Another right-wing attack on public workers

How does government pay compare with that in the private sector? The answer is pretty much what you’d expect: Wages and salaries are lower, but benefits are better. Overall compensation is, if anything, slightly lower, though this varies by class of worker; less educated workers are better paid in the public sector and more educated workers are better paid in the private sector. This again is not surprising when you consider that less educated workers in the private sector often earn poverty wages with no health benefits and government employers have little incentive to shift costs onto Medicaid and other government programs.

But anti-government ideologues have deep pockets, so a minor industry has sprung up trying to show that government workers are overpaid. The latest report in this genre comes from Citizens Against Government Waste, and is typical of its kind. The research was done by an outfit called John Dunham and Associates, a.k.a. guerrillaeconomics.com. It shows many of the tell-tale signs of shoddy research:

1. Anecdotal evidence. Somewhere, there’s a government worker making an obscene amount of money and abusing the system. But focusing too much on specific examples is a sure sign they aren’t representative. The CAGW report claims the average San Diego firefighter makes more than $180,000 per year, but the source for this dubious assertion turns out to be a vague quote from the San Diego mayor’s office at a time when the mayor is in a fight against public-sector unions. CAGW actually didn’t need to look hard to find a government employee abusing the system, namely San Jose Councilman Pete Constant, one of the presenters at the CAGW press conference yesterday. As it turns out, Constant is receiving disability pay as a former police officer while also earning a councilmember’s salary. This actually is fairly typical, as public-sector pay scandals usually involve elected officials or senior administrators with connections. In this case, San Jose councilmembers apparently exempted themselves from rules barring double dipping.

2. Ignoring obvious explanations. Much of the CAGW report is a compendium of state and local government budget woes—bankruptcies, layoffs, etc.—which the report blames on public pensions. The recession is mentioned only once, in passing. Likewise, there’s no mention of the fact that pension underfunding is itself a function not just of the 2007–09 stock market collapse, but also the failure of elected officials in many states and localities to make required pension contributions over many years, as Ross Eisenbrey noted yesterday.

3. Dubious sources. The authors claim each additional dollar in wages comes with $1.17 in additional benefits. The expert source? USA Today. The report also warns of the danger that public pensions will trigger a Greek-style fiscal crisis, citing pundit Fareed Zakaria. My personal favorite is the authors citing the Reason Foundation’s Adam Summers on why you should not control for education when analyzing compensation (public-sector workers tend to be better educated, so you can imagine how this biases results): “State and local governments hire more educated people not because the job duties demand more education, but because they have access to the public’s money and government budgets are not as constrained as those of private firms.” In other words, educated workers take government jobs that don’t require their skills because they get to play with a bigger piggy bank. I’m sure public schoolteachers who spend $1.3 billion of their own money to fund classroom supplies would be interested to learn this.

4. Alarmist and paranoid language. The authors darkly warn that if public workers in Michigan have their collective bargaining rights restored, “there would be no ceiling on the amount of money that unions could obtain in labor contracts.” Are the authors actually in favor of imposing legal limits on pay (for CEOs, say)? Now that would be interesting. The authors also repeatedly complain of a “lack of transparency” in government data sources, as if the Bureau of Labor Statistics and other agencies were hiding something. In fact, when BLS releases summary statistics instead of detailed data to the general public, this is to protect the privacy of employers and individuals who respond to government surveys (serious researchers can often access micro-data under strict confidentiality agreements). However, complaining about lack of data is how the authors justify what appears to be a very convoluted methodology, below.

5. Impossible-to-replicate methodology. The authors ignore standard economic models in favor of using “a system of 22 equations with 3,564 variables” to estimate public and private sector employment by major occupational group. It gets even fuzzier from here, but the authors appear to use occupation-weighted averages in the different sectors to compare wages and benefits, finding that state governments pay on average 6.2 percent more per hour in wages and benefits than the private sector. This is described in a “detailed methodology” appendix that is one-and-a-half pages long. Despite this lack of transparency (ahem), the little that is disclosed is enough to set off alarm bells. For starters, they appear to lump together workers in broad occupational categories like “management” or “healthcare practitioners and technical,” implicitly assuming they should be paid the same. Even within smaller occupational groups, like “protective service,” this would not make much sense (should police officers be paid the same as private security guards?) They then compound the problem by hand-waving when it comes to compensation, assuming, for example, that all government employees were assumed to have similar benefit levels.


  • 1234heythere5

    HR2309 proposed by Representative Darrell Issa
    plans to have his bill heard in the House after elections

    Issa claims he is striving to save the USPS yet he is ignoring expenses that
    can be deleted without disrupting the service.

    #1. The Postal Accountable and Enhancement Act needs to be rescinded. In 2006
    the PAEA signed by Bush, mandated that the USPS fund 75 years of retiree health
    benefits in 10. As the USPS was solvent before the PAEA (HR6407) was passed it
    stands to reason that the USPS would once again become solvent if this law was
    rescinded.

    #2. Overpayments of 50 to 75 Billion the USPS
    made to the Civil Service Retirement Service should be returned.

    #3. Overpayments the USPS made to FERS need to be retrieved.

    #4.The USPS needs to charge more for
    delivering UPS parcels to places UPS
    don’t.

    #5. Adjust the ratio of managers to workers .

    #6 Quit giving deep discounts to large businesses.
    . .Issa’s solution is to cut the workforce by at least 100,000, and make Postal Workers’ wages and
    benefits depend on a separate board when
    a contract isn’t agreed upon. This is a case where Issa’s cure would cause the
    death of the USPS as a public service and have it revived as a business with
    lower paid workers, higher rates and less service. .http://www.youtube.com/watch?v=09ybkkiH2Ho

    http://www.youtube.com/watch?v=am4wez1ShPY

    http://www.youtube.com/watch?v=dsPIY9bFFZY

    http://www.youtube.com/watch?v=-chx0j3_8IU

    http://www.youtube.com/watch?v=fRcBoDSfisg

    http://www.youtube.com/watch?v=ZDJNamOGSe

    S1789, sponsored by Lieberman, passed in the
    Senate, but not in the House,would cut 100,000 jobs with the USPS when we don’t
    need to have more unemployed workers. S1789 would decrease compensation for
    injured workers and end it for those over 65, when we don’t need to take away
    compensation or lower compensation for injured workers. It would weaken the
    unions which promote a “living wage” at a time when we don’t need to
    add more people to the “working poor”, S1789 would close smaller post
    offices (some have already closed), and slow mail delivery by closing 200+
    distribution centers.

    In 2006 Congress voted to have the USPS fund 75 years of retiree health
    benefits in 10 amounting to 5.5 Billion a year.

    Saddled with funding 5.5 Billion a year that had nothing to do with mail
    delivery, the USPS could no longer have it’s revenue =costs as it had done
    until 2006.

    If this bill is passed or HR2309 the USPS will end up virtually privatized with
    lower wages and benefits for its ’workers, a scaled down and overworked
    workforce, more mail services contracted out, less services for the public
    including curbside service in place of home delivery.

    This is how the Post Office could end up
    privatized if HR2309 were passed.

    Management is replaced if they cannot successfully restructure Postal
    Service finances when the
    Postal Service fails to pay its bills for more than 30 days, a
    receivership-style authority takes over for USPS management with an explicit
    mandate to cut costs while maintaining universal service.