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Public employee benefits are not the problem

BY GUEST OPINION | JANUARY 25, 2011 7:10 AM

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“In this time of budget crunches and recession, why should my taxes go to fatten the wallets of state and local public employees?”

This is the question that some policymakers and pundits want us to start asking. We’re in a deep recession, after all, and it doesn’t make sense that some people should be paid more when others are hurting — right?

Unfortunately, it’s not that simple. By framing the budget problems as an “Us versus Them” argument, opponents of public-employee benefits are actually hurting our economy by failing to understand the benefits we receive when we pay public workers.

Let’s start with a few facts to dispel the myth that public employees milk extravagant wages and benefits out of the taxpayer. A study conducted by the Center for State and Local Government Excellence and the National Institute on Retirement Security found that, contrary to the suggestion of some, public employees are not excessively compensated. Among the findings:

• State and local employees are twice as likely to hold college degrees than private-sector employees. Only 23 percent of private-sector employees have completed college, as opposed to 48 percent in the public sector; this is likely because of the stringent requirements of public-sector jobs.

• Additionally, wages and salaries of private-sector employees are higher than those of public-sector employees with comparable education, work experience, and other indicators of earning capability. Typically, state workers earn 11 percent less than privately employed citizens, and local workers earn 12 percent less.

• Earnings of state and local workers have declined relative to those of comparable private sector employees in the last 15 years — in other words, the wage gap is increasing.

• Even after accounting for the value of retirement, health-care, and other benefits, state and local employees earn less than their private sector counterparts.

“The picture is clear. In an apples-to-apples comparison, state and local government employees receive less compensation than their private sector counterparts,” said Keith Bender, report coauthor and associate professor of economics at the University of Wisconsin-Milwaukee.

So what does this mean? It means that, as far as labor costs go, you often get more bang for your buck in the public sphere.

The government is getting a more qualified, more experienced employee for less than what the private sector pays. This is important, because most services provided by public employees are considered necessary — if society weren’t paying a public employee to do the job, it would have to pay someone else for that work. Advocates of privatization suggest that the government should turn the work over to the private sector, but it is hard to see how privatization would amount to a less-costly alternative, taking into account the demand for higher wages and profitability.

It is important to remember that nearly every dollar paid to public employees goes right back into the state economy, because we both work and live here. We are your fellow Iowans, and we work hard to make the state both economically and civilly successful.

The characterization of spending on public salaries and benefits as wasteful or unjustifiable is off-base and simply uninformed. If a job or service is necessary, public employees are a cost-competitive solution and generate greater returns to the economic activity of the state. Despite being a easy sound bite in discussions and debate, privatization is not always the best solution to our budget woes, and cutting the pay and benefits of our state public employees assails an already ailing working class. During a time of hardship, we must look deeper than the easy-sounding answers to make sure that we don’t hurt Iowans more than we help them.

Ian Gunsolley is the communications chairman for AFSCME Local 183, which represents public workers in Johnson County.


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