During a guest spot on Fox & Friends, Fox News host Mike Huckabee falsely claimed that Gov. Walker's anti-union legislation helps “balance the budget” because “public union workers [make] 30% better wages [and] 70% better benefits than their private sector counterparts.” In fact, after controlling for factors such as education and experience, public union workers in Wisconsin and nationally make less than their private sector counterparts.
Huckabee Falsely Claims Public Sector Workers Make More “Than Their Private Sector Counterparts”
Huckabee: “Public Union Workers [Make] 30% Better Wages [And] 70% Better Benefits Than Their Private Sector Counterparts.” On the February 25, 2011, edition of Fox News' Fox & Friends, Fox News contributor Mike Huckabee claimed Wisconsin Governor Scott Walker's efforts to end collective bargaining power for public sector unions is important because “he's having to balance the budget.” As evidence, Huckabee falsely claimed public union workers make “30% better wages” and “70% better benefits than their private sector counterparts.” From Fox & Friends:
HUCKABEE: Well, he's having to balance the budget. And you can't do that if you're spending more money than you take in. It's really about the budget issue. I know that there are sort of subplots, the unions of the public employees. Interestingly enough, on page 35 of the book, I exactly talk about the fact that we have a train wreck coming. I wrote this almost a year ago. And it now proves to be somewhat prophetic because you can see the meltdown coming. Public union workers, 30% better wages, 70% better benefits than their private sector counterparts. Do the math. If you're the person paying the bill, and the person you're paying is making substantially more, there comes a point at which that intersection is going to be the scene of a wreck.--
DOOCY: We're there! We're there!
HUCKABEE: That's what we have. [Fox News, Fox & Friends, 02/25/11]
EPI Study: WI Public Employees Earn “4.8% Less ... Per Hour” Than Private Sector Counterparts
EPI: “Wisconsin Public Employees Earn 4.8% Less In Total Compensation Per Hour Than Comparable Full-Time Employees In Wisconsin's Private Sector.” A study published February 10, 2011, by the think tank Economic Policy Institute (EPI) found that when "[c]omparisons controlling for education, experience," and other factors are taken into account, “Wisconsin public employees earn 4.8% less in total compensation per hour than comparable full-time employees in Wisconsin's private sector.” From the executive summary of the EPI study:
[T]he data indicates that state and local government employees in Wisconsin are not overpaid. Comparisons controlling for education, experience, organizational size, gender, race, ethnicity, citizenship, and disability reveal that employees of both state and local governments in Wisconsin earn less than comparable private sector employees. On an annual basis, full-time state and local government employees in Wisconsin are undercompensated by 8.2% compared with otherwise similar private sector workers. This compensation disadvantage is smaller but still significant when hours worked are factored in. Full-time public employees work fewer annual hours, particularly employees with bachelor's, master's, and professional degrees (because many are teachers or university professors). When comparisons are made controlling for the difference in annual hours worked, full-time state and local government employees are undercompensated by 4.8%, compared with otherwise similar private sector workers. To summarize, our study shows that Wisconsin public employees earn 4.8% less in total compensation per hour than comparable full-time employees in Wisconsin's private sector.
These compensation comparisons account for important factors that affect earnings, the most important of which is the educational levels of public employees. When comparing public and private sector pay it is essential to consider the much higher levels of education required by occupations in the public sector. As a consequence of these requirements, Wisconsin public sector workers are on average more highly educated than private sector workers; 59% of full-time Wisconsin public sector workers hold at least a four-year college degree, compared with 30% of full-time private sector workers. Wisconsin state and local governments pay college-educated employees 25% less in annual compensation, on average, than private employers. The compensation differential is greatest for professional employees, lawyers, and doctors. On the other hand, the public sector appears to set a floor on compensation, which benefits less-educated workers. The 1% of state and local government workers without high school diplomas earn more than comparably educated workers in the private sector. [EPI, “Are Wisconsin Public Employees Over-compensated?” 2/10/11]
EPI: “Workers With A Bachelor's Degree Or More ... Are Compensated Between $20,000 ... To Over $82,000 A Year Less” Than Private Sector Counterparts. The EPI report also included a graphic showing the average compensation for public and private sector employees in Wisconsin by education:
The February 18, 2011, EPI post accompanying this graphic stated:
The campaign against state and local workers is often justified with claims that they are privileged relative to their private-sector peers or have somehow been cushioned from the effects of the recent recession and slow recovery. These claims are clearly false.
In Wisconsin, which has become a focal point in this debate, public servants already take a pretty hefty pay cut just for the opportunity to serve their communities (Keefe 2010). The figure below shows that when comparing the total compensation (which includes non-wage benefits such as health care and pensions) of workers with similar education, public-sector workers consistently make less than their private-sector peers. Workers with a bachelor's degree or more--which constitute nearly 60% of the state and local workforce in Wisconsin--are compensated between $20,000 less (if they just have a bachelor's degree) to over $82,000 a year less (if they have a professional degree, such as in law or medicine). [EPI, 2/18/11, emphasis in original]
Klein: “The Ones Who Got Played” In Wisconsin “Are The Public Employees.” In a February 19, 2011, blog post, The Washington Post's Ezra Klein discussed EPI's analysis to argue that, in reality, it was the public employees who got the “bad deal” from the state government when negotiating their contracts. From his post:
The deal that unions, state government and -- by extension -- state residents have made to defer the compensation of public employees was a bad deal -- but it was a bad deal for the public employees, not for the state government. State and local governments were able to hire better workers now by promising higher pay later. They essentially hired on an installment plan. And now they might not follow through on it. The ones who got played here are the public employees, not the residents of the various states. The residents of the various states, when all is said and done, will probably have gotten the work at a steep discount. They'll force a renegotiation of the contracts and blame overprivileged public employees for resisting shared sacrifice.
Which gets to the heart of what this is: A form of default. There's been a lot of concern lately that states or municipalities will default on their debt. This is considered the height of fiscal irresponsibility -- an outcome so dire that some are considering various forms of federal support. But the talk that states or cities will default on their obligations to teachers or DMV employees? That's considered evidence of fiscal responsibility. And perhaps it's a better outcome, as defaulting to the banks makes future borrowing costs higher, and can hurt the state economy in the long-run. But it's not a more just outcome. [The Washington Post, 2/19/11]