Tuesday, February 23, 2010

Looking for a real discrepancy, look to government

Income angst? Not for public employees

By Jeff Jacoby Boston Globe Columnist / January 27, 2010

LAST MONTH, the US economy shed another 85,000 jobs. It marked a miserable end to a calamitous year in which an estimated 4.2 million American jobs were liquidated, and unemployment rose to 10 percent. In addition, more than 920,000 "discouraged workers'' left the labor force entirely, having given up on finding work and therefore not included in official unemployment data.

Since December 2007, when the current downturn began, the ranks of federal employees earning $100,000 and up has skyrocketed. According to a recent analysis by USA Today, federal workers making six-figure salaries - not including overtime and bonuses - "jumped from 14 percent to 19 percent of civil servants during the recession's first 18 months.'' The surge has been especially pronounced among the highest-paid employees. At the Defense Department, for example, the number of civilian workers making $150,000 or more quintupled from 1,868 to 10,100. At the recession's start, the Transportation Department was paying only one person a salary of $170,000. Eighteen months later, 1,690 employees were drawing paychecks that size.

All the while, the federal government has been adding jobs at a 10,000-a-month clip. Between December 2007 and June 2009, federal payrolls exploded by nearly 10 percent. "Federal workers are enjoying an extraordinary boom time in pay and hiring,'' USA Today observes, "during a recession that has cost 7.3 million jobs in the private sector.'' And to add public-sector insult to private-sector injury, data from the Office of Personnel Management show the average federal salary is now roughly $71,000 - about 76 percent higher than the average private salary.


Benefits widen public, private workers' pay gap

By Dennis Cauchon, USA TODAY


The pay gap between government workers and lower-compensated private employees is growing as public employees enjoy sizable benefit growth even in a distressed economy, federal figures show.

Public employees earned benefits worth an average of $13.38 an hour in December 2008, the latest available data, the Bureau of Labor Statistics (BLS) says. Private-sector workers got $7.98 an hour.

Overall, total compensation for state and local workers was $39.25 an hour — $11.90 more than in private business. In 2007, the gap in wages and benefits was $11.31.

The gap has been expanding because of the increasing value of public employee benefits. Last year, government benefits rose three times more than those in the private sector: up 69 cents an hour for civil servants, 23 cents for private workers.

Labor costs account for about half of state and local spending, according to BLS and Census data. Benefits consume a growing share of that, now 34%.

Illinois state Sen. Chris Lauzen, a Republican, says government benefits are unsustainable and unfair to taxpayers who earn less than civil servants. "People will become angrier and angrier when they learn the difference between their pay and benefits and what we give to public employees," he says.

Jennifer Porcari of the American Federation of Teachers, a union representing 1.4 million educators and state employees, says BLS figures that show government employees earn higher wages are misleading because jobs aren't comparable. Government jobs, such as teaching, often require more education.

Some states are asking unions for help with budget problems. New Mexico employees will pay an extra 1.5% of salary toward pensions for two years, cutting the state's share. Ohio's unions will take unpaid furlough days to save the state $440 million over two years. In the third year, workers will get most of the money back.

The wage gap between government and private workers has stayed roughly the same since 2002. Benefits are a different story.

For every $1-an-hour pay increase, public employees have gotten $1.17 in new benefits. Private workers have gotten just 58 cents in benefits for every $1 raise. The difference: Companies have ended most traditional pension plans and increased workers' share of health care costs. Government paid an average of $8,800 annually toward employee medical insurance. Private companies paid $4,100.

A full-time government worker receives benefits worth an average of $27,830 per year. A private worker's benefits are worth $16,598.


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