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Government Employees Are Not "Over-Compensated"

The War on Public Workers

by STEVE BREYMAN

Government worker bashing is nearing a crescendo as we stare into the abyss of American public finances. There’s nary a mayor, governor or president who hasn’t found his or her work force an irresistible target of criticism for "greedy unions," "extravagant benefits," "unaffordable pensions," and "shared sacrifice."

Why is this?

Are teachers, fire fighters, snowplow drivers, and environmental regulators really that well paid?

Do FBI agents, state troopers, and local cops really have "overly generous" health benefits? Do health care aides, prison guards, and those who protect our drinking water really have platinum-plated pensions?

To answer these questions we must do some comparisons and some contextualizing. There are countless tendentious manipulations of the private vs. public sector compensation data by corporate-backed think tankers out there. That’s what they get paid to do. Simply looking at public vs. private pay averages is deceptive.

Governments do not have many minimum-wage jobs, whereas the private sector offers at least 10 million of them. Government work forces tend to be older and better educated, and thus better paid.

The vast capital gains of America’s billionaires do not count as wages or benefits; this makes private sector compensation appear lower than it actually is.

The private sector generates temporary jobs that tend to be lower paid, part-time and without benefits (80 percent of the jobs created by the private sector in November are temporary). Governments generally produce positions that tend to be more secure, full time and with good benefits.

One study of federal government vs. private compensation for nearly 600 comparable positions found that civil servants make 20 percent more on average. But again, averages are often deceptive. Another study, which adjusted for the variables of age and education, found that pay for local and state jobs is about 7 percent lower than in the private sector. Government pay scales often are higher for lower skill jobs, but lower for higher skill jobs. Look at the pay for physicians, IT types, engineers, lawyers and other professionals in the public sector. It can be half or less of what one finds in the private sector.

This partly explains the "revolving door" of non-career government executives spending years in the private sector to make up for a comparably meager public paycheck.

But the ultimate test is individual. Do it yourself: go to http://www.usajobs.opm.gov/ or http://www.cs.state.ny.us/ to see what the job most like yours pays.

As to public vs. private sector health benefits, the data are even trickier. There are no large, nationally representative databases. There’s no doubt that most small businesses do not offer health benefits as generous as those found in government, if any at all. But if you compare public employee benefits to those for staff at large corporations (500 or more employees), the benefits are nearly identical.

A fair comparison? You decide.

What about pensions? The fundamental issue is the difference between defined-benefit plans (prevalent in government jobs) and defined-contribution plans (e.g., a 401k, the standard in most of the private sector). The former promise a certain monthly pension check, the latter leave you at the mercy of Wall Street. Defined-benefit plans clearly cost employers more than defined-contribution plans. That explains why 85 percent of private-sector workers do not have them.

At the same time, about 30 percent of state and local workers do not receive Social Security retirement benefits. They see their defined-benefit plans as making up for that.

Is a guaranteed pension really too generous? Or should one’s old age security not be left to a rigged casino?
 
Today’s claims over what are fair or affordable public employee compensation packages must be seen in political-economic context. We’re in the midst of another jobless recovery. Despite record corporate profits, "American" companies are not hiring in America. Instead, they created 1.4 million jobs overseas last year. Gone are the days of life-long employment at a single firm with good pay, adequate benefits and a guaranteed pension. Welcome to the era of temporary, deskilled, part-time jobs with few benefits and a lousy pension. We’ve witnessed the deliberate restructuring of America’s private sector work force; government employees are next.

People are worried about holding onto jobs they hate. Almost every state’s budget is in crisis. The federal government is set to raise the debt ceiling again. Tax burdens grow much more often than they shrink even with cynical gimmicks like Obama’s one-year cut in the payroll tax that funds Social Security. We’re encouraged by much of the corporate media to resent the benefits of civil servants rather than the bonuses paid at Goldman Sachs. Decades of redistributive policies–forcing income from the bottom upwards–have fewer Americans eating more of the pie than ever before.

Elite interests allied with Andrew Cuomo set up The Committee to Save New York to press hard for givebacks, cuts, and other "reforms." Even with their strong unions, it will be very difficult for public sector employees to resist the current onslaught.

Let’s be clear now: beating up middle-class public servants will not slow the growing economic inequality underlying many of our present problems. Governments under the sway of powerful lobbies have avoided progressive taxes on all the income of their millionaires and billionaires for far too long. This is fair? "Shared sacrifice" begins when those at the top no longer pay lower tax rates than their secretaries.

STEVE BREYMAN is Associate Professor of Science and Technology Studies at Rensselaer Polytechnic Institute in Troy, New York.