Conservative Republican Media Claim That State Employees Earn More Than Private Workers
The Conservative Republican Wash. Examiner: "Total Compensation Costs Of State And Local Government Workers Was 44 Percent Higher Than Private Industry." A February 21 op-ed in The Washington Examiner claimed that "state and local government workers" were paid "44 percent" more than private sector employees in 2010. The op-ed, titled, "There is no right to collective bargaining," was written by David Denholm, president of the anti-union Public Service Research Foundation. From the op-ed:Rather than deal in facts, the Republican haters of the working class have decided to put on a 24/7 disinformation campaign that is reminiscent of the authoritarian groups that sprung up in early 20th century Europe. If they these far Right conservative zealots cannot handle the facts, what does that say about their motives and their character.
We might resent that [government is sovereign] when it comes to things like taxes but we need it when it comes to things like murder and mayhem. A sovereign institution might choose to seek input from interested parties about a decision, but when the decision is made, it is the law.
How different this is from a typical public-sector bargaining situation where the union makes demands and those demands are backed up by the threat -- whether legal or illegal -- of a strike.
There is a consequence to this distortion. According to the Bureau of Labor Statistics in 2010, the total compensation costs of state and local government workers was 44 percent higher than private industry; pay was only 33 percent higher but benefits cost 70 percent more. [The Washington Examiner, 2/21/11]
Kelly Claims There Is "Quite A Gap" Between "Salaries Of Public And Private Sector Employees" In WI. During the February 21 edition of Fox News' America Live, host Megyn Kelly followed live coverage of the ongoing protests at the statehouse in Madison by saying, "A closer look at the salaries of public and private sector employees in Wisconsin reveals quite a gap." A graphic showing "average annual pay" in Wisconsin in 2009 was then aired:
After reading the graphic, Kelly said: "What a difference. It used to be if you went to work for the state government, you would make less, but it was worth it, because you would have good benefits, good health care, nice fat pension, that kind of thing. So your salary would be lower. You can see from that full-screen we just showed you, that graphic, that that's no longer the case." [Fox News, America Live, 2/21/11]
Serial Liar and Draft dodging drug addict Limbaugh Repeats Discredited Claim That Public Employees Nationwide Make "Twice" As Much As Private Workers. On the February 17 edition his Premiere Radio Networks radio show, Rush Limbaugh claimed: "Taxpayers are paying public sector unions twice, on average, what the American employee earns. Pensions, welfare, benefits, the health care -- all of that stuff. Twice. Wages, salary, you name it." [Premiere Radio Networks, The Rush Limbaugh Show, 2/17/11]
EPI Study: WI Public Employees Earn "4.8% Less ... Per Hour" Than Private Sector Counterparts
EPI: "Wisconsin Public Employees Earn 4.8% Less In Total Compensation Per Hour Than Comparable Full-Time Employees In Wisconsin's Private Sector." A study published February 10 by the think tank Economic Policy Institute (EPI) found that when "[c]omparisons controlling for education, experience," and other factors are taken into account, "Wisconsin public employees earn 4.8% less in total compensation per hour than comparable full-time employees in Wisconsin's private sector." From the EPI briefing paper released with the study:
[T]he data indicates that state and local government employees in Wisconsin are not overpaid. Comparisons controlling for education, experience, organizational size, gender, race, ethnicity, citizenship, and disability reveal that employees of both state and local governments in Wisconsin earn less than comparable private sector employees. On an annual basis, full-time state and local government employees in Wisconsin are undercompensated by 8.2% compared with otherwise similar private sector workers. This compensation disadvantage is smaller but still significant when hours worked are factored in. Full-time public employees work fewer annual hours, particularly employees with bachelor's, master's, and professional degrees (because many are teachers or university professors). When comparisons are made controlling for the difference in annual hours worked, full-time state and local government employees are undercompensated by 4.8%, compared with otherwise similar private sector workers. To summarize, our study shows that Wisconsin public employees earn 4.8% less in total compensation per hour than comparable full-time employees in Wisconsin's private sector.
These compensation comparisons account for important factors that affect earnings, the most important of which is the educational levels of public employees. When comparing public and private sector pay it is essential to consider the much higher levels of education required by occupations in the public sector. As a consequence of these requirements, Wisconsin public sector workers are on average more highly educated than private sector workers; 59% of full-time Wisconsin public sector workers hold at least a four-year college degree, compared with 30% of full-time private sector workers. Wisconsin state and local governments pay college-educated employees 25% less in annual compensation, on average, than private employers. The compensation differential is greatest for professional employees, lawyers, and doctors. On the other hand, the public sector appears to set a floor on compensation, which benefits less-educated workers. The 1% of state and local government workers without high school diplomas earn more than comparably educated workers in the private sector. [EPI, "Are Wisconsin Public Employees Over-compensated?" 2/10/11]
EPI: "Workers With A Bachelor's Degree Or More ... Are Compensated Between $20,000 ... To Over $82,000 A Year Less" Than Private Sector Counterparts. The EPI report also included a graphic showing the average compensation for public and private sector employees in Wisconsin by education:
A February 18 post on EPI's website that highlighted this graphic stated: see graph at top.
The campaign against state and local workers is often justified with claims that they are privileged relative to their private-sector peers or have somehow been cushioned from the effects of the recent recession and slow recovery. These claims are clearly false.
In Wisconsin, which has become a focal point in this debate, public servants already take a pretty hefty pay cut just for the opportunity to serve their communities (Keefe 2010). The figure below shows that when comparing the total compensation (which includes non-wage benefits such as health care and pensions) of workers with similar education, public-sector workers consistently make less than their private-sector peers. Workers with a bachelor's degree or more--which constitute nearly 60% of the state and local workforce in Wisconsin--are compensated between $20,000 less (if they just have a bachelor's degree) to over $82,000 a year less (if they have a professional degree, such as in law or medicine). [EPI, 2/18/11]
Klein: "The Ones Who Got Played" In Wisconsin "Are The Public Employees." In a February 19 blog post, The Washington Post's Ezra Klein discussed EPI's analysis to argue that, in reality, it was the public employees who got the "bad deal" from the state government when negotiating their contracts. From his post:
The deal that unions, state government and -- by extension -- state residents have made to defer the compensation of public employees was a bad deal -- but it was a bad deal for the public employees, not for the state government. State and local governments were able to hire better workers now by promising higher pay later. They essentially hired on an installment plan. And now they might not follow through on it. The ones who got played here are the public employees, not the residents of the various states. The residents of the various states, when all is said and done, will probably have gotten the work at a steep discount. They'll force a renegotiation of the contracts and blame overprivileged public employees for resisting shared sacrifice.
Which gets to the heart of what this is: A form of default. There's been a lot of concern lately that states or municipalities will default on their debt. This is considered the height of fiscal irresponsibility -- an outcome so dire that some are considering various forms of federal support. But the talk that states or cities will default on their obligations to teachers or DMV employees? That's considered evidence of fiscal responsibility. And perhaps it's a better outcome, as defaulting to the banks makes future borrowing costs higher, and can hurt the state economy.
