Across the nation, the fiscal fallout from the Great Recession will make the coming budget year among the worst on record for state governments. Elected officials will weigh painful budget cuts against unpopular increases in revenue. A common theme that has emerged is to scapegoat public‐sector workers, targeting them for concessions and painting them as the fortunate beneficiaries of “Cadillac” wages and benefits. A new report released by the Economic Policy Institute addresses head‐on the question of whether publicsector employees in Wisconsin are over‐compensated, and concludes instead that they are actually undercompensated.
• On an annual basis, full‐time state and local workers and school employees are undercompensated by 8.2% in Wisconsin, in comparison to otherwise similar private‐sector workers. When comparisons are made for differences in annual hours worked, the gap shrinks bur remains at 4.8%.
• Wisconsin public‐sector workers are more highly educated than private‐sector workers; 59% of fulltime Wisconsin public‐sector workers hold at least a four‐year college degree, compared to 30% of full‐time private‐sector workers.
• Wisconsin state and local governments and school districts pay college‐educated workers, on average, 25% less in total compensation than do private employers.
• College‐educated public‐sector workers earn considerably less than private‐sector employees. On the other hand, the roughly 1% of public‐sector workers without high school diplomas tend to earn more than their peers in the private sector because the public sector sets a floor on earnings.
• In addition to having higher education levels, Wisconsin state and local government employees, on average, are more experienced.