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Opinion

Opinion

The growing public-private wage gap

December 4, 2010

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A Lawrence resident who’d lost his job in the current recession might have been miffed to read about city employees getting a “longevity payment.” And a fan of fiscal responsibility might have felt a flicker of disbelief when he read that this lagniappe was to be paid for by dipping into the city’s savings account. Discussions dwelled on what a good job city employees were doing given the challenges they’ve faced, among which “cuts” and “scrutiny” were mentioned. Perhaps these challenges were deemed more onerous than those which workers in the private sector have endured.

One commissioner gingerly raised the issue of rewards for mere longevity rather than performance. Another allowed that relative to other area cities, Lawrence is “pretty much the most generous of anybody around.” Beyond that, the apparent consensus was that city employees are special and are entitled to benefits that the rest of the nation’s workers don’t enjoy.

If Lawrence were a business operating in hard times, the bonuses would be history. But governments aren’t run like businesses. Different rules apply. This isn’t to single out Lawrence, however. Longevity is the standard by which public service employees everywhere are rewarded. Municipal and state governments nationwide have been making extravagant wage, retirement and health care commitments to their employees. Taxpayers are left holding the bag.

Wages of public servants have outstripped private sector wages in recent years. Public employees earn salaries that are about one-third higher on average than private workers, according to the Wall Street Journal. Benefits are 70 percent higher. In California, public employees can retire at 55 with an effective retirement account worth $1 million, according to Gov. Arnold Schwarzenegger. Over the past decade pension costs for California public employees increased 2,000 percent while revenues only increased 24 percent.

A train wreck is on the way: Government pensions nationwide are underfunded by an estimated $3 trillion. If public employees were paid according to private sector standards, states and municipalities facing bankruptcy would be solvent.

A curmudgeon might be tempted to say that public “servant” has become an oxymoron. The true servants in this equation are the taxpayers. A dangerous conflict looms between two classes — those who work for the government and those who don’t. Public sector workers comprise a powerful lobby with a vested interest in the growth of government and no motivation for controlling costs or pursuing efficiency. If you want an idea of where this ends, consider France, where almost half the country works for government. When their jobs and benefits are threatened, they go on strike and have demonstrated a willingness to bring the country to its knees rather than give an inch.

In our country, reform by political means seems to be impossible. Powerful interest groups are unwilling to give up any advantage for the common good and politicians are unwilling to cross them for fear of losing their votes. Fortunately, reality and market forces eventually intervene. At some point, the money that enables reckless spending simply isn’t there. Bankrupt Greece has recently cut public sector pay and lowered pensions. Latvia has cut public employees’ pay by 50 percent. We may be nearing that point.

President Obama, who’s politically indebted to public service unions, has suggested a pay freeze on federal workers’ wages. A representative of the American Federation of Government Employees called this “a slap at working people.” But an unemployed worker in the private sector might say Obama’s proposal is a good sign, a miracle of sorts, maybe even an occasion for audacious hope.

— George Gurley, a resident of rural Baldwin City, writes a regular column for the Journal-World.

Comments

just_another_bozo_on_this_bus 4 years, 2 months ago

"Public employees earn salaries that are about one-third higher on average than private workers, according to the Wall Street Journal."

Actually, the Wall Street Journal and other stalwarts of right-wing propaganda had to do a lot of comparisons between apples and oranges to arrive at that figure.

When like professions are compared, government salaries trail private salaries by about 20%, and the more experienced the workers are, the higher that disparity gets.

But we've come to expect that George doesn't need much in the way of actual facts to support whatever thesis he decides upon for his little columns.

Phillbert 4 years, 2 months ago

You beat me to it.

"Study Finds Public Workers Make Less"

Source? The Wall Street Journal. http://blogs.wsj.com/washwire/2010/09/15/study-finds-public-workers-make-less/

Daniel Dicks 4 years, 2 months ago

Also, no mention of the "income disparity" between the middle class and the wealthiest 2% over the last several decades. I agree that public employees should experience temporary "wage freeze" like the private sector. But it is really small potatoes, a distraction, a shiny object for tea partiers to fixate on while the rich steal more public treasure.

tbaker 4 years, 2 months ago

The rich steeling public treasure. Do tell. Just exactly what do you believe belongs to the public that they are stealing?

George Lippencott 4 years, 2 months ago

Hey Bozo, same studies show that lower income public employees make more than their private sector conterparts. Truth in advertising

booyalab 4 years, 2 months ago

Yeah, I never really thought about it until you mentioned it. But right wing publications do tend to back up their assertions with research a lot more than left wing ones do. Good point.

beatrice 4 years, 2 months ago

And you support this bogus claim with what evidence exactly?

tbaker 4 years, 2 months ago

If it's propaganda, then don't just make the accusation. Show us the error Bozo. If you don't, then you be no better than what you accuse Mr. Gurley of. You won't seem to need any facts to support your little writings either.

Godot 4 years, 2 months ago

Washington Post is a propaganda outlet for the left. They admit it. Better find a better source.

just_another_bozo_on_this_bus 4 years, 2 months ago

So that means that you've read the piece, and can successfully disprove the information provided, right?

Bill Staples 4 years, 2 months ago

Bad data is never an impediment to ideology.

The real claim of George's waste of space is that public sector employees should be just as vulnerable, underpaid, and poorly treated as their private sector counter parts. That's American equality!

"Powerful interest groups are unwilling to give up any advantage for the common good and politicians are unwilling to cross them for fear of losing their votes." I agree. All that corporate money that has bought Congress will make sure that the "common good" is never considered and only corporate interests are defended while working people are screwed.

George Lippencott 4 years, 2 months ago

Well

Like it or not the public determines how much to pay public employees. If the public feels put upon they will reduce public employee income before they will pay higher taxes. Fair does not play!

Water 4 years, 2 months ago

If someone working in your field is earning more money than you, then apply for their job or run for office.

George Lippencott 4 years, 2 months ago

I can’t let this one go. I worked with public employees all my life. I am one. I could not help but note that senior level public employees were paid a lot less than their counterparts in the private sector. I also noted that there was a kind of revolving door where senior people moved into the government for a while and then left to make more money.

Some of the responsibility placed upon senior public officials whether we like it or not is awesome and very well reimbursed in the private sector. Perhaps if the government did less, there would be less of a problem. Do we really want an underpaid cynical employee making critical decisions in our ever-increasing regulatory world?

Lastly, remember faculty at KU are public employees. They have seen substantial salary increases in the last decade. Are they overpaid or not??

gl0ck0wn3r 4 years, 2 months ago

KU faculty also see non-monetary benefits like tenure and (some) summers off. Very few corporations offer jobs for life.

notajayhawk 4 years, 2 months ago

In response to claims such as boohoozo's from above, such as: "When like professions are compared, government salaries trail private salaries by about 20%, and the more experienced the workers are, the higher that disparity gets."

The figures put out claiming that federal employees make less are 'adjusted' numbers that have nothing to do with "like professions" or "experience". The figures used by the BEA show that in terms of raw dollars, federal employees make more in jobs that exist in both sectors. The BLS (probably could have done without the "L" there) claims that you can't compare them directly and made adjustments for such things as education level, length of service, and complexity of the work.

  • Education in this case is largely irrelevant. Browse the fed's job site; the typical job posting includes a requirement for a certain number of years' experience at the next lower grade level, for which education can be substituted. Also, quite often, that education does not have to be in a specific field, or anything remotely related to the job. Just because the fed chooses to hire a building custodian with a degree in forensic anthropology doesn't mean he should get paid more for that degree, especially when it would have been entirely possible for someone to be hired and to perform the job without one. There are some professions for which a specific, and usually higher, degree is required, however those are also a requirement in the private sector (e.g. physicians).

  • "Experience" and length of service are not interchangeable terms. There is no reason a nurse who's spent 15 years working for the VA should be making $10/hour more than someone who's been a nurse for 25 years, but only the last 10 of it at LMH.

  • There is a difference in the complexity of work, however, those are the jobs that tend to pay better in the private sector. Attorneys, pilots, IT professionals, all of those get paid higher in the private workforce than in federal employment.

  • The benefits for federal employees are more than four times what employees in the private sector get. The response of the federal employees and their unions to that is that the private employees should be getting those same benefits. Nice comparison.

  • The BLS report that claims federal pay is lower, and falling behind, was prepared by - federal employees. It was a report prepared for submission to the committee that decides federal employee pay raises. And I'm sure this was just a coincidence, but the geographic area where they found that federal employees lag the furthest behind their private sector counterparts is: Washington/Baltimore, where these same federal employees work. Go figure.

If you want to accept the word of federal employees who presented adjusted figures in support of pay raises for themselves as being a more accurate representation of the 'true' picture, be my guest. Oh, BTW, I'm pretty sure I can get you a great deal on a used bridge in New York.

George Lippencott 4 years, 2 months ago

NOTA

In statistics there are lies. Executive level federal position do not have more benefits than equivelant private sector positions (if you can define such). There salaries are lower. Few stay for very long in part because of that fact. General schedule federal employees depending on grade and speciality and counting benefits are mixed. Some skills are underpaid in comparison while many are overpaid.

We also need to consider that the federal civil service is in transition. Benefits are declining as new employees come on board (medial and retirement). Which retirement progranm was considered in the studies (if at all). New feds get whyat amount to a 401K just like many private sector employees. The medical program is basically what many union employees enjoy - if that.

notajayhawk 4 years, 2 months ago

"Executive level federal position do not have more benefits than equivelant private sector positions (if you can define such). There salaries are lower. Few stay for very long in part because of that fact."

Executive level federal employees also, for the most part, got their jobs because of seniority rather than ability or performance. As with the degrees, often that seniority is irrelevant to the position. A person who spends 10 years as an hourly in the extraction department of an IRS service center might get a supervisory position in the notice review department, for example.

And your argument is a double-edged sword. Yes, many executive level employees leave for the private sector because the pay is better. Often that means the ones who remain are the ones who couldn't get a job in the private sector. Seems kind of silly to reward their longevity on that basis.

George Lippencott 4 years, 2 months ago

Well you make the specific general. Where does your data come from to accuse a broad swath of our public employees of essentially being laggards? How do you know that all executive level employees (SES) were hired based on seniority.

In point of fact, many are hired based on politics (opps did I say that) or prior superior performance or even because they have been highly competent in the private sector in the field required. At those levels, the notion of a formula applying to hiring is very dated.

As a point in fact, SES employees do not have full civil service protection. If they are drones then the political appointees that run our government can fire them.

Civil service protection in general applies to only some of the work force such as general schedule employees (wage grade other special groups) and you can fire them because I have.

notajayhawk 4 years, 2 months ago

"How do you know that all executive level employees (SES) were hired based on seniority. "

If you have to ask, I have a hard time believing you're really a federal employee. This is a phenomenon that is hardly unique to the fed - the same practice applies to state and local governments as well. And, um, isn't one of the arguments of the BLS report that the BEA figures didn't take into account the general higher level of seniority of federal employees when compared to their private sector counterparts?

George Lippencott 4 years, 2 months ago

NOTA

You make lot of allegations about people. If you have no data except to challenge someone who has been there then maybe you should shut up.

I addressed the SES, if you even know what that is. My comments stand. I did not address the general schedule employees except to defend their work.

There is in fact a more pronounced sonority effect in the general schedule for the simple fact that people experienced in something are usually the most qualified to assume more responsibility in that field (true in almost all businesses). That said there has been in at lest some elements of the civil service a tendency in recent years to hire from without.

Sounds like you may be a disgruntled employee???

notajayhawk 4 years, 2 months ago

You make a lot of assumptions about people, George. I notice you have no data of your own, other than your personal observations. If that's grounds for 'shutting up', George, you can start at any time.

I have "been there", George, both as a federal and a state employee. And I'm far from disgruntled, in neither case did my employer want me to leave. I just don't enjoy working in an environment surrounded by systematic incompetence. And when I left both agencies I made the decision that was better for me and my family at those times.

Sounds like someone's a little touchy about their ability to perform in the private sector???

George Lippencott 4 years, 2 months ago

That which we pay them to create. They generate a lot of data that the government gives away but for which people would probably be willing to pay. They build things usually not for sale but for public iuse. They develop programs that are directed by and funded by our "law givers" who pay to get that information. They execute our laws and defend us. Just how muh is your freedom worth? Your comment is a cheap shot and you know it.

George Lippencott 4 years, 2 months ago

No NOTA I asked a question. Please provide the data that supports your statement that the better g-men and women leave with the less capable remaining.

Note: I pointed out the inconsistency in the original quoted data that it hid the fact that the upper end (I chose that to be the SES) is paid below market rates (basically undeterminable) while the lower paid civil service is paid more than the market pays equivalent skills. We have no argument there. The argument is about generalization as to work performance.

notajayhawk 4 years, 2 months ago

And your own data disputing that was where, again, George?

I could post my own litany of personal anecdotes which would have no more bearing than yours. I know what my own experience was. Yours might be different, but then, you're still a federal employee.

George Lippencott 4 years, 2 months ago

NOTA

Hey Bozo, same studies show that lower income public employees make more than their private sector conterparts. Truth in advertising

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