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NationofChange / Op-Ed
Published: Monday 25 June 2012
The wealthiest Americans have a long-held delusion, passed along through their media outlets to the rest of us, that they pick up the bill for most of our country's needs, and that middle-class public workers and unions benefit from their generosity.
The Facts Make It Clear: Public Workers and Unions are Not Overpaid
The wealthiest Americans have a long-held delusion, passed along through their media outlets to the rest of us, that they pick up the bill for most of our country's needs, and that middle-class public workers and unions benefit from their generosity. But facts, not emotions, are needed to provide the truth. And there are plenty of eye-opening facts that refute the far-right claims.
Fact #1: Government employees make up 16.7% of U.S. employees and receive 17.6% of the pay.
The public vs. private "who gets higher pay?" battle has convincing arguments on both sides. Yet a careful analysis of Census Department data confirms that government employees earn less than 1% more than private sector employees. Recent (2009) compensation figures reveal that:
- 107 million private sector workers earned $4,829 billion, an average of $45,000
- 2.8 million federal government workers earned $192 billion, an average of $68,000
- 4.6 million state government workers earned $226 billion, an average of $48,700
- 14 million local government workers earned $612 billion, an average of $43,000
With all benefits included, the 21.4 million government employees make up 16.7% of U.S. employees and receive 20% of the total compensation. The higher benefits exist mainly at the federal level. For the states, government employees make up 3.6% of the U.S. workforce and receive 3.9% of the total compensation.
The federal pay advantage is largely due to higher education levels and more advanced professional skills. The Economic Policy Institute, Bureau of Economic Analysis, and Congressional Budget Office all acknowledge this. 44% of federal jobs are professional positions (lawyers, economists, engineers), compared with 32% in the private sector. Close to 50% of full-time federal and state and local government employees have college degrees, compared to 35% for private employees.
Fact #2: Union members make up about 12% of the workforce, but their total pay amounts to just 9.5% of adjusted gross income as reported to the IRS.
There are 14.8 million union employees, with a $50,000 median salary. The IRS reported total adjusted gross income of $7.8 trillion in 2009.
Fact #3: CEOs and financial employees, with 11.3% of adjusted gross income, made more than ALL 15 million unionized workers in the United States, and twice as much as ALL 7.4 million federal and state government workers.
This fact highlights the extreme income inequality in the nation and within the private sector. As noted above, the AVERAGE private sector worker makes about the same salary as a state or local government worker. But the MEDIAN U.S. worker salary is almost $14,000 less, at $26,363. While corporate executives and financial workers (about one-half of 1% of the workforce) make multi-million dollar salaries, millions of private company workers toil as food servers, clerks, medical workers, and domestic help at below-average pay. In government, on the other hand, a lower turnover rate and a higher incidence of union membership contribute to wage stability.
Fact #4: The total annual pension contribution of the 50 states is about the same as the total state taxes avoided by corporations.
According to the Pew Center, the latest available annual pension contribution by the 50 states amounted to just under $60 billion.
According to a Citizens for Tax Justice report on the state tax avoidance of 265 large companies, only 3% of the required 6.2% was paid. At that rate, the nonpayment on $1.8 trillion in 2010 corporate profits would amount to just under $60 billion.
Federal tax avoidance is much worse. While corporate profits have doubled to $1.8 trillion in less than ten years, the corporate income tax rate, which for thirty years hovered around the 20-25% level, suddenly dropped to 10% after the recession. It has remained there for three years. That's a $270 billion nonpayment. Makes the pension payment look puny.
Conclusion
Public sector and union workers make modest salaries with hard-earned benefits. Rather than trying to reduce public sector pay, industry leaders should be addressing wage inequality in the private sector by bringing employee compensation closer to the level warranted by 30 years of productivity growth.
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ABOUT Paul Buchheit
Paul Buchheit is a college teacher with formal training in language development and cognitive science. He is the founder and developer of social justice and educational websites (UsAgainstGreed.org, RappingHistory.org, PayUpNow.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.
20 comments on "The Facts Make It Clear: Public Workers and Unions are Not Overpaid"
June 26, 2012 5:29pm
Teachers should get at the most 62.5k a year not 90K or more like some do and the police and firefighters should be paid just like as those in the military on rate so much per week or month NO OVER TIME!
June 27, 2012 8:14am
Police, firefighters, and teachers are not indentured workers, or involuntarily committed to work for the state for a period as are the military in time of war. In a democracy, it is customary for employees to be able to choose to work overtime. In the case of police, many of the problems seen in the US occur far less frequently in Canada, because of greater training and pay than in the US that's consistent throughout Canada. Police departments that have officers working for outside employers lead to conflicts of interest that are so much more of a danger to employees who aren't making enough money to live in the same city in which they work. The same applies to teachers, who are so much better paid in Canada, and always unionized in the public schools, where the educational standards are far higher overall than in the US, although we do have a few problem areas.
Public sector workers are valuable, and government is not a boondoggle, nor a drain on a free market, left to run wild like a cart with a runaway horse. A government that works for people and business, that's paid for by both, can pay people who keep society going a fair wage and good benefits.
June 26, 2012 8:31am
The focus should be on those who receive the really large pensions by goosing their payout with lots of o.t in the last few years of employment or via sweetheart deals with their "overseers." (In my own CA city the city manager recently retired from his $250K salary with a $266K pension.) Also, contracts need to be negotiated with independent negotiators, not with elected officials subject to future defeat by public sector organizing. The recent WI election seems to have used the big payouts to the few at the top of the chain (including former governor and current senate candidate Thompson) to foment widespread opposition to the modest benefits received by school teachers, of all people. Too bad the big money interests have been so successful in crafting the message "you don't have a secure financial future, why should they?" which conveniently shifts the focus away from improving the economic security of the majority. A good starting point would be to provide healthcare for all, like civilized countries do. Even China is heading to some form of that.
June 26, 2012 6:40am
I noticed this article looks at averages of large aggregates of jobs bundled together. Attacks against the public sector tend to compare specific jobs. Why? Well, if a public sector employee did get paid better (assuming all else equal), might not part of the reason be that there are few standouts in that agency (firm) who make millions as we see in the private sector? If the distribution is more even across all public sector jobs, that explains why looking only at certain common jobs would show greater income for the public sector -- there is less going to the extreme cases usually omitted from the comparisons, the stockholders, upper management, etc, that leave less for the average private sector worker.
June 25, 2012 8:47pm
Take the wages a union or public sector worker earns today. The wages that same job paid 30 years ago, adjust for inflation. In the majority of cases you will their income has stayed the same. The problem is the wages of non-union and non-public workers have seen a decline and stagnation in wages.
While blaming huge corporation is easy. We must look at the real cause, Wall street. Millions of hard workering people in this country. Contribute a percentage of their income into a 401k. For a fee an investment firm, invests the funds. The invester then has the responsibility of investing those funds where they will give the highest return. Companies that have the highest profits, are the best ones to invest with. The easiest way to increase profits is to lower the cost of labor.
June 25, 2012 6:16pm
"America has been dumbed down so most are aiding the corporations in the rush to the bottom" and pissants like MARTINTFRE are the result. If the drivel he is spewing were coming from someone in the $500K to $20million a year bracket, his verbal diarrhea would be at least somewhat understandable, but the poor little twat is probably earning $15K to $20K a year. That's what envy and divide-and-conquer look like.
June 25, 2012 5:26pm
St. Augustine Record printed a headline story Sunday that used a fire department leutenant with 25 years experience and overtime to give the impression that government employees in Florida receive outsize pensions. No mention that upper management does not get overtime, that fire and police get to retire after 25 years, not 30 years like all other retirees and that they get much bigger pensions than other employees. Then said that someone in the private sector would have to have saved over a million dollars to get this amount of income. Also said that government employees get cost of living raises every year when no one in state government in Florida (except governors croneys) has gotten any raises in 6 years. Also a name, but no identifying info on person, not a reporter who wrote the story.
June 25, 2012 4:21pm
MArtintfre you are living in LA LA land. The comment "whatever suits their selfish wants at that moment" is beyond stupid. Try telling that to the next emergency responder you call. Where I live it is AGAINST THE LAW for public employees , of any kind, to go on strike. More importantly, public employees ACROSS THE COUNTRY have been giving up wages, benefits, pensions, having to work unpaid (furlough) days and losing their jobs over the past two decades. Ten years ago in my state there were 80,000 public employees and today there are fewer than 50,000. And none of them hired after 1998 even have a pension. FYI: the average public employee pension (if you retired from a state that still has one) is $19.000 after 30 yers. service. And you'll pay 20% or more of health insurance benefit out of that, assuming your state had one--most don't anymore. It's so pathetic folks like you cling to such vile ideology yet still expect a firefighter or cop to speedily show up when you call, clean water to come from your tap or well, the food you buy to be safe, your children to learn to read and write (usually without your participation), your road fixed or plowed, a court to hand out justice, your property kept safe by properly registered at the county clerk, someone to pick up the stray dog bothering your chickens, the airplane you're in not to blow up and on and on. Seems to me it's folks like you wanting more and more for less and less.
June 26, 2012 12:51pm
In my state public employees do not pay into SS. Try working 25 years on a public job with no SS. Every State can negotiate with there given unions, and in the end they agreed to the benefits. At contract time is the time to negotiate fairly, that is hard to do as nobody no longer seems to have the skill set to negotiate fairly!
June 26, 2012 10:50am
That's worthy of an award, Smitty.
June 25, 2012 3:28pm
Martintrf You are a special type of stupid; aren't you? The type I don't bother to waste my breath on since it would be like having a gunfight with an unarmed man. Private sector Unions DO go on strike till dumb asses such as yourself gutted our laws for your own selfish wants, by way of those you support. Its funny your type of person can support, in courtroom, that being at the scene of the crime with the criminals made you an accomplice surely acting and speaking on behalf of the dammed is the same.
June 26, 2012 10:48am
"Martintrf You are a special type of stupid; aren't you?"
Bwahahahaha
June 25, 2012 1:25pm
When Government workers go on strike against the tax payers for more of what ever suits their selfish wants at that moment the tax payers are screwed - forced to pay them at the end of a tax collectors gun.
Like teacher strikes, garbage collectors ,...
What would happen if private sector went on strike against their customers - how would that play out?
Humm - what would happen to wall mart if they went on strike against the customers?
June 26, 2012 5:27pm
Yes while I have changed my mind about goverment workers having a union and collective bargining they should not be alowed to strike because if Teachers go on strike who teaches you kids if fire Fighter or police go on strike who puts out the fire or catches the crooks If say workers at you local supermarket go on strike and close it down you still can go to another supermarket
June 26, 2012 10:46am
I'm almost 60 years old. For most of my life there were no Walmart stores anywhere around where I live. We got along fine without them and all their foreign made goods.
In your Republican, Fox "News, Limbaugh world view you have things backasswards.
June 25, 2012 4:43pm
Gee whiz, Martin...... You make it sound as if selfishness is a bad thing. I thought the going republican meme was that selfishness was good.
And I for one can tell you what happens when the private sector goes on strike. If I hadn't got up and left, I think I would still be waiting for my dinner at what turned out to be a highly over-rated Mexican food restaurant. I'm not sure, but it must have been a union waiter. And you rhetorically ask;......"what would happen to wall mart if they went on strike against the customers?"........ I presume you were talking about Wal-Mart, (you may want to update your spell check). I think what would happen is that its "customers" would have to find somewhere else to shop and probably wouldn't be much bothered except that the mom-and-pops that the Wal-Marts have driven out of business cannot capitalize (pun intended) on the sudden market opportunity. I for one would be glad to see Wal-Mart and it's anti-competitive practices, it's off-shoring imperatives, it's autocratic approach to suppliers and it's thinly disguised contempt for it's employees go the way of the dinosaurs. So I will be encouraging Wal-Mart to strike, but I'll tell everyone it was at your suggestion.
And honestly, I don't think anyone, even the most fundamentalist conservative, is suggesting that there be NO taxes collected. It's really just an argument about who pays, (and who doesn't) and how the proceeds are spent. Taxes are the de facto means that we utilize to shape what passes as our social agenda, like taxing cigarettes out of existence or nearly so. So don't go on thinking that by voting for a conservative, you are going to be magically relieved of your tax burdens. Conservatives love tax collectors just as much as liberals do, just for different reasons.
And if I wish to join with my fellow teachers, or firefighters or police and negotiate a fair wage collectively, how is that in any way a subversion of the system?, Or an extra burden on you?, or the work of Satan or Stalin or Marx? That's simply marketing and negotiating a fair contract for a commodity that we the people require. This comes from the lesson we've been taught by conservatives about "free" markets. And if you are really offended by the concept of a public workforce, if you are really true to your conservative ethique, the next time your house catches fire, don't call up those goose stepping socialists sucking at the public tit in their public financed fire house, let it burn. You will win the admiration of conservatives everywhere.
June 25, 2012 12:20pm
I applaud this fact-saturated article! To my mind it points to a need to prioritize a demand for repeal of tax-cuts for the wealthy and the pillaging of America by tax-dodging and job-exporting corporations in general and the financial industry in particular. I hope government employees and unions will see the wisdom of championing that demand, for the sake of the common good and their own.
June 26, 2012 10:39am
I'm with you, brother.
June 25, 2012 11:23am
This clearly shows the Rethuglican strategy of divide and conquer.Lower one group of workers at a time and then make them envious of those still earning a decent wage even if those people had special training.It all goes back to the fact the rich want to pay no taxes and just want to reap the benefits of exploiting others.The riches lobbyist have gotten their way at the federal,state and local levels and the media have helped the rich promote their ideas of greed that if our neighbor has more then us even if he worked harder pounce on him to make him poor like us,but never attack the corperations because they provide all the wealth.America has been dumbed down so most are aiding the corporations in the rush to the bottom
June 26, 2012 10:39am
Albert, you should change your name to Albert Star.