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Getting It Right
More recent studies have recognized and corrected the biases in ALEC s analyses. By and large, these studies have found that public and private employees' wages are about the same and, in some cases, public workers make less than their private sector counterparts. This report will review the studies that have corrected for ALEC s methodological problems and also will present recent data from the Bureau of Labor Statistics that show public workers to be roughly on par with their private sector counterparts. Comparing benefits between the two sectors, however, has proven somewhat more difficult. Benefits vary widely between sectors and the philosophy behind granting certain types and levels of benefits also is different.
The Economic Policy Institute released a briefing paper by Dale Belman and John Heywood entitled, "The Truth About Public Employees—Underpaid or Overpaid?" (1993) Its conclusions included the following:
- States, on average, compensate their employees at levels comparable to similar private employees;
- Overall, public workers gained relative to private workers over the period 1973-1989, but after adjusting for the occupation and education advantages of public workers, there is no evidence that the wage difference of comparable public and private sector workers changed from 1973-1989 (Note: Post-1989 data from the Bureau of Labor Statistics will reaffirm this claim.) and;
- A greater share of public workers are covered by pensions relative to many private firms, which, in an effort to cut costs, have exempted groups of workers, such as part-time employees, from pension plans. Additionally, the cost per employee of a pension plan is much higher for small firms, so they frequently do not provide pension coverage. Studies which do not account for these differences provide inappropriate comparisons.2
Similarly, Steven Gold and Sarah Ritchie, of the Center for the Study of the States, compared similar positions within the two sectors. Using data collected from the National Association of State Personnel Executives (NASPE) and the Council of State Governments (CSG), Gold and Ritchie found that among less skilled positions like clerical, data entry, and manual labor jobs, the salary level in the public sector is usually at least as high as in the private sector. However, at higher level positions and those requiring specialized training like engineering and medicine, a disparity emerges between private and state government payrolls, with state workers earning less than their private sector counterparts.3 Since the majority of public employees are categorized as professional and technical, they would not appear to be as overpaid as the authors of the ALEC report suggest.
2Dale Belman and John Heywood, "The Truth About Public Employees—Underpaid or Overpaid?" Briefing Paper, Economic Policy Institute (Washington, DC: 1993)
3Steven D. Gold and Sarah Ritchie, "Compensation of State and Local Employees: Sorting Out the Issues," Center for the Study of the States, (Albany, New York: 1992) p.12.
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