Are Ohio Public Employees Over-compensated?
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February 13, 2011 8:54 pm at 8:54 pm #85365
Are Ohio Public Employees Over-compensated?
Economic Policy Institute – Jeffrey H. Keefe
February 10, 2011
This paper investigates whether Ohio public employees are overpaid at the expense of Ohio taxpayers. The research is timely. Newly sworn-in Gov. John Kasich believes that public employees are overcompensated relative to private sector workers. He is promoting public employee pay cuts, changes in collective bargaining laws, major benefits reductions, and the elimination of interest arbitration for police and fire unions as key to reducing the OhioÃ¢â‚¬â„¢s budget deficit.
The research shows, however, that state and local government employees in Ohio are not overpaid. (When we refer to public employees, we are referring to state and local employees, not federal workers.) Comparisons controlling for education, experience, organizational size, gender, race, ethnicity, citizenship, and disability reveal that employees of state and local governments earn lower wages than comparable private sector employees. Average annual wages and salaries of full-time state and local public employees in Ohio are 5.9% lower than those of comparable private sector employees. However, some full-time public employees work fewer hours on average, particularly college-educated employees. When annual hours worked are factored in, full-time state and local employees earn 3.3% less in wages and salaries than similar private sector workers. Looking at total compensation (wages and nonwage benefits) Ohio public employees annually earn 6% less than comparable private sector employees and 3.5% less on an hourly basis than comparable private sector employees.
These comparisons account for important factors that affect earnings, the most important of which is level of education. Because occupations in the public sector require much higher levels of education, Ohio public sector workers, on average, are more highly educated than private sector workers; 49% of full-time public sector workers in the state hold at least a bachelorÃ¢â‚¬â„¢s degree, compared with 26% of full-time private sector workers. Ohio state and local governments pay college-educated employees 25% less in annual total compensation, on average, than private employers.February 13, 2011 10:33 pm at 10:33 pm #427539
Some Ohio employees are over-compensated. Some are under-compensated. If you are a state employee and have advanced training or an advanced degree, chances are you will be under-compensated. If you have little advanced education or training and have been at the State for a long time, chances are you are over-compensated.February 15, 2011 7:38 pm at 7:38 pm #427540
Traditionally, public employees trade lower salaries for better benefits, in comparison to private employees. They generally have had more job security. Public employees have certain Constitutional protections that private employees lack (no termination without reason and right to a hearing, as in the Freshwater case). Kasich and the legislature would find it difficult to remove these protections.
What is troublesome, and potentially disasterous for Ohio, is the effort to curtail the right of public employees to collectively organise. There are Constitutional issues such as the right to petition, assembly and free speech that may influence the right to organise. Generally, if private workers have the right to organise trade unions, and to bargain with employers, then public employees should also. It is one thing, in the face of budget shortages, to curtail pay and benefits of public employees. It is another to elimiate their say on how this would be accomplished, which is what Kasich seems to want.
Further, public employees don’t have to strike to create chaos and shut down the state. They can go slow or work to rules only, or file legal challenges in Federal Court. Kasich and the legislature can forbide strikes but it might be hard to enforce if law enforcement refuses to arrest people. Might we hope for another Egypt here?February 16, 2011 1:05 am at 1:05 am #427541
The average public employee makes 30% more than a comparable private sector job- they can retire at 50 AFTER 25 YEARS OF SERVICE and live for 40 years and get 70% of their salary and they have free healthcare and pay no state taxes –
Yes they are tremendously overcompensated and over paid and need to pay their fair share. The public employee unions HAVE distorted equity. If you work 30 years and the can retire and live for 40 years with 70% of your salry and free health care. If you made 30K per year – you would need to have saved 1,000,000.00 and at 3% for $30K per year. THIS IS UNSUSTAINABLE – Gene Harris with the CPSS makes $250K and gets an $50K per year bonus and will retire at 60 with $150,000 pension and free healthcare compliments of the Columbus Public Schools – DO YOU THINK SHE IS A) WORTH IT AND OR b) CAN PAY HER OWN WAY – I DO! The entire Columbus City School Board should be fired – lock, stock and barrel! They are robbing the tax payer and the property owner blind! IMHOFebruary 16, 2011 1:18 am at 1:18 am #427542
Your compensation claim is in direct contradiction to this study. Care to elaborate on how you arrived at this number, or any of your claims? Free healthcare? Pay no state taxes?
As for retirement, this varies greatly by organization.February 16, 2011 1:28 am at 1:28 am #427543
It would appear that the study only covers actual working years. Would be more interesting to see a total cost over lifetime which would include defined benefit pension plans and healthcare, especially in jobs with a 50-60 year old retirement provisions.February 16, 2011 1:40 am at 1:40 am #427544
pez wrote >>
It would appear that the study only covers actual working years. Would be more interesting to see a total cost over lifetime which would include defined benefit pension plans and healthcare, especially in jobs with a 50-60 year old retirement provisions.
Just FYI, once a state worker or teacher retires, they cost the taxpayer nothing. Police and Fire have their own system of which I’m not very familiar.February 16, 2011 1:47 am at 1:47 am #427545
Plus 1 to Hugh’s statement above. You can’t lump all public sector employees into one group.
Public sector workers will not receive social security, as someone in OPERS I contribute 10% of my gross pay every year toward the pension fund (a much higher contribution rate than most people’s 401K and social security contributions).
The primary retires who leave at 50 are public safety workers, do you want 55 year old firefighters climbing ladders and 60 year old police officers chasing criminals?
No one seems to have an issue with a person who receives SSI at 65, but if I file for my pension at 60, with more than three decades of work experience in the system, significant financial contributions into the system and my obligations are suddenly unsustainable?February 16, 2011 2:20 am at 2:20 am #427546
class warfare? why is it that whenever folks try to get the richest folks to pay a bit more this ultra hyperbolic term is used, but not when it is the workimg/middle class who are being screwed?February 16, 2011 3:18 am at 3:18 am #427547
I’m actually pretty offended by the full bore war on state employees. Just from people I know, they are obviously and clearly paid less than people in the private sector (where I am). It is just absurd – unless you start with a study that treats a minimum wage employee at Burger King with a college educated state worker, it is just obvious from personal experience. Seriously, what is with the hate against state workers?February 16, 2011 3:54 am at 3:54 am #427548
lazyfish wrote >>
class warfare? why is it that whenever folks try to get the richest folks to pay a bit more this ultra hyperbolic term is used, but not when it is the workimg/middle class who are being screwed?
Who in this thread used the term “class warfare?” Or, if you mean to refer to someone not on this thread, can you cite where you’re drawing this from? This isn’t a class warfare issue, at least not the way the real redistributionist programs are. At least, not unless we’re trying to treat public workers and private workers as separate “classes,” which isn’t generally what people mean when they speak of class.
As to why that term *is* used whenever large numbers of people try to use the democratic process to demand ever more from the far smaller number of the nation’s most productive citizens–well, there’s definitely a reason that the term gets invoked in those circumstances. The wealthy are not there to serve as pinatas for social spending, particularly not direct transfer payments to those who haven’t earned it.
Also, the EPI bills itself as nonpartisan, but it isn’t. You only need to spend about ten seconds on its homepage to realize that. Because of that, I’m curious as to how they “controll[ed] for education, experience, organizational size, gender, race, ethnicity, citizenship, and disability” to “reveal that employees of state and local governments earn lower wages than comparable private sector employees.” In particular, I want to know what relevance EPI thought that any factor other than education and experience had. For example, with respect to organizational size: Does this mean that they only compared government workers with other educated workers in massive organizations (e.g., Fortune 500 companies)?
I’d also be curious as to whether there was any control for average hours worked during the course of a given month/year. Not only do government workers get several more holidays than the private sector, but most aren’t at the office at 6:00, let alone 9:00.February 16, 2011 4:09 am at 4:09 am #427549
class warfare is one of the national Rethuglician talking points, not sure anyone on this board has used it, but I think the Dems and Union folks would be wise to toss the rhetoric bomb back at the GOP’ers. Assaults on the working and middle class for the benefit of the rich and management types is class warfare. I believe Kasick (sic) is paying his exes more on average than they have been paid in the past…ah executive compensation it makes me tingle.
not sure calling investors the most productive class is true in that they technically don’t produce anything, except tax sheltersFebruary 16, 2011 5:01 am at 5:01 am #427550
Yes, walking around calling Republicans “Rethuglicans” will definitely impress people with your keen grasp of substantive issues. Keep at it.February 16, 2011 6:39 am at 6:39 am #427551
this will seem a little mixed and it is but this is wh i know from firthand experince . I went to the DCF in Florida ( I know not C-bus ) and i saw well alot of very poor people trying to get hel and I saw alot of very expensive cars in the employee parking lot and alot of apathy from the employees and alot of I am just not going to help you attitude from the employees . I know again this is in Florida but I recall being in Ohio at the BMV or DMV which ever (I’vve been through a couple of staes in the last two years doing music and what not so it’s a little confusing) and litening to the employees complain how they where not going to get a raise this year but Coleman jus tredid his office and they thought it was unfare. I know a lot of people that well just do not get a raise every year just because it is a new year now i think the majority of the conversation is for or about people in a higher class of jobs and pay scals but some stae workers are nothing more than a hotel clerk McDonalds Papa Johns make money out the wazoo yet the employees make little for the unbeliveabe work they do (yes they actually work alot and hard and without breaks but you you wouldn’t get the mangers to admit that) So
some of theese workers sould take a cut . However I thnk the point here is that Kasich wants to cut education wants to cut other things that Republicans are just sick of paying for ,the service o the poor people I just described like education, public transit etc . Reps want to suck the sytem drive starve it death set it up to fail and blame it on the left because and this is first hand experince they jus can not stand other people using there money to help themselves into a better position . sorry about the mispelling i went to a public school that was grossly underfunded and the teachers where underpaid .February 16, 2011 8:56 am at 8:56 am #427552
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