Wisconsin governor goes bonkers


This is pretty much what you’d expect. Public employees get a bigger share of their compensation in benefits than private sector employees (34% of total comp vs. 26-33%), and because of this the lower rungs of the public sector ladder get paid a bit more than their private sector counterparts. Anyone with a college education or more, however, is paid far less, and this brings the overall average for the public sector a bit below the private sector.

In a separate calculation that controls for full-time status, education level, years of experience, age, gender, race, employer organizational size, industry, and hours worked, the report concludes that public employees are compensated 2-7% less than equivalent private sector employees.

I must say that in general, the public sector compensations seem to make much more sense than those for the private sectors.

“Relevance” is a vague standard, but there are certainly some non-professional government workers who work full time and participate in collective bargaining. This NY Times article specifically mentions a cook working in the UW system making $28k a year.

I have no idea how large a class he represents. I replied mostly because I found something particularly egregious about such a transparently unfair comparison.

I’d bet the results for the median show a big difference or if you used average compensation excluding the top 1%. Compensation at the top has exploded. So I’d guess that a comparison of workers excluding the very top has public sector employees coming out on top. Which is why people are really angry at them b/c they see faster wage gains, much better pensions and fewer hours worked. Throughout most of the income distribution, public employees have it better than their private sector counterparts.

Do you “guess” or do you know? This strikes me as the kind of claim that ought to be substantiated.

I was posting a data point. When people say that private workers are compensated greater than public, I’d expect to see that in the data. The data doesn’t show it, though making comparisons that are true apples to apples are difficult.

I understand the nuance in looking at compensation, I’ve done it on a global scale and been responsible for setting the yearly merit award in 42 different countries that my company does business in.

Earnings have a positive skew that can really affect the average. Which is why EPI often uses median income instead of average income (see any of their state/working america). Average income is distorted b/c of gains at the top. For this study, EPI reverses and uses average instead of median income although the same distortion is still in place.

While public employees are capped/truncated, there is no such cap on the private sector compensation, so you’d expect private sector to be higher on average.

I only care about it as public sector employees relate to counter-parts in the private sector, which pretty much excludes the top 1%. So I feel pretty confident that the pay discrimination would fall be either truncating earnings and tossing outliers or using median compensation if available. And I know median earnings are available in Ipums.

EDIT: NY Times has a piece today on public employees benefits and costs to states: http://www.nytimes.com/2011/02/14/business/14retirees.html?pagewanted=1&partner=rss&emc=rss

1/7th of Michigan’s current budget is to retirees, which is not so good for that state

Public sector compensation just sounds more awesome by the second!
In the BLS pdf from earlier, it does seem like management, business and financial drags the average up for the private sector, while teachers do the same for public.

The state pays hundreds of millions of both state and federal dollars for road upkeep, and without tolls, there is no direct return. It’s infrastructure, connecting the three largest counties in Wisconsin to an existing Milwaukee-Chicago rail line. The cities of Milwaukee and Madison were also both willing to kick in to offset state operational costs.

Again, this $810 million also included millions for upgrades and modernization of existing track, which Walker says he still wants to do. Who knows where he thinks the money will come from. It’s also worth noting that as Milwaukee County Executive, Walker refused to accept any federal stimulus money even though the county has a huge backlog of needed work and repairs. This is a pattern of behavior of refusing federal funds that are already there and will be spent elsewhere.

What’s the nationwide share of income that goes to retirees? I’m guessing an apples-to-apples comparision after adjusting for who’s paying the social security equivalent would be the same. Pushing it off-budget into 401ks doesn’t change this, it just shifts the retirement income variance risks to workers and some other stuff about long-term demographic smoothing. Is the core of your concern “Michigan pays its public sector retirees too much” or something else?

I only care about it as public sector employees relate to counter-parts in the private sector, which pretty much excludes the top 1%.

It’s an interesting thought, but it still stands that this EPI thing is the best available data I’ve seen so far, and doesn’t agree with you.

I would agree that is (if true) a difficult problem for the state, but ONLY if they underfunded their investments/savings to cover retirement benefits for public sector employees. THAT is the real problem: the states made promises IN CONTRACTS that they are now refusing to honor. These employees, in many cases, took lower pay in return for guaranteed solvency and security in their later years, and now the states are trying to renege on those promises. That is reprehensible to me, and I would argue is also grounds for massive class-action lawsuits for breach of promise.

I find the impulse to drop the top 1%/look at median when looking at private sector compensation is interesting. Basically, you’re saying that because private sector workers are getting screwed by top earners taking a disproportionate share of the income distribution, the fair thing is to make sure that public sector workers are screwed in equal measure. Perhaps there is another way to add fairness to the system?

Big rally in Madison at the Capitol, I’ll post pictures later. No trees were moved against their will.

Good thing, the city would have immediately suffocated. 2/11, never forget!


Here are some of my pictures from today. These first four are more or less a panorama:

Looks like a pretty good turnout.

These first three are looking back at the Capitol building, the last is on the Capitol steps. You can see the window sign from #2 in #3:

13,000 according to police.

The Economist’s take, for what it’s worth. It is, however, an editorial.

Bog-standard right of center advocacy of “flexible” labor markets. They might as well print a blank page.

Only Germany provides a chink of light. There, although around 60% of public-sector workers are unionised, wage increases in the public sector have lagged behind those in the private sector. And though civil servants, who make up nearly half the public-sector workforce, enjoy both special pension schemes and job security, they are not allowed to strike. Indeed, the idea of going on strike for political reasons is unthinkable among all public-sector workers in Germany.

Yes, this is all good because…ok, I can come up with explanations of why this is “good” but they’re pretty mean to the writer.

But will governments have the courage to tackle the root causes of the problem (such as pensions) rather than dealing with secondary problems (such as wages)?

The face, the palm.