually do all day long and whether they are actually overpaid. If you are not sure which side to love or hate in the Wisconsin imbroglio, this is the story for you. (If you are convinced in the purity of the unions or the righteousness of the governor, then I’d suggest reading something else. Or breathing deeply.)

After talking to many people, reading a lot and listening earnestly to both sides, I concluded that they are both wrong. There’s a third way, and there’s never been a better time to finally take it…

The opportunity before us is not to shrink or grow government: it’s to make it smarter. Over the past three decades, nearly every other job in America has gone through the productivity wringer. Starting with manufacturers and moving through retail and professional services, we have had our jobs galvanized by technology, stripped bare by efficiency metrics and honed by competition. It has been a grueling journey, but it’s the primary reason America still has the largest, most prosperous economy in the world.

Now it’s the government’s turn. If we seize upon this crisis to make basic changes—to start rewarding public employees in part on the basis of how effective they are, for example—we could do more than just stabilize our budgets; we could raise our entire economy.

For now, the efficiency gap between the public and private sectors is holding us all back. The U.S. ranked 68th (out of 139 countries) in terms of wastefulness of government spending in the 2010-11 World Economic Forum report on global competitiveness. Experts put our public-sector productivity about 10 years behind that of the rest of our workforce. If public workers could halve that gap, the annual savings would ring in at $100 billion to $300 billion, according to a new study by the McKinsey Global Institute. That would mean the equivalent of a recurring stimulus package every three to eight years.

GeneralAmanda Ripley