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Pension Reform Proposal Angers City Firefighters

Viewpoint: Differences between public and private workforces
By Walter Baber
I rely for my response on a recent study of public and private sector compensation conducted by the Center for State and Local Government Excellence and the National Institute on Retirement Security, using Bureau of Labor Statistics data and accepted analytical methodology.
By way of background, public and private workforces differ in several important ways. For instance, jobs in the public sector require much more education on average than those in the private sector. In fact, employees in state and local government are twice as likely to have college or advanced degrees than their private sector counterparts. This is due, in significant part, to the public service reforms of the Progressive Era, which were designed to reduce cronyism and partisanship in public employment. Education was substituted for political influence, with the result that public hiring is today a model of impartiality.
More concretely, wages and salaries of state and local employees are lower than those for private sector workers with comparable determinants of income (e.g. education). State employees typically earn salaries 11 percent below, and local workers 12 percent below, their private sector counterparts. And over the past 20 years, the earnings for public workers have declined relative to comparable private sector employees.
And when it comes to the benefits (e.g. pensions), these comprise a larger share of public sector employees’ total income than they do in the private sector. In effect, civil servants have bargained away higher salaries for deferred compensation. This has made life easier for elected officials over the years to balance their budgets and citizens have enjoyed public services at below market rates. But now those same officials want to renege on their agreements by slashing public pensions and they are inflaming the passions of poorly informed taxpayers to gain support for their duplicity.
And yet, even taking the current levels of public pensions into account, state and local employees have lower total compensation packages than their private sector counterparts. On average, total compensation is 6.8 percent lower for state employees and 7.4 percent lower for local workers, compared with private sector employees.
Given all of these facts, newspapers owe it to the public that government employees serve a more honest and accurate depiction of reality.
Baber, Ph.D., J.D., is a professor at California State University, Long Beach. He is director of the Graduate Center for Public Policy and Administration and teaches public sector human resources management as well as courses on public policy. He resides in Rancho Bernardo.

April 11, 2011 at 9:35 a.m. ( | suggest removal )