I know that probably everything below is obvious to this audience and/or already presented better by someone else here, but anyway: following up John’s post on the deliberate deception behind the “contribute more” demand of public service workers in Wisconsin, here’s some inconvenient data.
The shorter: public service workers are not overpaid. Not even a little bit.*
Let me turn it over to an MIT colleague (one vastly more accomplished than I), Thomas Kochan,
Kochan is a Wisconsin native and a University of Wisconsin graduate. He’s recently been involved in some creative and effective labor negotiations in Massachusetts. In his day job, he studies industrial relations and labor policy at MIT in both the Engineering Systems Division and the Sloan School of Management (i.e. not habitats exactly overpopulated with DFH’s).
Here’s what he had to say to his home state:
It has to start by getting the facts right. Wisconsin’s public service employees are not overpaid relative to their private sector counterparts. Rutgers University professor Jeffrey Keefe has done the analysis. (See his complete study on our Employment Policy Research Network website: www.employmentpolicy.org.) Controlling for education and other standard human capital variables he found that Wisconsin’s public sector workers earn 8.2 percent less than their private sector counterparts in wages and salaries. Taking fringe benefits into account shrinks the difference to 4.2 percent. Thus, public sector workers have lower wages and higher fringe benefits (yes, pensions and health care benefits are the two standouts). But overall, they are not overpaid compared to the private sector. No easy scapegoat here.
That is: Wisconsin state workers are living exactly the way their fellow citizens should want them to: they are deferring present consumption for income security in retirement. This is what every financial counselor begs their clients to do. It is what as a society we want to happen — better by far that our citizens anticipate and prepare for life after work than to hit the bricks with a grin and a sawbuck in their pockets.
And Wisconsin civil service is exercising such prudence at a cost to the taxpayer lower than that of private sector workers. You can argue whether or not that 4% figure is a sufficient price to pay for the (at least partly) notional job security public employees possess, but the basic point is clear: Wisconsin state workers are hardly bilking the tax payer to enjoy lives of sloth and opulence.