Job Prestige & Remuneration, Public vs. Private Sector

From the Economist:

Many working-class men have lost their jobs. Those who are still employed have seen their wages stagnate and their pensions shrivel in the stockmarket crash. Their health insurance is insecure, but they don’t trust Congress not to make it worse.

Meanwhile, they can see that one group of Americans has been practically unaffected by the recession: government employees. Their hours have not been cut, their benefits are gold-plated and they are almost impossible to sack. In good times, few Americans notice these things, but in bad times, the disparity grates. Cops and firefighters can retire in their 40s and draw defined-benefit pensions for life. With overtime, one tenth of the police in Massachusetts made more than the governor’s annual salary in 2006, according to the Boston Globe. Including benefits, the average employee of New York City makes more than $100,000, according to Forbes, while some Californian prison guards “sock away $300,000 a year”.

And what do taxpayers get for their generosity? The bad bargains get all the publicity. Union contracts force the postal service to pay thousands of unneeded workers to do nothing. In New York, public-school teachers who can’t be trusted to teach but can’t be sacked either are paid to sit and do crosswords.

USA Today: “Federal pay ahead of private industry

Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

Instapundit on average compensation of Federal civilian employees vs. average compensation in the private sector.

Vcstar.com on California Compensation:

“Amid a crippling fiscal crisis, managers throughout California’s government have routinely allowed their employees to amass unused vacation time, enabling hundreds of workers to end their public service careers with payouts topping $100,000, a California Watch investigation has found. One worker combined vacation and compensatory time to walk away with more than $800,000, records show.”
…”In one case, James C. Tudor Jr., the former president of the State Compensation Insurance Fund, cashed out six times more vacation time than regulations allow, taking home more than $550,000 after he was fired in 2007 in the wake of an internal probe that “uncovered serious abuses at the highest levels,” according to state Senate documents.

Another state employee was allowed to accumulate large amounts of comp time in addition to unused vacation days, taking home $815,000 when he left state service.”

cato-at-liberty.org

First, people accuse me of producing distorted data somehow. Actually, it’s essentially just raw Bureau of Economic Analysis data, but the data is usually overlooked by the media because I don’t think the BEA puts out a press release on it. Anyway, the average wage data is from BEA Table 6.6D. The average compensation data is simply total compensation (Table 6.2D) divided by the number of workers (Table 6.5D).

Hot Air Federal pay surpasses private sector:

Job Federal Private Difference Pct
Public relations manager $132,410 $88,241 $44,169 50.05%
Broadcast technician $90,310 $49,265 $41,045 83.31%
Clergy $70,460 $39,247 $31,213 79.53%
Chemist $98,060 $72,120 $25,940 35.97%
Graphic designer $70,820 $46,565 $24,255 52.09%
Landscape architects $80,830 $58,380 $22,450 38.45%
Recreation worker $43,630 $21,671 $21,959 101.33%
Cook $38,400 $23,279 $15,121 64.96%
Pest control worker $48,670 $33,675 $14,995 44.53%
Laundry, dry-cleaning worker $33,100 $19,945 $13,155 65.96%

Via Volokh Conspiracy via Steven Greenhut in WSJ:

Approximately 85% of the state’s 235,000 employees (not including higher education employees) are unionized. As the governor noted during his $83 billion budget roll-out, over the past decade pension costs for public employees increased 2,000%. State revenues increased only 24% over the same period. A Schwarzenegger adviser wrote in the San Jose Mercury News in the past few days that, “This year alone, $3 billion was diverted to pension costs from other programs.” There are now more than 15,000 government retirees statewide who receive pensions that exceed $100,000 a year, according to the California Foundation for Fiscal Responsibility.

Many of these retirees are former police officers, firefighters, and prison guards who can retire at age 50 with a pension that equals 90% of their final year’s pay. The pensions for these (and all other retirees) increase each year with inflation and are guaranteed by taxpayers forever—regardless of what happens in the economy or whether the state’s pensions funds have been fully funded (which they haven’t been).

and this:

ormer Assembly Speaker Willie Brown, a well-known liberal voice, recently wrote this in the San Francisco Chronicle: “The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But we politicians—pushed by our friends in labor—gradually expanded pay and benefits . . . while keeping the job protections and layering on incredibly generous retirement packages. . . . [A]t some point, someone is going to have to get honest about the fact.”

From the WSJ The Government Pay Boom :

“It turns out there really is growing inequality in America. It’s the 45% premium in pay and benefits that government workers receive over the poor saps who create wealth in the private economy. And the gap is growing. According to the U.S. Bureau of Labor Statistics (BLS), from 1998 to 2008 public employee compensation grew by 28.6%, compared with 19.3% for private workers. In the recession year of 2009, with almost no inflation and record budget deficits, more than half the states awarded pay raises to their employees. Even as deficits in state capitals widen and are forcing cuts in services, few politicians are willing to eliminate these pay inequities.”

There’s more: “What if government workers earned the average of what private workers earn? States and localities would save $339 billion a year from their more than $2.1 trillion budgets. These savings are larger than the combined estimated deficits for 2010 and 2011 of every state in America. In a separate survey, the federal Bureau of Economic Analysis compares the compensation of public versus private workers in each of the 50 states. Perhaps not coincidentally, the pay gap is widest in states that have the biggest budget deficits, such as New Jersey, Nevada and Hawaii. Of the 40 states that have a budget deficit so far this year, 28 would have a balanced budget were it not for the windfall to government workers.”

Politico 2,000 House staffers make six figures:

Nearly 2,000 House of Representatives staffers pulled down six-figure salaries in 2009, including 43 staffers who earned the maximum $172,500 — or more than three times the median U.S. household income.

NPR –

TO DO: Find the report on this of the 1st week of March that implied Fed earn less than private.

Related:

Politico, 2,000 House staffers make six figures By: Erika Lovley March 26, 2010 05:10 AM EDT
The Recession’s Fat Cats: Public Employees, biggovernment.com, Veronique de Rugy
High state-worker payouts break rules, cost millions, vcstar.com, Chase Davis California Watch, February 27, 2010 at 3:22 p.m. , updated February 27, 2010 at 7:49 p.m.

Federal Pay Continues Rapid Ascent, cato-at-liberty.org, Chris Edwards

Wall Street Journal, The Government Pay Boom, America’s most privileged class are public union workers., MARCH 26, 2010
USA TODAY, Federal pay ahead of private industry, Dennis Cauchon,

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One Response to “Job Prestige & Remuneration, Public vs. Private Sector”

  1. The Cost of Public Pensions « Wacki’s blog Says:

    […] Cost of Public Pensions By wacki I covered how individuals benefit from the .gov pensions here. This post is dedicated to how it impacts the state or the nation as a […]

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