In the divide-and-conquer assault on public employees which the powers-that-be have unleashed in their latest round of class warfare, we've been told repeatedly that government-paid workers make more than private-sector workers. The typical approach is to point to a bus driver or a professor or a garbage collector who made some seemingly outrageous sum. As states struggle with revenue shortfalls and the unemployment situation remains grim, there is more and more talk about "fixing" this situation. Typically, that includes going after the unions. It is, after all, they who are at fault for the supposedly unfair windfall their government-paid members have gained while workers in the private sector have suffered from economic downturn.
Just one problem with this theme. It's based on what Jeffrey H. Keefe at the Economic Policy Institute has labeled the myth of the overcompensated public employee.
On average, state and local employees earn $6,061 per year less than their private-sector counterparts. Add in health and insurance benefits and the average public worker earns $2,001 less per year than her peer in the private sector.
Here it is in chart form.
Click here for larger version.
[P]ublic employees, both state and local government, are not overpaid. Comparisons controlling for education, experience, hours of work, organizational size, gender, race, ethnicity and disability, reveal no significant overpayment but a slight undercompensation of public employees when compared to private employee compensation costs on a per hour basis. On average, full-time state and local employees are undercompensated by 3.7%, in com- parison to otherwise similar private-sector workers. The public employee compensation penalty is smaller for local government employees (1.8%) than state government workers (7.6%). ...
A full-time worker on average employed by state and local government received an 11% lower annual earnings compared to the private-sector employees. However, when compared to total compensation, the public employment penalty declines to 2%. High school graduates with some college approached wage earnings equivalency between private and public sector. High school graduates earn $36,640 on average working for state and local government compared to $38,269 for workers employed by private employers, a public-employment wage penalty of 4%. However, when we examine total compensation, high school graduates received total compensation of $53,880 on average working for state and local government compared to $50,596 for workers employed by private employers, a public employment compensation premium of 6%.
The compensation advantage reverses when we compare the college-educated labor force, with the private sector paying substantially higher wages. State and local workers with some college earn 32% lower wages and receive total compensation of 25% less than private-sector workers. The private-sector compensation premium jumps to 37% for a professional degree, 31% for a master’s degree, and 21% for a doctorate.
So, next time you hear that a mayor or governor or president has decided to freeze public workers' pay or cut back their benefits package, think twice before letting the words "it's about damn time" escape your lips. What's really going on, after years of mangling public budgets and busting unions throughout the private sector, is that right-wing narrative-setters have found yet another means of turning worker against worker, basing the attack on yet another lie. We all know who benefits from that. There's a word defining our push back against the lie: Solidarity.