I think this is a problem with both government and union jobs when salary and benefits are determined by legislators or union contracts rather than performance. A worker doesn't have a incentive to work diligently when he knows he's going to get the same salary & benefits as the next guy regardless.
This is one of the big complaints about teacher's unions which make it difficult to fire bad teachers because there is no penalty for poor performance. I know that by every measure the US public education system has declined greatly since the 1960s and now ranks well behind that of many other countries. I think the rise of teachers unions during this time is a major contributing factor.
I think the financial pinch we are in now may actually be therapeutic in the long run- and weed out many structural problems that have become ingrained in our system over the years, and when we finally get through this, a lot of dead wood will be gone and this is going to be a better country. Thrilling Discussions: POTPOURRI