(NNPA)—After listening to the governor of Wisconsin and financially illiterate journalists, its easy to gain the impression that city, county, state, and federal employees are overpaid slouches who benefit from hefty pensions and generous retirement benefits funded by unsuspecting taxpayers.
Such a conclusion, however, is grossly inaccurate.
Many of the misperceptions about government workers stem from the heated debate in Wisconsin over whether the state should limit the collective bargaining power of state employees. One constant refrain is that public employees are overpaid.
According to an analysis of recent census data by the New York Times, public employees enjoy a pay advantage over those working in the private sector, but not because of the reasons cited by opponents of collective bargaining.
“The Times’s analysis found that over all, median wages for state workers exceeded that of private sector workers in all but three states—Indiana, Missouri, and New Hampshire,” the newspaper reported. “Those numbers, however, can be deceptive. State workers tend to be more highly educated than those in the private sector: More than half of state workers have college degrees, compared to just over one-quarter of those in the private sector. Researchers have also said that states tend to employ few high school dropouts.”
In Wisconsin, the epicenter for the debate over public employees, government pay exceeds private sector pay by 22 percent. But, more than 60 percent of state workers hold college degrees.
Public workers are paid four to 11 percent less than private-sector workers with similar education, job tenure, and other characteristics, according to the Center for State & Local Government Excellence.
The Center on Budget and Policy reports that teachers make up the largest share of local and state government workers, totalling 6.9 million, followed by protective services (law enforcement officers and fire fighters) with 2.5 million, higher education (2 million) and health (1.4 million).
Some experts project that pension shortfalls will reach as high as $3.2 trillion this fiscal year. However, Dean Baker of the Center for Economic Policy & Research, dismisses that likelihood.
“…It is worth noting that the size of the shortfall in many of these funds has likely already been reduced as a result of the fact that the stock market has continued to recover from its downturn in 2008 and 2009,” he said.
Part of the debate over public employees is based on raw politics.
“In many states, Republicans who came to power in the November elections, often by defeating union-backed Democrats, are taking aim not only at union wages, but union power as they face budget gaps in the years ahead,” the New York Times reported.
Wisconsin is one of those states.
“On paper, Wisconsin might seem an unlikely candidate for an assault on unions,” a story in the February 18 New York Times observed. “Like many other states, it has grappled with large spending gaps during the economic downturn, but its projected deficits for the next two years are nowhere near the worst in the country—more like the middle of the pact. Its 7.5 percent unemployment rate is below the national average. Its pension fund is considered one of the healthiest in the nation, and it is not suffering from huge shortfalls that other states are facing.”
Perhaps the most misleading aspect of the debate is that Wisconsin is giving state employees something that they have not earned.
David Cay Johnson destroys that myth in a column posted on www.tax.com.
“When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees’ fight over collective bargaining,” he writes. “Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles.”
He continued, “Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to ‘contribute more’ to their pension and health insurance plans. Accepting Gov. Walker’s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not.
“Out of every dollar that funds Wisconsin’s pension and health insurance plans for state workers, 100 cents comes from the state workers. How can that be? Because the ‘contributions’ consist of money that employees chose as deferred wages—as pensions when they retire—rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.”
Johnson provides this simple analysis: “…State workers are not being asked to simply ‘contribute more’ to Wisconsin’s retirement system (or as the argument goes, ‘pay their fair share’ of retirement costs as do employees in Wisconsin’s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.”
(George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com. You can follow him at www.twitter.com/currygeorge.)