Are Public Sector Workers Overpaid?

[Omaha Steve]

Run time: 09:22 https://www.youtube.com/watch?v=9mqIv3zN0Js   Posted on YouTube: October 25, 2010 By YouTube Member: TheRealNews Views on YouTube: 1322   Posted on DU: October 27, 2010 By DU Member: Omaha Steve Views on DU: 605

 

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=5767

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington. As the November elections are only a few weeks away, one of the debates that we are hearing is about the payment of state, federal, municipal employees, that public employees are just paid too much, and it causes too much taxes to be paid by everybody else, and that sucks money out of the economy that could have been invested more productively. What's the truth of this? Are in fact state and municipal employees paid too much? Now joining us from the PERI institute in Amherst, Massachusetts, is Jeffrey Thompson, who has done a study about just this, comparing the wages of state and local employees to the private sector. Thanks for joining us, Jeff.

ASST. PROF. JEFFREY THOMPSON, PERI, UMASS: Thanks for having me.

JAY: So what did you find?

THOMPSON: We found that if you just look at the wages paid in the private sector versus state and local governments, that at first blush it does look like there's higher pay for state and local governments. But that's only because state and local governments tend to employ much more highly educated workers and older workers. These are factors that drive the skill of the workforce. And once you adjust for those skill-related factors, the state and local government employees in fact earn less. So before the adjustments, the public sector workers get 13 percent higher wages nationally; after those adjustments, they get 4 percent lower wages.

JAY: So just to be clear about this, so it's when you take an average of everyone working in the private sector and compare it to everybody working at the state sector. You did a study specifically on New England, but you also reference studies that have been done in other states. Is that right?

THOMPSON: That's right. And we also do include some figures for the national level as well. Those figures I just cited to you, for example, are for the national totals. In New England, the unadjusted wage premium in the state and local sector is 11 percent. Once you adjust for skill factors, the wage penalty phase to the public sector is 3 percent, 3 percent lower wages if you work for a state or local government.

JAY: State and local governments tend to have older, more experienced, and more educated people, and they get paid more because of their qualifications, rather than the fact they're just in the public service.

THOMPSON: That's right.

JAY: Okay. So one of the counter arguments will be that it's difficult to get rid of people in the public sector because of unionization. And we know the public sector's more unionized than the private sector, so people tend to be there longer and older. Are they necessarily more qualified, I guess, will be one of the arguments.

THOMPSON: That's a point that can be raised, and that's fine, but I think the overwhelming factor that determines why there are older and more highly educated workers is the functions performed by state and local governments. The state and local sector does a lot more work in higher education and public education. That's the reason for the credentials being there, and it's also a good reason for the experience, and so the older workforce. If you want to raise issues, I think any local government has a premium on providing services efficiently and wants to be able to have a productive workforce. So those issues, I think, are relevant. But that's not the driving factor behind the wages that are earned by workers in those sectors.

JAY: So let's assume that people do urban planning and more complicated budgetary issues and all the more complex functions that take place in the public service. Let's assume that they're more experienced, more educated, and deserve more pay. And what you're saying, in fact, if the same people doing similar jobs in the private sector, that they're actually getting paid and compensated less in the public sector than in the private. But let's put them aside for a moment. What about less skilled starting wages? How does that compare between public and private?

THOMPSON: The lower-skilled workers in the public sector do earn a little bit more than their counterparts in the private sector. In New England, for example, if you look at the 10th percentile of the wage distribution—so these are the lower-skilled workers—for example, public sector workers earn 5 percent more than their peers in the private sector. If you look at educational credentials for the US average for workers with just a high school degree, they're going to earn 2.5 percent more in the public sector than in the private sector. So there is a small wage advantage for lower-skilled workers. But before we make too much of that premium, I think it's also important to consider what those wage levels actually are. So, for example, at the federal level, at the 10th percentile, the wage distribution, the actual wage being earned is $8.25 an hour, and if you're in public sector, you earn 5 percent or 6 percent more. So at the bottom end there's a bit of a boost in the public sector, but it's very low wages.

FULL story at link.

[stray cat]

1. And since we pay them and they work for us are we willing to make sure we keep paying them

And don't renege on paying for their pensions and sacrificing whatever is necessary to ensure we pay for what we promised.

However, I don't think the drivers licence office thinks they work for the public.....

[droidamus2]

2. The whole premise is stupid

The basic premise is 'you pay public workers too much, causes more taxes, takes money out of the economy'. Uh, no it doesn't it is just 'who's pocket is the money in' then taxpayers or the public workers. Either way it gets spent in the economy so where's the 'taking money out of the economy'. This is just another attack on middle class. They have gotten rid of most the good paying manufacturing jobs, they have out sourced a lot of the good paying IT jobs overseas and they have reduced the unions to a vestige of what they once were and now they want to pay government employees less? Yes it is terrible to pay people that actually do a job. Don't we know that the true people that should be revered are those that make money off of money or off of other peoples labor or off of defrauding the government for millions of dollars at a time.

[cynzke]

3. More Than Meets The Eye?

Whats that comment from the right....make government small enough to drown in a bath tub. The "over paid government employees" is a ruse! I think the right's true agenda is to privatize government, out source services to private contractors and their corporate buddies. Never hear them complain about overpaying Halliburton. Wake up government employees and vote your interests. Republicans are going to cut your jobs and wages for sure. This campaign against public sector employees is just the beginning of privatization.

[Plucketeer]

4. It's a matter of ignorance.

Taxpayers jealous of the wages their employees are making. Who cares if we get shittier services - as long as those suckers ain't makin' more than me! :dunce: