The debate over public employee pay and benefits has played out more like an episode of the X Files tan a documentary, particularly over the past several months. A new UC Berkley study reveals the truth about public employee pay and benefits. Â No more mystery, no more hyperbole, because â€œThe truth is out there;â€ finally. From the study:
Recently, there has been a great deal of debate and consternation over the compensation of public-sector employees across the U.S. It has been asserted that state and local government employees are overpaid compared to workers in the private sector. In California government workers have been vilified as scandals and anecdotes pass as confirming evidence of exorbitant pay. This research is especially important given the outrage over the pay of municipal officials in Bell, California. The outrage over what happened in Bell is reasonable and just. Many of the players immediately resigned and on September 21, 2010 eight city officials were arrested.1 Those arrested include the former city manager of Bell, Robert Rizzo, who was making nearly $800,000 a year. Rizzo was charged with 53 counts. It is alleged that Rizzo, without approval from the City Council, actually wrote the conditions of his own contractâ€”the case keeps growing in terms of scope and involved officials. It is clear by the arrests and scores of allegations that the situation in Bell was not in line with usual procedures.
While anecdotes that stem from public-sector corruption capture much attention, it is a data-driven analysis of public-sector pay and compensation that is needed to answer the question: How do the pay and benefits of public sector workers compare to those in the private sector? This is a legitimate question that should not be answered anecdotally. The research in this paper investigates empirically whether California public employees are overpaid at the expense of California taxpayers.
The results from this analysis indicate that California public employees, both state and local, are not overpaid. The wages received by California public employees are about 7% lower, on average, than wages received by comparable private sector workers; however, public employees do receive more generous benefits. An apples-to-apples comparison, or one that controls for education, experience, and other factors that may influence pay, reveals no significant difference in the level of employee compensation costs on an annual or per hour basis between private and public sector workers.
The report concludes:
The Great Recession continues to leave a great deal of economic pain and scarring in its wake. But, the vilification of government workers is sorely misplaced and has left the real culprits of this devastating downturn off the hook. Compensation received by public sector employees is neither the causeâ€”nor can it be the solutionâ€”to the stateâ€™s financial problems. Only an economic recovery can begin to plug the hole in the stateâ€™s budgetâ€¦
Public sector workers help our communities to thrive and provide services that make it worthwhile to live in themâ€”it is wrong to blame them for the fallout from the greatest economic downturn since the Great Depression.
Read the report for yourself here.