Apples to Apples: Public workers make less
The Rio Grande Foundation, in its much-ballyhooed private vs. public compensation paper, notes that New Mexico public employees are paid, on average, 11.5 percent more than private sector counterparts — including all benefits. What they don’t mention is that there are very few part-time fry cooks in state government. There are very few minimum wage jobs in the public sector.
Public-sector workers tend to make a career out of their jobs, because unlike the very fluid private sector, things like providing clean water, being a firefighter, or being a probation and parole officer don’t change. The demand is always there, and these are things that the private sector has not been able to provide effectively — market forces and the nature of the work preclude private companies from being in these fields.
One debunking study
As a result, workers in the public sector are older. They have more education and experience. Using data from workers in New Mexico aged 18-64, from 2003-2009, only 24.1 percent of private-sector workers have a college degree or more. 46.5 percent of public sector workers do. The median age of that same set of workers was 40 years old in the private sector, 43 years old in the public sector.
When you compare apples to apples, public sector workers actually make 4 percent less than private sector workers.
Compare this highly detailed, statistically relevant, well-explained paper to the ideologically charged, conclusions-first approach of the RGF.
Further, even if you include benefits, which are indeed often better in the public sector, workers in the public and private sectors’ total compensation is almost identical. And that doesn’t include the fact that about 30 percent of all public-sector workers in America don’t get Social Security (in fairness, most in N.M. do, but since these are national studies, it’s worth mentioning).
Just read the two papers and it’s clear that one group has done their homework and explains how it compares apples to apples, while the other merely parrots ideological talking points.
OK, maybe that one study dismantling the RGF’s positions was a fluke. Maybe for all of its detailed statistical regression analyses, they missed a big point. I’d love it if some economists, particularly conservative economists, could point out where they’ve gone wrong specifically like I’ve done with RGF data. (I’m not a professional economist, but took a lot in college and law school and certainly have the basic math and common sense to take apart their flawed “conclusions.”)
Two might be a coincidence
Let’s bring in yet another study that bothers to compare apples to apples. This one, from the Center for State and Local Government Excellence, relying on U.S. Bureau of Labor Statistics, concluded that state and local government employees make 11 percent less and 12 percent less, respectively, than their private sector equivalents in wages and salaries. Even including the generally-better benefits packages for public sector workers, state employees are still 6.8 percent behind private counterparts in total compensation, and local government employees lag 7.4 percent behind comparable private sector employees.
Three’s a pattern
The Economic Policy Institute recently published a third study, this one also including wages and all benefits, showing that the public sector lags behind the private sector when comparing apples to apples. The average compensation (including benefits) penalty in the public sector is 3.7 percent, averaging 1.8 percent for local government and 7.6 percent for state government.
Of course, there is much political demagoguery over the fact that public employees have health care and retirement. Here’s a great quote from Jon Cohn at the New Republic about what all the public employee benefit hand-wringing means:
“Also, as Dean Baker of the Center for Economic and Policy Research points out, many public employees don’t get Social Security. Overall, he says, “most public sector pensions do not provide retirees with an especially high standard of living.” Exceptions to this rule frequently include firefighters and police, particularly in New York. Then again, they risk their lives to protect the rest of us from lethal threats, which is more than you can say for CEOs like the former telecom executive who in 2007 retired with a $159 million benefit package.”
When you consider that apples-to-apples studies show that public employees earn less than their counterparts in the private sector, even including benefits, it’s clear that the current scapegoating is nothing more than that: trying to blame a minority group for a national downfall that, if anything, public employees worked to prevent and have helped to mitigate.
As the new administration and Legislature work to solve our budget crisis, hopefully they will take the words of the new governor seriously and apply concepts of “shared sacrifice” in closing budget gaps.
In other words, look to not only average working Joes, but also to the millionaires who continue to get a 42 percent tax break but who haven’t been asked to sacrifice in the slightest as politicians try to balance revenues and vital programs. Ask out-of-state and foreign companies to actually pay their real taxes, instead of allowing them to exploit loopholes to hide their New Mexico profits in Delaware and the Caymans. But don’t keep sticking the average working man and woman with the task of cleaning up a mess they had no part in making.
Bundy is the political and legislative director for AFSCME in New Mexico. The opinions in his column are personal and do not necessarily reflect any official AFSCME position. You can learn more about him by clicking here. Contact him at email@example.com.
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