All in, Ohio public employees make 43 percent more than private sector counterparts
A new study from the American Enterprise Institute claims that Ohio public employees make 43 percent more than their private sector counterparts when you factor in benefits such as health care, retirement and other protections. An excerpt:
• Ohio public employees receive nearly the same wages as comparable private workers (2.5 percent
less), but
• Fringe benefits for Ohio public workers are more than twice as generous as those paid in the private sector,
meaning that when pay and benefits are taken into consideration public workers receive 31.2
percent more in total compensation than private‐sector counterparts.
• Ohio Public employees enjoy significantly greater job security than private‐sector workers. That job
security has an economic value equal to approximately 10 percent of compensation.
• In total, considering wages, benefits (including retirement), and the value of job security, Ohio public sector
workers are paid 43.4 percent more than those in private‐sector employment.
• Even if the provisions of SB 5 were implemented in full, it is very likely that Ohio public‐sector workers
would continue to enjoy a substantial compensation premium over private‐sector Ohioans.
Read about the study at Capital Blog. PDF of the study here.
• Ohio public employees receive nearly the same wages as comparable private workers (2.5 percent
less), but
• Fringe benefits for Ohio public workers are more than twice as generous as those paid in the private sector,
meaning that when pay and benefits are taken into consideration public workers receive 31.2
percent more in total compensation than private‐sector counterparts.
• Ohio Public employees enjoy significantly greater job security than private‐sector workers. That job
security has an economic value equal to approximately 10 percent of compensation.
• In total, considering wages, benefits (including retirement), and the value of job security, Ohio public sector
workers are paid 43.4 percent more than those in private‐sector employment.
• Even if the provisions of SB 5 were implemented in full, it is very likely that Ohio public‐sector workers
would continue to enjoy a substantial compensation premium over private‐sector Ohioans.
Read about the study at Capital Blog. PDF of the study here.
Interesting stuff, but both sides have a very difficult time proving their point with any exact numbers. Lies, damn lies, and statistics are all that both sides have.
For example, the health services insurance can't really be compared to the private sector. Large groups dramatically bring down the overall costs of the plan. I think there are even some instances where OSU's medical services are used, so how are you going to compare that? They've got one hell of a company nurse! Should you penalize them in the comparison for the savings that they achieve on health services just by default?
Then you have to consider that state workers have very little chance of promotion, profit sharing is non-existent, etc. The risks in the private sector sometimes have a huge payoff. Public sector never gets the good or the bad of those risks.
I find the average pay and benefits of state workers to be good, but not as far out of line as what this is portraying. I think some of the drama being played out is a political move to make it appears as if they are doing something, even if it's wrong. If they REALLY wanted to control the budget, the attack would be on the number of government workers doing jobs that the government shouldn't be doing in the first place.
For every one government job created there is more than 1 private sector job lost. Balancing this so that that government can be a lean and functional asset instead of a drag on the overall economy should be where their emphasis lies. Lower the number of required government workers rather than trying to get more government workers to work for lower wages.
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I disagree Mark. The study does a very nice job of quantifying the entire picture when it comes to compensation and benefits. Most of the public employees are covered in similar sized groups as and average or larger private employer with better benefits and higher costs. There is some advantage to scale in health care but way too many other variables. In health care, the largest providers often are the most expensive. The economic scale model doesn't work as well.
It is a very good study. Meanwhile, the other side claims that nurses won't be available for care. Facts versus scare tactics.
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If you read studies on the other side and discuss this with public employees and private em;ployees you do find that the basis of the study is correct, public employees do make more based on the benefits package. But far less than the 43% stated. And in good economic times, the private sector, taking into account profit sharing and proper "peer" coorelations, have the potential to make up to 50%,and in some case 400%, more than their public couterparts. It would be nice to know exactly how the study was conducted and who the "peers" were. "Conclusions" to studies can be used anyway anyone wants. The 10% security number is a little crazy these days, and with any Republican in office the public sector is not a very secure place to work, so that's about 15 years of Republican congress and another 6 years of total Republican rule so let's take this down to 33% for now. Let's also take into account the risk and reward factor. Private sector jobs have profit sharing, public sector does not. Public sector is secure in it's "blue chip stock" sensibility where private sector jobs can create great windfalls. Note also the "golden parachutes" in the private sector. Also the fact that, if given total control over wages, the private sector would push average wages under the minimum wage in order to provide for better profit margins and thus every day this happens the "secure" job the government provides is more of a secure wage rather than a secure job. Any of us would want the secure employer when the option is an employer who thinks profits only. Let's also take into account the actual money disbursement in the nation and weigh this into the equation. This goes into the risk and reward % I'll use to offset the "security" and the benifits portion of the 43% study. The upper 20% own more than 85% of the nation's wealth, ceo's make over 200%, on average, more then the lowest paid worker in the company and in many case over 100% more than the average wage earner in the company. The bottom 51% of the nation owns only 2.5% of the wealth. Mix this all into a blender and you get the private sector rewards far outweighing and in many cases out powering and out buying and now trying to totally eliminate the public sector and if not eliminating it totally, then eliminating any sense of "security" the job has. Realize that the public is paying for the public to be secure. The same jobs in today's economy in the private sector may be less now, but more in the future as they were in the past, however this comes with the risk inherent in private sector work and "at will" laws. I'll put the private sector jobs when all is actually averaged in, to be worth 150% more than the public sector. I do not see any Koch Brothers or Warren Buffets in the public sector. This study is flawed in many, many ways. The private sector risks and larger power displacement is what tells of the possible complete decline of real private sector wages.
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Dan - Point me to studies on the other side.
Kurt
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