How often have you heard this story:
The average government worker earns way more than the average private sector worker, and this is de facto evidence that government unions have too much power over elected politicians who lack backbone to stand up to them.
Anti-government columnists, newspapers, think tanks and foundations love to churn out reports that conclude the comparison of so-called averages proves that government employees are overpaid. They then seek redress in various ways, from rolling back public sector pay to tying the hands of public sector unions and sometimes elected officials too. Even special taxes for government workers and retirees have been proposed. All the while whipping up public distaste for government workers, especially in these times of economic stress for so many in America.
I have wondered about these studies. I wonder if the average worker at Boeing makes more than the average US private sector worker? How about at Children’s Hospital? Or Microsoft? Or USC? Or Google? I suspect the average at these places of employment is indeed higher than the average private sector wage throughout the nation, yet I see no clamor about that kind of so-called inequity. This has led me to conclude that those attempting to whip up public anger about government worker pay are comparing apples to oranges, and that average-to-average comparison of any part of the workforce is pretty meaningless. Their agenda is anti-government, not objectivity. I have wondered if there is not an objective study of this subject out there somewhere.
Now maybe there is. A new study has surfaced. It was done in New York state jointly by the Center for State and Local Government Excellence (I know, some will say that very name is an oxymoron) and the National Institute on Retirement Security. CNNMoney.com reported on April 28 that this study concluded that the average State and local worker earns less than their private sector counterparts and the pay gap is widening. This study had another interesting finding – even though public sector workers are better educated – 48% have college degrees compared to 23% in the private sector – public employees see lower pay. They do see higher benefits, however.
Aha, you say – those darned benefits! This New York study concludes benefits such as healthcare and retirement programs comprise 32.7% of total pay for public sector workers and 29.2% for private sector workers. But, even when accounting for these benefit differences government employees’ total compensation lags that of the public sector.
You may agree with the points made in this blog post, or you may disagree. Whatever your view, you would be well advised to steer away from anyone using averages of the universe to try and prove that the average of a portion of that universe is out of line.
Check the wages of any Gov worker in any O.C. city or at the County.
Oh, boy, a big government group produces a study that doesn’t deal with massive unfunded pension liabilities (those costs aren’t counted in the figures) and tilts the formula to compensate for the supposed better education of public employees. Nor does it seem to deal with pension-spiking schemes and other pay-boosting strategies not available to private sector workers. It also is at odds with most other research and it goes back in its study for two decades when most of the vast pay and benefit hikes have taken place in the past decade. But, come on, I don’t know a single private sector worker with a 2.7 at 55 or 3 percent at 50 retirement. I know hardly any with any form of defined benefit plan — and virtually every public employee has one.
Every gubmint employee has tax paid health insurance worth 4X the private sector. Federal wages have grown 38 percent in five years as opposed to 14 percent in the private sector. More startling, Since 1990 average compensation for federal workers has increased by 129 percent, the BEA data show, compared with 74 percent for private-sector workers.
HAHA goodness, just from my experience serving on several OCC budget committees, salaries and benefits are like the forbidden fruit that must never be touched. While in deliberations about how to deal with the 10 million campus deficit, the admins made it clear that salaries and benefits were off the table. And since i was the only nonemployee on the committee (im a student member) I was the only one to suggest an adjustment of salaries to a more sustainable level (salaries comprise 90% or our budget) and i was quickly shut down by the multiple union reps present at the meeting. Just saying, I have observed an incredibly strong union power grip permeating at least the public education sector.
Dock workers on average make over $65 per year. Who eles makes that much with just a G.E.D.
education.
Appreciate everyone’s comments. My personal opinions are:
1. Defined benefit programs in government will go the way most of them in the private sector have gone – phased out. For instance, IBM and United Airlines defined benefit programs are gone. A decade from now many in government will be gone too. So-called public safety government employees may be able to hang on to defined benefit plans, or at least be the last to see them go.
2. Just as Mr. Greenhut challenges this study as biased and incomplete and thus flawed and following a pro-government agenda, others similarly challenge the studies of Libertarian think tanks and writers that coincidently seem to support those organizations’ anti-government agenda. Imagine that.
Throwing in pension spiking schemes into the mix, which to me do seem in many cases to be an abuse though apparently legal, simply avoids the issue of comparing work compensation. You throw in pension spiking abuses, someone on the other side thorws in bonuses and writing off personal expenses as busness expenses on income taxes. It seems everyone tries to game the system.
And, the issue of “massive unfunded pension liabilities” is more a functon of fuzzy math attempting to forecast the volatile drivers of costs 30 years ahead than it is a reality. I think a good part of any existing unfunded liabilty can be laid at the feet of Wall Street firms that have produced the current economic collapse. Perhaps there will eventually be some criminal liability assigned along with investment loss restitution orders that will at least partly make investors, including pension funds, whole for their losses from the unsavory goings on in Wall Street that seem to be exposed almost daily.
3. Irvine Reporter – sounds like you have experienced the clout of organized labor. It indeed is a reality ever since JFK opened the door to mandatory collective bargaining in government by his executive order of 1962 that gave federal employee unions the right to bargain collectively. Subsequently this was expanded in California to state, school district and other government employees by several decades of State legislation signed into law. I read recently that there are now more unionized government workers than unionized private sector workers.
4. National Libertarian Examiner – assuming your statistics are correct, they prove nothing. The comparison of the end result is what counts. And, every government employee does not have tax paid health insurance – some do, but some have to pay for part of the monthly cost themselves, sometimes amounting to hundreds and even thousands of dollars a month for the employee and dependents. A one size fits all generalization that all have tax paid health coverage is just untrue.
5. Beebo – do you mean $65,000 per year? It is unclear as written.