D. Dowd Muska


Still Waiting for the ‘Shared Sacrifice’

October 06, 2011

Chrysler’s cost per unionized employee, reports The Wall Street Journal, is $49 an hour, down 35.5 percent from 2007. Executives at 20th Century Fox Television have demanded that voice actors for “The Simpsons” take a 45 percent pay cut. (The performers’ counteroffer was a 30 percent whack, plus a portion of syndication and merchandising revenue.) Real disposable income, computed by the U.S. Commerce Department, “decreased 0.3 percent in August, compared with a decrease of 0.2 percent in July.”

But as the Great Recession gives way to the Great Stagnation, not everyone is taking a beating. The voluminous data compiled by federal statisticians prove that life remains awfully sweet for those employed by towns, cities, and states.

Has your income kept pace with inflation the last few years? Yes, if you’re on the payroll at the DMV or a government school. The U.S. Census Bureau hasn’t released figures for 2011 yet, but in March 2010, real, average pay for full-time-equivalent municipal staffers was $4,165. Three years earlier, it was $4,015. At the state level, the story was no different -- $4,471 in March 2010, $4,345 in March 2007.

A useful comparison between the real world and the accountability-free sector is “Employer Costs for Employee Compensation,” an analysis published quarterly by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS). The most recent report covers June 2011, and for all workers, it judged the public premium to be a nauseating 43.6 percent. That’s largely unchanged from what it was in December 2007, the official start of the Great Recession -- back then, the state and local advantage was 42.8 percent.

In every category, June’s hourly costs were higher for government than private entities: wages/salaries ($26.41 vs. $19.81), insurance ($4.83 vs. $2.27), retirement ($3.32 vs. $1.03), and paid leave ($3.03 vs. $1.90).

The BLS’s “National Compensation Survey” examines earnings by region. As savvy observers would assume, public-private hourly pay inequality is most pronounced in deep-blue areas. Here are a few examples (most recent month studied by researchers in parentheses):

• Hartford (July 2010): 48.4 percent

• Chicago (October 2010): 43.6 percent

• Sacramento (June 2010): 40.7 percent

• Honolulu (February 2010): 36.5 percent

• New York City (May 2010): 35.6 percent

• Boston (October 2010): 17.5 percent

Regions in redder, right-to-work states, where government is kept in check by watchful voters, fare much better. Seventeen months ago, Salt Lake City’s public-sector bonus was a mere 4.4 percent. But several places where fiscal sanity would seem to rule need improvement. Nashville’s bureaucrats, as of late 2009, prevailed by 16.8 percent. The comparable figure for Dallas, in March 2010, was 17.7 percent. In Sioux City, the disparity was downright disturbing: 39.5 percent in August 2010.

Liberals frequently trot out the canard that many “public servants” forswear lucrative gigs in private workplaces. If that’s so, why is compensation for managers and professionals almost exactly equal in the two sectors? (Government staffers retain the edge, of course, due to lack of competition and enviable job security.) At the other end of the skill spectrum, service employees savor a pay-and-benefits unfairness that’s nothing short of obscene: 119.5 percent.

According to the BLS, between December 2007 and August 2011, private, nonfarm jobs fell by 5.6 percent. Layoffs in government weren’t nearly as numerous. State employment fell by 1.2 percent. For municipalities, the reduction was 2.9 percent. Revenue gaps offered bureaucracy-crazed, teacher-featherbedding PK-12 schools an opportunity to get lean. Not surprisingly, they haven’t -- just 3.0 percent of educrats were let go between December 2007 and August 2011.

Americans are aware of just how fortunate one is to land a government sinecure. In August, Douglas E. Schoen, who polled for Bill Clinton, wrote that a “wide-ranging national survey of 1,000 randomly selected, registered voters,” as well as 10 state polls, revealed “that voters strongly favor measures to pare the compensation of current and future public employees.” Sixty-four percent would not agree to higher taxes -- and 51 percent were not willing to cut social programs -- to maintain public pay and benefits. By 48 to 40 percent, respondents wanted a freeze in bureaucrats’ salaries.

Sorry, taxpayers, but it ain’t happening.

Analysts whose livelihoods depend on subsidies may disagree, but the data show that nearly four years into a period of severe economic strife, very little progress has been made toward right-sizing both the number of and tribute showered upon employees of towns, cities, and states. The government-job gravy train chugs along, oblivious to the hardships borne by the productive class.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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