Are Wisconsin Public Employees Over-Compensated?
by run 75441
Are Wisconsin Public Employees Over-Compensated?
Conclusion: Wisconsin public employees are not overpaid: The earnings equation estimates indicate that state and local government employees in Wisconsin are not overpaid. Rather, local and state public employees are undercompensated. When we make comparisons controlling for education, experience, hours of work, organizational size, gender, race, ethnicity, citizenship, and disability, both state and local public employees earn lower wages and receive less in compensation (including all benefits) than comparable private sector employees.
A standard earnings equation produces what some may consider a surprising result: full-time state and local employees are undercompensated by 8.2%. We observed, however, that public employees work fewer hours, particularly employees with bachelor’s, master’s, and professional degrees. An earnings equation controlling for work hours of full-time employees demonstrates that Wisconsin public employees earn 4.8% less than comparable private sector workers working comparable annual hours. EPI
WI public employees are underpaid by ~4.8% when compared to the private sector. Knight at Naked Capitaism kept insisting the bill would not remove collective bargaining. Technically, he is correct.
Who the bill impacts and how it impacts them:
“General municipal, county, and school employees (except police and fire), and school boards and local governmental units may only bargain over “total base wages.” Health insurance, pension, vacation, holidays, hours of work and any other conditions of employment (promotions, evaluations, safety, grievance/arbitration procedures and just cause standards for discipline) will be prohibited subjects of bargaining.” PROPOSED CHANGES TO MUNICIPAL EMPLOYEE BARGAINING RIGHTS MUNICIPAL EMPLOYMENT RELATIONS ACT UNDER CH. 111.70 [MERA]
The police and Fire Departments supported Walker so they are not subject to this bill.
Unions did offer up concessions:
“This afternoon, Marty Beil, executive director of the Wisconsin Public Workers Union, sent a message to the Governor’s office agreeing to the cuts to pension & welfare benefits sought by Walker in his bill. The governor’s response was “nothing doing.” He wants the whole kit and kaboodle – the end of the collective bargaining rights of the public unions.” Koch Brothers Behind Wisconsin Effort To Kill Public Unions, Forbes Magazine
Rather, local and state public employees are undercompensated.
Fine. Why are they protesting? They should just quit and get a job in the private sector
Rather, local and state public employees are undercompensated.
Fine. Why are they protesting? Conclusion: they should just quit and get a job in the private sector
I thought conservatives were against class warfare and income jealousy?
Apparently that only applies if the targets are billionaires like the Koch brothers.
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they should just quit and get a job in the private sector
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And why are the Koch brothers complaining?
They should just go teach school for a living.
sammy
i hope you are just being funny.
but there are two problems:
there are no jobs in the private sector.
some people are willing to trade some money for more security. you may not be one of those, but you shouldn’t despise them. they have their reasons.
what you and walker are asking them to do is give up even more money and give up the security as well.
you see, what’s wrong with your side is they keep grasping. more is never enough for them. they want it all. then they want to eat your liver. with a nice chianti.
Could the state of wisconsin refuse to do business with companies that allow their crony capitalist CEO’s to negotiate salary and benefits with their hand-picked boards?
You could see CEO compensation brought in line pretty quickly if they had to negotiate their compensation with their employees instead of the board.
I have a logical problem here.
It’s a generally lefty and progressive thing to say that government is there to aid us, to take care of us, to help us. This is why more things should be removed from the vicious marketplace, where people acan be and are exploited, into the hands of government. Health care for example.
Unions are of course to protect the workers from capitalist bastards like myself who would exploit them.
So why would public sector workers need a union to protect them from that benevolent and all knowing government? If politicians are good enough that they can and should decide how our hernia is fixed then surely they can be trusted with the pay and pensions of the workers?
I can really see only one way out of this: that the turn of the electoral cycle means that the bastard Republithugs will get in occasionally and the public sector workers need a union to protect them when such a calamity occurs.
But then, who is going to protect our health care/environment/trade policy/any other task we’ve handed over to government when such a clamity occurs?
I simply cannot see any way out of this: if workers need protection from government then don’t we all need protection from government?
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don’t we all need protection from government?
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Yup; having lots of money seems to be the best way of protecting yourself and the Koch brothers have the best government money can buy.
But if you’re middle class with little cash in the bank the only tool you have is to band together with other folks in a union.
Guess which method works better?
This is a good post becuase it propoerly answers the first question from Ken Fisher’s The only three questions that count. The first question is:
1) What do you believe that is actually false?
The other two are:
2) What can you fathom that others find unfathomable?
3) What the heck is my brain doing to blindside me now?
What this post tells us is the public employees are not overpaid, nor are they underpaid. So let’s move to question 2, why does the public believe public employees are overpaid? My feeling is situations that border on the absurd that make the newspapers. These stories are probably the exception rather than the rule, but these are the stories that form public opinion. This link shows the examples of public figures geting absurd pensions:
http://www.washingtonpost.com/wp-dyn/content/article/2011/02/21/AR2011022103775.html
That is the unfathomable, and it creates the negative perception of public employees as a whole. Most regular citizens will not read this paper.
Still working on question 3, or more importantly the public unions should be working on that question. They are standing up against current popular public opinion (despite the accuracy of that opinion – it still exists), and need to figure out how to best handle this – lest they suffer even more negative public backlash – wrongly or rightly.
Hundreds of investors can pool their money, appoint someone to represent them, and allow that person to decide the terms under which they’ll sell their output.
Unions perform the same function, but conservatives think that each member must be dealt with individually. They don’t think it’s appropriate to apply the same standard to investors.
Using their logic, if one investor wouldn’t sell me a widget for the price I want I should be able to approach another of the firm’s investors and negotiate a lower price. But of course they love the notion of an investor’s union where all negotiations are handled by their union boss since that increases their leverage wrt prospective customers.
They just don’t want the great unwashed masses to have the same leverage; only investors should be able to form unions.
should read “despite the apparent INaccuracy of that opinion”
You make an odd argument. You also commit the fallacy of a false dichotomy. It’s is, and never has been, an argument of government vice private. It is one of ‘how much government and how much private’. While “lefty” may tend to argue for more (read ‘better’) government, they typically do not condemn private industry. However, “capitalist bastards” tend to demonize government as a whole while rarely acknowledging that it provides a useful function. This borders on stupdity.
Furthermore, just because you imply that “lefty” loves and trusts the government doesn’t make it so. What is the purpose of regulation or the courts if not to protect the citizens from each other and the government? Have you read of the progressives arguing for the disbanding of the court system?
Also, why are politicians involved in deciding on treatment of hernias? Where did anyone suggest that? Could you provide a reference? Perhaps you mean to imply that politicians are part of the process for a government-run healthcare system. But, they are already part of our current health-care system: they vote to allow middle men to siphon of profits; they pass legislation to protect entrenched interests and minimize competition. Forget ‘death panels’, there are already hundreds of these and they are run by the middle men who would let your grandmother die rather than risk a loss.
How about you stop your glib arguments and present something useful?
Much of this animosity against unions and state employees can attributed to jealousy or ignorance. How dare they continue to get pay increases and affordable health care when I’ve been screwed over for the last 20 years, etc…
My feeling is that people don’t realize that they too should be enjoying these benefits and that instead of acting responsibly they are just enabling the further destruction of the middle class.
These examples you provide (thanks for the reference, by the way) are fair examples of outrageous pensions, but while they occur rarely in public and union jobs, they are the norm in private industry. The list goes on and on and I’m not talking about a few bad seeds; it’s the norm among senior executives in big firms.
Worstall
you live in a fantasy world. of course we all need protection from the government. that’s what the Founders tried to do with the Framework they gave us. But public workers need the same “protection” from their bosses (us?) as any workers need. it’s not a good vs evil thing, it is purely a realistic understanding of the nature of power. if you have countervailing powers you have some chance of a “fair” outcome. IF you do not have countervailing powers you have NO chance.
I am serious about the fantasy world by the way. Your comments reveal exactly that you have no idea how the real world works, but have spun fairy tales based on the blatherings of politicians on both sides.
It would be useless for me to urge you to grow up, but maybe you can get a glimse of why i, at least, can’t take you seriously.
mcwop
i think you are about right. but public opinion is created by the malefactors of great wealth… we no longer have a “press” that sells papers by telling stories about the abuses of “business.”
and we have people like CoRev who complain about the Unions making this such a big deal… they ought to negotiate quietly, you see.
Come to think of it, that’s what Obama is saying about reforming “entitlements.” Lets talk about this where the public can’t hear. It’s not enough they won’t listen to the public, now they don’t want the public to listen to them.
Yep, Jason. People need unions to bargain for wages and benefits they themselves cannot persuade employers to provide. Strength in numbers. It’s the idea behind government–we can do things together we can’t do alone. Not a socialist or destructive idea, just another way We the People advance our well-being. NancyO
Nice touch McWop. I did too.
Tim Worstall:
“I have a logical problem here.
“It’s a generally lefty and progressive thing to say that government is there to aid us, to take care of us, to help us. This is why more things should be removed from the vicious marketplace, where people acan be and are exploited, into the hands of government. Health care for example.
“Unions are of course to protect the workers from capitalist bastards like myself who would exploit them.”
Your problem is not one of logic. It is one of understanding what liberals and progressives actually believe. These are caricatures.
Same difference, different direction, both think someone is getting robbed or denied.
The lefties say “the war machine, low taxes and outsources are taking food from poor women/children, and clothing off the backs of the cold.”
The corporatists, militarists and war profiteers say “the war machine, corporatisst and their profiteering are being robbed to feed the poor women/children and clothing the naked”
As if the christian fundamnetalists would feed or clothe the poor and other less than equal non God’s children.
http://www.youtube.com/watch?v=YR6SMAJQW8Y&feature=related
The study fails to account for several things.
1: Teachers tend to come from the bottom of the college pool. A straight-A physics student from MIT is not equivalent to a straight-C phys-ed student from Directional State U. Let’s see SAT scores and college ranking thrown into the multi-variate analysis, and see how things change.
2: There is no accounting for job security. If, in fact, teachers are under-compensated by 5%, I think there are plenty of people who would consider the trade worth it.
3: Accounting for pensions is very tricky. While the study attempted to do it, I think they under-valued the almost-risk-free element of these pensions.
Overall, teachers, on average, are compensated relatively fairly. The bigger problem is the distribution of that pay, which is almost entirely based on seniority. Both pensions and health care tend to be much more valuble in the latter part of one’s career, causing a new teacher’s full compensation to be well less than half that of a nearly-retired one. This gap is to great, and the curve needs to be flattened. Additionally, teachers with highly-demanded specialities (math, science, special ed) need to be paid more.
Chuck
you look young. you sound young. so maybe there’s time for you, if not much hope, to learn something before you die of smugness. i can’t teach you.
but here are some hints.
if i hire someone to shovel my walk, i don’t care if he got all A’s in physics at MIT. I care if he shovels my walk. And he cares if I pay him enough so its worth his time.
In fact if I hire someone to design a nuclear plant, I don’t care if he got all A’s in physics at MIT. I care can he do the job. The A’s would help, but honesty and thoroughness will help more.
Einstein did not get all A’s.
A real physicist will work for food. But a teacher is an ordinary person with a family, and he needs enough money to send HIS kids to MIT. And the only way any worker gets enough money is to be able to “bargain” with the boss. When your boss is too big to bargain, you need something like a union.
And a union that doesn’t understand the reason for seniority pay will not last long.
There is plenty of accounting for job security. And pensions appear to be too tricky for you to understand. But the trick is you pay for your pension and your healthcare while you are too young to need them, so the money will be there when you are too old or sick to pay for them.
For what it’s worth, I was a straight A student, and when I was in junior high school i thought just like you do. But I grew up.
Chad
you look young. you sound young. so maybe there’s time for you, if not much hope, to learn something before you die of smugness. i can’t teach you.
but here are some hints.
if i hire someone to shovel my walk, i don’t care if he got all A’s in physics at MIT. I care if he shovels my walk. And he cares if I pay him enough so its worth his time.
In fact if I hire someone to design a nuclear plant, I don’t care if he got all A’s in physics at MIT. I care can he do the job. The A’s would help, but honesty and thoroughness will help more.
Einstein did not get all A’s.
A real physicist will work for food. But a teacher is an ordinary person with a family, and he needs enough money to send HIS kids to MIT. And the only way any worker gets enough money is to be able to “bargain” with the boss. When your boss is too big to bargain, you need something like a union.
And a union that doesn’t understand the reason for seniority pay will not last long.
There is plenty of accounting for job security. And pensions appear to be too tricky for you to understand. But the trick is you pay for your pension and your healthcare while you are too young to need them, so the money will be there when you are too old or sick to pay for them.
For what it’s worth, I was a straight A student, and when I was in junior high school i thought just like you do. But I grew up.
“ causing a new teacher’s full compensation to be well less than half that of a nearly-retired one. This gap is to great, and the curve needs to be flattened. ” Chad
An accurate observation, but a peculiar suggestion. In what employment sector do the new and inexperienced employees compensated to the same extent as are the well experienced employees? Are you suggesting that all teachers start at the highest level of compensation? Good idea. I don’t think that Scott Walker is gong to accept that idea. I wouldn’t blame him.
“A straight-A physics student from MIT is not equivalent to a straight-C phys-ed student from Directional State U.” Chad again.
Employees are not paid on the basis of academic grades and performance or the schools they attended. Those factors may help tin being hired, but performance on the job and years of service and in some systems the specific assignment are factors that determine level of compensation. The comparison of level of education in relation to level of pay is for the purpose of comparing pay levels for jobs that require varying levels of education. The A student from MIT is certainly far more likely to get a better paying job than is the C student from Fly By Night U. That’s not the comparison of interest.
“There is no accounting for job security. If, in fact, teachers are under-compensated by 5%, I think there are plenty of people who would consider the trade worth it.” Yet again.
You would be very surprised to learn how often teachers are laid off due to budget issues in various localities. NYC seems to be in an endless crisis letting go numerous teachers one year only to go through the expense of rehiring and distributing in the next several years. It’s all part of the “business people know better” school of thought. What I would refer to as the Enron Better Management Approach to public sector work.
“Accounting for pensions is very tricky. While the study attempted to do it, I think they under-valued the almost-risk-free element of these pensions. “
Tricky all the more so as the geniuses who run the asylums keep adding tiers to the system. In NY I’d guess that most Tier I employees are retired now. They made no contributions and retired at a percentage of last pay based on years on the job. There are now at least three and maybe four tiers with varying plans. Only an idiot would run a work place compensation system in such a manner, but that’s what we have. NY teachers have to seek pension planning from both their union and the pension plan admin. in order to have any reasonable idea of what they’re entitled to as they approach retirement age. A degree in physics is not likely to help.
“Overall, teachers, on average, are compensated relatively fairly.” This one’s the best of all.
“On average?” Given the variability of pay scales for teachers across the counry this is one hell of a statement. And even if the average could be trusted as representative of something real how do you measure fairly? You get what you pay for. Would anyone who can afford to choose otherwise willingly send their children to schools in Louisiana, Alabama, parts of Florida or Georgia, or even some parts of NY, or any place where the teachers are grossly under paid and nearly as illiterate as their charges?
Education is a complex industry. The task of turning out well educated and well rounded (scholastically competent) children at any point in the […]
jack
Chad seems to have left the building. His meritarian fantasy has a glaring flaw, which of course he can’t see: Who decides exactly what “merit” is? Of course he thinks getting straight A’s in a “hard” subject at a “good” school should set you up for life.
Anybody who has ever worked for a living knows better. Letting the marketplace determine wages is actually the only “sane” way to do about it, but even that requires that the marketplace be a “level playing field.” That requires a union in most cases. Though for a while the memory of unions can help. It would help if bosses were doing their job… recognizing and developing talent, but you can’t count on that.
Mostly you can never count on someone who has to give up something… money… in order to “fairly” compensate someone else… not to find reasons why that someone else shouldn’t really get paid less.
“It would help if bosses were doing their job… recognizing and developing talent, but you can’t count on that.”
The bosses in too many bureaucratic work places, both public and private, would be lucky to be capable of finding the correct gender bathroom. Knowing how to genuinely motivate workers and identify the specific skills of individual workers takes observational skill and an objective inclination which few people have and fewer are promoted because they have such skills. My personal experience, though anecdotal at best, is that the ability to pronounce the word s Yes sir are more likely determinants of managerial advancement. This may differ in more technical work places where I would think it difficult to hide a lack of competence.