Wisconsin public versus private employee costs: Why compare apples to oranges?



Jeffrey H. Keefe

February 15, 2011



Inaccurate comparisons of national and Wisconsin public employee compensation with private sector compensation are circulating in Wisconsin. These faulty comparisons, showing that public employees in Wisconsin are dramatically overpaid, seem to support legislative efforts to increase benefit contributions by public employees. These increased benefit contributions would subject them to a pay cut greater than 10% and eliminate their collective bargaining rights.



But when we compare apples to apples, we find that Wisconsin public employees earn 4.8% less in total compensation than comparable private sector workers. The comparisons -- controlling for education, experience, hours of work, organizational size, gender, race, ethnicity, citizenship, and disability -- demonstrate that full-time state and local public employees earn lower wages and receive less in total compensation (including all benefits) than comparable private sector employees.



Why does it appear otherwise? Both nationally and within Wisconsin, public sector workers are significantly more educated than their private sector counterparts. Nationally, 54% of full-time state and local public sector workers hold at least a four-year college degree, compared with 35% of full-time private sector workers. In Wisconsin, the difference is even greater: 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.



These stark educational differences arise for two reasons. First, many public employees are professionals and teachers in positions that require higher levels of education. Second, the movement to privatize public sector work has been accomplished in great part by moving low-skilled work from the public to private sector, where benefits are often more modest.

cepr

CENTER FOR ECONOMIC POLICY AND RESEARCH



David Brooks on Wisconsin: Flaunting Ignorance of Economics



Tuesday, 22 February 2011 05:38



Let's all have a hearty round of laughter at David Brooks' expense. He doesn't know that employer side payments for benefits like pensions and health care come out of workers' wages. In his column today, he tells his readers that public employees in Wisconsin should have to pay for these benefits just like private sector. Apparently he doesn't know that they already do.



Go into any economics department and tell the faculty that you think employers should have to pay more for workers' Social Security benefits. The ridicule with which which that suggestion will be greeted should be heaped on Mr. Brooks for failing to understand basic economics. And of course, we actually have data that show that the higher benefits received by public sector workers in Wisconsin are more than fully offset by lower pay.



Of course the bigger mistake in Brooks' column is the assertion that we are looking at a decade of austerity. This may prove true, but this is a policy choice. We had unbelievably incompetent economic policy in the last decade. The Fed and the Bush administration allowed (arguably encouraged) the growth of an $8 trillion housing bubble. It was fully predictable that it would collapse and lead to a serious recession.



Unfortunately, economic policy continues to be guided by people who were too incompetent to recognize this bubble and the danger it posed. The route out of this downturn is simple, the government needs to spend money to create demand. This is the economy's problem at the moment, not a scarcity of resources. However, the incompetents control the debate and are now promising us a decade of austerity rather than taking the simple steps that would be needed to get back to full employment.

he wants to remain in the Senate to fight for conservative principles.



"There is a battle to be waged over what kind of country we are going to leave our children and grandchildren, and that battle is happening now in Washington, not two years from now," Thune said in a statement. "So at this time, I feel that I am best positioned to fight for America's future here in the trenches of the United States Senate."

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This morning on the radio I caught some chatter about the imminent release of New Jersey Gov. Chris Christie's second budget. The correspondent being interviewed raised the interesting point about the governor'sbudget: that one of the crucial ways in which he "balanced" it was by simply ignoring the state's accumulated unpaid $3 billion pension obligations.What right-wing New Jersey pols -- and their union-bashing fans in the punditocracy don't like to mention is that the pension benefits in question, going back to the administration of Republican Gov. Christie Todd Whitman , were negotiated in totally bad faith in exchange for union concessions on salary and other direct benefits. Apparently the union negotiators at the time had a glimmering that the state had no intention of honoring those pension commitments but felt that the make-believe pension "gains" were better than nothing. The reality seems to have been that they were exactly nothing.Aas I understand the story, the intervening Democratic governor, Jon Corzine, at least acknowledged the problem of the state's pension nonfunding, though he couldn't quite find money with which to do anything about it. With Republicans, however, there is no such thing as honoring legal commitments where the objects of those commitments, like people who do actual work for the public good, are also objects of your contempt.At the time of the economic meltdown, as word trickled out about the stupefying bonuses being paid to the already wildly overpaid scum who had worked so hard to bring the system down, we were told earnestly that there was nothing to be done about it, it was a legal and moral obligation to pay the thieves and extortionists for their honest year's worth of theft and extortion. When it comes to workers who negotiated in good faith, organized criminals like New Jersey's blimplike governor have no qualm about spitting on the state's legal commitments. Just as his fellow thug-governor Scott Walker in Wisconsin feels that he has the right to simply nullify basic rights of workers to negotiate their conditions of employment.Both Howie and I have been talking, as well as people like Paul Krugman and George Lakoff , have been talking about the subterfuge being used by the militant economic thugs of the Far Right, pretending that they're responding to the urgencies of the economic meltdown -- the very meltdown their thieving economic policies caused -- rather than using them as a pretext to enforce the Darwinian extreme-right-wing agenda they've always lusted after. And we'll have to continue talking about it. But for now we just need to touch on some of the basic lies being brandished by the thugs of the Far Right, as great thinkers David Brooks and Richard Cohen weigh in on how those evil public-sector workers have been plundering the American taxpayer.Every word is a lie, of course, but that doesn't seem to matter. Apparently pundits too are covered under the right-wing Universal License to Lie, which grants blanket permission to utter any lie, no matter how far-flung or preposterous, in the service of the Higher Untruth of Right-Wing Sociopathology.First, let's pay a quick visit to reality, courtesy of Jeffrey H. Keefe of the Economic Policy Institute:If the dominant pundits of our time were to put their itty-bitty brains together and set up a Pundits' Academy, if they exhibited a shred of honesty in designing the curriculum, you can be sure the course work would be organized around a series of core courses: Knowing Which Side Your Bread Is Buttered On 101, 201, 301, 401, and a complex of advanced seminars. Every now and then Richard Cohen writes a column, or more often a portion of a column, that suggests there might still be, lurking in the depths of his shadowy mind, a few cells that on occasion still receive and process limited sensory data from the real world. Which just means that the man has to work harder the rest of his thumb-sucking time to make sure none of that heresy sticks.It's harder to catch David Brooks in contact with reality. In his plodding way he's much more true to his fundamental personal reality, which is that his working life is wholly dedicated to licking the dicks of the Rich White Men who own the country, thereby making it possible for someone like him, with no visible professional skills, to earn a living. Meanwhile, under his standard pretense of reasoned moderation (of Wisconsin: "The leaders there have done everything possible to maximize conflict" -- no, Davy, that's not what has happened), he spews the standard right-wing kill-the-unions line. As Dean Baker points out in a post today:The TPR crew does its usual excellent job backgrounding and distilling the subject in today's report If that's "good news," the bad news is that, as the Washington Post's "Fix"-er Chris Cillizza reports

Labels: David Brooks, Dean Baker, Richard Cohen, Right-Wing Noise Machine