Along with anticipating potential pay raises, Leslie Scott, executive director of the National Association of State Personnel Executives, says more of her members are looking at some of the underlying concerns with compensation systems. One of the more prominent issues is finding the right mix of pay and benefits. Although most states still offer competitive benefits, their cash compensation often lags so far behind the private sector that it’s difficult to attract and retain talent. In November, for example, the Oklahoma House appropriations committee held hearings to discuss how the state’s compensation system was “out of whack.”
The Fed reacted to the Great Recession with a large scale increase in the monetary base. This creates expectations ranging from runaway inflation to a concern that a recession will follow. Many have moved to the investing sidelines as a result of the uncertainty. The response to money is more credit at low interest rates. The net outcome depends on whether this stimulus results in real investments that generate income streams that retire the incurred debt. If the real investments do not pay for themselves, there is only short term gain and long term pain.