Government Workers Not Overpaid

[Toro]

I lost a lot of respect for you.

empiricism > ideology

Empiricism is an implicit ideology that presumes shared acknowledged goals and I kind of doubt that the two of you share the same goals.

Empiricism is not ideology. Empiricism depends on testable hypotheses to test whether or not an idea is correct. It is the antithesis of ideology.

 

[Samson]

Government workers are still not overpaid relative to the private sector if that is baked in.

The first is an apples-to-apples comparison of workers among education levels. The government’s workforce is more educated than the private workforce. For instance, the government’s “college plus” level is 54%, while all private workforce is 35%. “Some college” is 14% of government workers, 19% of the private workforce. So this is important to control for.

Speaking of "Baked In...."

What degrees does the government workforce have?

I submit that for their to be a fair comparison between public and private pay, then you cannot just compare education levels: A PhD in Regulating Underwater Basketweaving is not going to be worth anything in the Private Sector.

The largest classification of government employees are teachers. All teachers have a degree. (Or almost all, anyways.)

Are you implying that taxpayers and society would be better off if only a quarter of all teachers had degrees per the ratio of the public sector, and that we should pay them the average salary of a private worker?

I'm saying that there are practically no jobs (but I'll imagine a quarter) in the private sector for BA's in Elementary Education, therefore the aggregate comparison of what the private sector pays vs what the public sector pays is not a fair comparison.

This can be extrapolated to most government positions: nowhere else does simply having a degree matter. In the public sector, employees must have degrees that are VALUED.

When there is no market for a resource, how can we fix a value, much less compare the value with the market?

 

[CrusaderFrank]

How clueless do you have to be to compare workers with no bottom line responsibility to those that have bottom line accountability?

The Executives at Fannie and Freddie that tanked the US residential market all got to keep their jobs while my banker friends at Lehman and Bear Stearns got wiped how, how can you possible say the government workers are underpaid?

 

[Norman]

Here is my take on this, which might be completely stupid:

Neither of them is overpaid for the simple fact that in markets you compete for the jobs. So more qualified take higher paying jobs.

In other words, government doesn't pay enough?

Go to private sector.

If govt pays more than private sector, then it just means highest skilled are going to go there.

What is more concerning is that the public employee is not as productive. And some are even arguably quite useless...

 

[Samson]

Here is my take on this, which might be completely stupid:

Neither of them is overpaid for the simple fact that in markets you compete for the jobs. So more qualified take higher paying jobs.

In other words, government doesn't pay enough?

Go to private sector.

If govt pays more than private sector, then it just means highest skilled are going to go there.

What is more concerning is that the public employee is not as productive. And some are even arguably quite useless...

What comes first: Chicken or Egg; Useless or Underpaid?

 

[Toro]

How clueless do you have to be to compare workers with no bottom line responsibility to those that have bottom line accountability?

The Executives at Fannie and Freddie that tanked the US residential market all got to keep their jobs while my banker friends at Lehman and Bear Stearns got wiped how, how can you possible say the government workers are underpaid?

What about those bankers at AIG, BofA, Citi, etc., making seven, eight figures who got bailed out by the government?

 

[Toro]

I'm saying that there are practically no jobs (but I'll imagine a quarter) in the private sector for BA's in Elementary Education, therefore the aggregate comparison of what the private sector pays vs what the public sector pays is not a fair comparison.

This can be extrapolated to most government positions: nowhere else does simply having a degree matter. In the public sector, employees must have degrees that are VALUED.

When there is no market for a resource, how can we fix a value, much less compare the value with the market?

Why do you think it can be extrapolated to most government positions? There are a whole lot of accountants, lawyers, computer programmers, engineers, etc., employed by the government.

Of course, there is a market for a resource where wages are a price signal that regulates the supply and demand for labour, as it does in any profession. The average teacher makes about $45,000. What do you think the demand would to be a teacher if the average wage was $450,000? Or $100,000? Do you think there wouldn't be more demand to enter teacher college?

 

[KissMy]

If government employees were underpaid then there would not be such a huge demand for cushy government jobs.

WSJ: We've Become a Nation of Takers, Not Makers

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?...

Don't expect a reversal of this trend anytime soon. "Surveys of college graduates are finding that more and more of our top minds want to work for the government"...

The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn't pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.

The same is true of almost all other government services. Mass transit spends more and more every year and yet a much smaller share of Americans use trains and buses today than in past decades. One way that private companies spur productivity is by firing underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we've gotten.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.