Eagle Forum Legislative Alerts

Saturday, December 22, 2012

Govt workers are overpaid

There is a widespread myth that govt workers like teachers are underpaid, compared to the private sector. But the evidence showed that they are have higher salaries, better job security, better benefits, and better pensions.

Andrew G. Biggs writes:
According to the SIPP data, the average federal worker shifting to a private job actually accepts a small salary reduction of around 3 percent. Similarly, private sector workers who move to federal jobs don't take a pay cut. They get a first-year raise averaging 9 percent, well above the raise other workers get when they switch jobs within the private sector.

Now consider the state and local levels. If any group of public workers is underpaid, conventional wisdom suggests it would be school teachers. ...

Not so. Nationwide, non-teachers who move into teaching receive an average raise of around 8 percent, according to SIPP data, while teachers who leave the profession take an average salary cut of around 3 percent. Similarly, three recent state-level studies (in Florida, Missouri and Georgia) using administrative records found no average wage increase for ex-teachers. ...

In a competitive labor market, superior benefits should allow governments to offer lower salaries while continuing to attract and retain employees. But the evidence indicates that government salaries alone are comparable to, and often more generous than, those in the private sector.

Many public employees honestly believe that they could earn much more in the private sector. As it happens, though, few actually do. With federal, state and local governments paying out almost $1.5 trillion in employee compensation in 2012, this isn't a trivial fact.
Govt workers vote Democrat, and Pres. Barack Obama could not have won reelection without them.

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