The C is for Crank
Public Employees' Average Pay Isn't the Whole Story
As Josh noted this morning, a new study
by the left-leaning Economic Policy Institute concluded that public employees, on average, make less than private-sector employees.
Okay. But put this in perspective: Private-sector employment includes jobs that pay far more than any public-sector job (except maybe US President), which skews the average upward. The real question here is: What's the median? The EPI study only looked at averages.
An even bigger issue in the growing resentment against public employees, as James Surowiecki pointed out in last week's New Yorker , is union membership. Public-sector employees make up the vast majority of unionized workers in the country. Union workers average higher pay than non-union workers; ergo, people who work in the private sector are more likely to look at unionized workers and see tax dollars wasted on cushy jobs.
And, Surowiecki notes, pay isn't the whole story. As pensions and health care have been replaced by IRAs and health-savings plans, public employees have continued to enjoy Cadillac health care plans and guaranteed retirement benefits. Those benefits "are out of reach of most workers. And the disappearance of unions from the private sector has radically diminished the threat effect, meaning that unions don’t raise the wages of non-union workers."
Okay. But put this in perspective: Private-sector employment includes jobs that pay far more than any public-sector job (except maybe US President), which skews the average upward. The real question here is: What's the median? The EPI study only looked at averages.
An even bigger issue in the growing resentment against public employees, as James Surowiecki pointed out in last week's New Yorker , is union membership. Public-sector employees make up the vast majority of unionized workers in the country. Union workers average higher pay than non-union workers; ergo, people who work in the private sector are more likely to look at unionized workers and see tax dollars wasted on cushy jobs.
And, Surowiecki notes, pay isn't the whole story. As pensions and health care have been replaced by IRAs and health-savings plans, public employees have continued to enjoy Cadillac health care plans and guaranteed retirement benefits. Those benefits "are out of reach of most workers. And the disappearance of unions from the private sector has radically diminished the threat effect, meaning that unions don’t raise the wages of non-union workers."
The result is that it’s easier to dismiss unions as just another interest group, enjoying perks that most workers cannot get. Even though unions remain the loudest political voice for workers’ interests, resentment has replaced solidarity, which helps explain why the bailout of General Motors was almost as unpopular as the bailouts of Wall Street banks. And, at a time when labor is already struggling to organize new workers, this is grim news. In a landmark 1984 study, the economists Richard Freeman and James Medoff showed that there was a strong connection between the public image of unions and how workers voted in union elections: the less popular unions were generally, the harder it was for them to organize. Labor, in other words, may be caught in a vicious cycle, becoming progressively less influential and more unpopular. The Great Depression invigorated the modern American labor movement. The Great Recession has crippled it.
