Sunday, September 19, 2010

Study: Those "Overpaid" Public Employees Really Aren't

Posted By on Sun, Sep 19, 2010 at 11:15 PM

A favorite tactic of conservatives these days is to bash public employees – especially those who belong to unions – as overpaid and underworked, stoking resentment among workers in the private sector whose pay and benefits don’t measure up.

But a new study by the Economic Policy Institute blows a pretty big hole in the claim that public sector employees are overpaid. In fact, they’re actually a little bit underpaid in comparison with private sector workers with similar backgrounds.

“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,” the report states. “On average, full-time state and local employees are undercompensated by 3.7%, in comparison to otherwise similar private-sector workers.”

Public sector employees tend to be better educated than their private sector counterparts; 54% of full-time state and local government employees have four-year college degrees or better, compared to 35% in the private sector. Public employees at that education level receive 25% less in total compensation, on average, than private-sector employees with the same education level.

The more education the public employee has, the more underpaid he’s likely to be. Total compensation for private-sector employees with doctoral degrees averages $151,875, but in the public sector the average is only $120,642.

Less-educated workers, on the other hand, do make out a bit better in the public sector. Private-sector workers with only a high school diploma earn an average of $50,596 in total compensation, but those with the same education average $53,880 in public sector jobs.

The study found that public employees work somewhat fewer hours than their counterparts in the private sector. Even after adjusting for that, however, the study found that “wage differences remain large and significant.” Overall, the average private sector worker receives $71,109 per year in total compensation, while the average public sector employee gets $69,108.

As Oregonian blogger Jeff Mapes observes: “This is a national study, of course, so it's not necessarily applicable to Oregon.  Still, it's an interesting take on the issue - one sure to infuriate critics who think public employees are increasingly a privileged class while pleasing state and local workers feeling unfairly under attack.”

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