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PORTSIDE  February 2011, Week 3

PORTSIDE February 2011, Week 3

Subject:

Wisconsin Public Servants Already Face a Compensation Penalty

From:

Portside Moderator <[log in to unmask]>

Reply-To:

[log in to unmask]

Date:

Mon, 21 Feb 2011 21:52:03 -0500

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (89 lines)

Wisconsin Public Servants Already Face a Compensation 
Penalty 

Ethan Pollack February 18, 2011

http://www.epi.org/economic_snapshots/entry/wisconsin_public_servants_already_face_a_compensation_penalty/

The campaign against state and local workers is often
justified with claims that they are privileged relative
to their private-sector peers or have somehow been
cushioned from the effects of the recent recession and
slow recovery. These claims are clearly false.

In Wisconsin, which has become a focal point in this
debate, public servants already take a pretty hefty pay
cut just for the opportunity to serve their communities
(Keefe 2010).  The figure below shows that when
comparing the total compensation (which includes
non-wage benefits such as health care and pensions) of
workers with similar education, public-sector workers
consistently make less than their private-sector peers.
 Workers with a bachelor's degree or more--which
constitute nearly 60% of the state and local workforce
in Wisconsin--are compensated between $20,000 less (if
they just have a bachelor's degree) to over $82,000 a
year less (if they have a professional degree, such as
in law or medicine).

Chart: Wisconsin Public Workers Have Lower Total Compensation
http://www.epi.org/economic_snapshots/entry/wisconsin_public_servants_already_face_a_compensation_penalty/

It is necessary for making true apples-to-apples
comparisons to control for worker characteristics such
as education in order to best measure a worker's
potential earnings in a different sector or industry. 
Controlling for a larger range of earnings
predictors--including not just education but also age,
experience, gender, race, etc., Wisconsin public-sector
workers face an annual compensation penalty of 11%. 
Adjusting for the slightly fewer hours worked per week
on average, these public workers still face a
compensation penalty of 5% for choosing to work in the
public sector.

The deficit that Wisconsin faces is caused by the
current economic downturn and the recent tax cut
package.  It has nothing to do with the compensation of
the people that educate our children, keep the streets
safe and clean, keep dangerous chemicals out of our
water, and keep insurance companies from taking
advantage of us.  These public servants are already
paid less than those in the private sector, and
nationally, this gap has actually been increasing over
the past few decades (Bender and Heywood).  Instead of
opportunistically using these hard times to target
workers who--because of their public service--already
take a substantial pay cut, Wisconsin politicians
should focus on creating jobs and boosting the incomes
of all workers.

Citations

Bender, Keith and John Heywood, 2010. "Out of Balance:
Comparing Public and Private Sector Compensation over
20 Years", National Institute on Retirement Security,
Washington, D.C., April.

Keefe, Jeffrey H. 2011. "Are Wisconsin Public Employees
Overcompensated?", Economic Policy Institute,
Washington, D.C., February 10.

___________________________________________

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