While rolling out a proposal to cut state employee salaries, the Illinois Policy Institute's John Tillman claimed that "public employees are the new wealth class." We explain why it's misleading to compare overall wage data from the public and private sectors.
At a press conference in Springfield yesterday, John Tillman, director of the Illinois Policy Institute (IPI), rolled out his organization's new, no-tax-hike budget proposal. The plan derives some of its savings from a $900 million reduction in state employees' wages and benefits. To justify that cut, Tillman cited research showing that Illinois state employees earn, on average, 15.7 percent more than those in the public sector (a stat repeated by Crain's and Fox Chicago). He added this bit of hyperbole: "We have a new class warfare underway where the public employees are the new wealth class with higher salaries, better benefits, and lavish pensions." Watch:
Class warfare? Not so much.
Earlier this month, the Seattle-Times conducted an analysis that adds some important context to Tillman's woefully oversimplified wage stats. After breaking the public and private data sets into 200 comparable "occupational groups," the Times found that, in 136 of the groups, state employees in Washington actually made less than their counterparts:
Out of nearly 200 standard occupational categories analyzed by The Times, representing most of the 149,000 or so state employees, median pay last year was higher for state workers than for all other workers in only 74 categories. (Median means half earn more, half less.)
The Times went on to explain the problem with comparing the overall public and private data:
[S]uch analyses don't tell the whole story because the government and private-sector work forces are composed very differently. Washington state's payroll, for instance, includes relatively more high-earning occupations, such as educators and finance specialists, and relatively fewer low-earning occupations, such as wait staff and retail clerks. [...]
For instance, food preparers and servers — a relatively low-paid group — make up 9 percent of nonstate workers but just 1 percent of state employees.
And people working in business and financial operations — a relatively high-paid group — comprise 10.2 percent of state workers but just 4.5 percent of all other workers.
Another interesting observation from the Times' analysis:
Overall, lower-wage state workers tended to earn more than their nonstate counterparts, while higher-paid professionals made more in the nonstate sector.
The median wage for the 2,000 janitors working for the state last year was $13.44 an hour, or $27,955 a year. Their 37,100 nonstate counterparts earned about 6 percent less.
The opposite was true for the state's 1,200 computer-systems analysts. Their median wage last year was $31.47, or $65,463 a year — nothing to sneeze at, but 22 percent below the median for nonstate systems analysts.
This pattern didn't surprise Rick Kearney, director of the School of Public and International Affairs at North Carolina State University, who has written extensively about the factors that determine state-employee compensation.
"In general, private-sector pay is higher than in the public sector, and the higher up the occupational hierarchy the job is, the greater the pay advantage for the private sector," Kearney said.
Similar research here in Illinois (paging the Sun-Times and Tribune ...) would almost certainly show the same thing: that the abundance of low-earning jobs tends to drag down the overall private sector average, making the public salaries look disproportionately large.
In short, as with the overblown rhetoric about the size of government pension benefits, IPI is unduly targeting state workers as a major contributor to the state budget crisis.
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