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Posted at 3:21 PM ET, 02/22/2011

Are Wisconsin's state and local workers overpaid? Part II.

By Ezra Klein

Jim Manzi has posted a critique of the Economic Policy Institute's study (PDF) suggesting that Wisconsin's public-sector workers are underpaid relative to their private-sector counterparts. It basically boils down to the argument that this sort of thing is hard to measure. The study controls for most every observable worker characteristic that we can imagine controlling for. But there are, Manzi says, an "all-but-infinite" number of differences beyond that. Perhaps going into the public sector says something about a person's level of ambition, or ability to take risks and tolerate stress, or tendency to innovate -- something that, in turn, makes the private-sector worker worth more or less to the economy.

And fair enough. Maybe there is some systemic difference between Hispanic women with bachelor's degrees and 20 years of work experience who put in 52-hour weeks in the public sector and Hispanic women with bachelor's degrees and 20 years of work experience who put in 52-hour weeks in the private sector. If anyone has some evidence for that, I'm open to hearing it. But the EPI study is aimed at a very specific and very influential claim: that Wisconsin's state and local employees are clearly overpaid. It blows that claim up. Even in Manzi's critique, there's nothing left of it. So at this point, the burden of proof is on those who say Wisconsin's public employees make too much money.

By Ezra Klein  | February 22, 2011; 3:21 PM ET
 
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Comments

Taking a step back, we have to keep asking why exactly is private sector compensation the gold standard here, considering the way that it's stagnated over the past 30 years? The right-wing elite are trying to pit public sector workers against private sector workers in a race to the bottom. Their goal is stirring up resentment in Joe Six-Pack that the guy working the same job for the government got a 2% raise last year when he didn't. Keep the proles divided against themselves while they pocket the enormous tax breaks and corporate profits.

Posted by: steveandshelley | February 22, 2011 3:53 PM | Report abuse

Manzi's critique is so thin as to be almost nihilistic, basically falling into the 'there are so many people, you just can't say' category. If that's the best anyone can do ...

Posted by: drinkof_more | February 22, 2011 3:57 PM | Report abuse

For the people who equate taxes with theft, I think the answer is, "anyone whose salary is paid by taxes makes too much money."

The longer version would be, "I work hard for my money and the government steals it and gives it to people who don't work as hard as I do. Since they do not work as hard as me, they must be lazy. If they weren't lazy, that'd have a real job instead of working for the government. Anyone who is lazy does not deserve a full paycheck. Since they are lazy and get a full paycheck, they are overpaid."

And when you say something like, "But isn't your wife a public school teacher?" The answer is often, "Well, SHE'S not lazy, but she's always complaining how lazy everyone else is. SHE is actually overworked and deserves a raise, but everyone else gets paid too much."

That's the generalized form of the conversation I hear all the time in my part of Texas. Admittedly, I'm being a bit unfair in my characterization, but considering I also hear these same people say things like, "The good thing about Katrina is that it washed away so much trash." (referred to black people), I don't feel terribly guilty about poking fun at their "everyone is lazy but me and my spouse," routine that I hear so often.

In fact, I'd bet dollars to donuts that if I sent this post to my next door neighbor he'd reply with a "joke" about how there is no such thing as a Hispanic woman that works 52 hours a week.

Posted by: Nylund154 | February 22, 2011 4:04 PM | Report abuse

There is no objective measure of value. Value can be determined only in voluntary exchange.

Thus, the question of whether state and local government workers are over or underpaid is an unanswerable one. No voluntary exchange occurs.

The state and local workers are willing to work - which suggests fair compensation from the workers' perspective - but we cannot know if over or underpayment occurs unless the other side of the transaction is also voluntary, which it is not.

If, by voluntary means, state and local workers can increase their compensation relative to their current pay under coercive taxation, then they are underpaid. If their pay would fall under voluntary transactions, then they are overpaid.

Posted by: justin84 | February 22, 2011 4:05 PM | Report abuse

well put Justin,

I will also add that in my school district you'll find many teachers subbing or looking to apply. I know of at least a half dozen that my family is friends with that work in pre-schools that have been applying for years to get into the district. Private schools and day cares conversely don't have such waiting lists and you never hear of someone opting out of their public sector insurance plan to go onto their private school or daycare's insurance plan (if they have one)

Posted by: visionbrkr | February 22, 2011 4:11 PM | Report abuse

Wouldn't the market in some ways dictate this? Is there some sort of rush for private sector workers to get cushy feather bedded overpaid gummint jobs? Not that I see. In many ways general office management level jobs with the government are seen as jobs of last resort.

Posted by: yellojkt | February 22, 2011 4:11 PM | Report abuse

It seems to me that it would be relatively easy to compare the salaries of teachers in the public sector to teachers in the private sector.

Posted by: tomtildrum | February 22, 2011 4:28 PM | Report abuse

"For the people who equate taxes with theft, I think the answer is, "anyone whose salary is paid by taxes makes too much money."

Of course not. Value is determined via voluntary exchange. If a teacher who earns $35,000 at a public school could earn $40,000 if that school was privatized, he is clearly underpaid.

"The longer version would be, "I work hard for my money and the government steals it and gives it to people who don't work as hard as I do."

Actually, the whole issue comes down to "my money and the government steals it". Everything else is irrelevant.

It's not that teachers are lazy. Most (albeit not all) of the teachers I know work very hard. In all honesty, I'm not even mad at them, as I'm pretty sure hardly any teachers (or other public workers) look at this issue in this light. Individual teachers aren't the problem - it's the system.

To me, this is about the principle of the matter. For example, my objection wouldn't change if you cut teacher salary in half, or if you doubled their working hours. I'm not worried primarily about getting value for my money, I'm worried that that it isn't up to me - and the other taxpayers - to decide.

I sometimes criticize the value we get (particularly from the inner city schools), but that's primarily to highlight the idea that dumping more money into the system isn't going to fix it from a utilitarian perspective. Especially when some of the broken points aren't even part of the "system".

Posted by: justin84 | February 22, 2011 4:30 PM | Report abuse

Fair or not isn't the relevant question. It's what can be afforded. Just pay them what the state can afford. If they stay it's fair, if not they can quit.

Posted by: MrDo64 | February 22, 2011 4:31 PM | Report abuse

If public workers were paid handsomely, everyone would be trying to be a public worker. In fact, the opposite is true. The best and brightest of our country go right to Wall Street, not to Madison, Wisconsin. In fact, I can honestly say I've never encountered someone in the private sector who expressed a desire to work for the public sector, as least as far as pay is concerned. There's simply not as much financial upside.

It's impossible to take claims of overpayment seriously when the architects of our financial crisis literally made billions upon billions of dollars off of the American taxpayer, and got nothing other than a minor fine. Walker is giving American businesses tax breaks to create shortages that he is asking public workers to absorb.

But I'd imagine this is the conservative purists intention: create an environment where nobody would want to work in the public sector but desperate underachievers, thus fulfilling their prophecy that government isn't efficient.

Posted by: workmonkey | February 22, 2011 4:48 PM | Report abuse

MrDo64, "what the State can afford" is a tricky question when you're talking about budgets in the billions of dollars and the ability to tax to raise revenue. We should want our public employees to be compensated competitively with their private sector counter parts because we should want our government agencies to function well with talented employees. If the state is going to be in court against private attorneys, we don't want the State's attorneys to be totally crappy, having fallen back into government work for lack of better options. We don't want talented scientists going from doing important basic science to doing me-too drugs at pharma companies because it pays lots more. This isn't to say that pharma only does me-too drugs. I'm just saying that government serves lots of important functions and we should want it to do them well, and much of that comes down to having employees that are talented and with reasonably good morale.

Posted by: MosBen | February 22, 2011 4:57 PM | Report abuse

justin84, if your primary argument isn't about value, you might as well give up the ghost on the argument now. We don't have a direct democracy and we never have. We get to elect our legislative and executive representatives, but that's (mostly) where our direct imput stops. We don't get to decide whether or not we like every dollar spent by the government. You're going to pay for highways in states that you never visit and you're going to pay for military actions you don't support. That's how it goes, and it's in no risk of changing any time soon.

Posted by: MosBen | February 22, 2011 5:11 PM | Report abuse

I don't get why this matters.

If public unions are underpaid...then isn't the next question...What are Wisconsin union members fighting for then?

My guess is they are not underpaid, otherwise they'd be proesting union headquarters not the Governors Mansion

Posted by: Mazzi455 | February 22, 2011 5:20 PM | Report abuse

The real problem that the liberals try to hide behind is the raw quantity of government employees.

This is what has happened in New Jersey.


Since 2000, growth in public sector employment significantly outpaced gains in both total
nonfarm and private sector payrolls. The overall statewide growth rate was only 0.2 percent
while private sector jobholding has remained flat. The public sector has grown on average by
1.2 percent per year.

Posted by: krazen1211 | February 22, 2011 5:23 PM | Report abuse

This chart displays the massive decline of student:teacher ratios.

http://nces.ed.gov/programs/coe/2010/section4/table-qpt-1.asp

And this chart displays the same data with the number of total public teachers.

http://nces.ed.gov/programs/digest/d09/tables/dt09_064.asp

We could slash 500,000 teachers and return to Clinton levels.

Posted by: krazen1211 | February 22, 2011 5:26 PM | Report abuse

"justin84, if your primary argument isn't about value, you might as well give up the ghost on the argument now. We don't have a direct democracy and we never have."

If your point is that my arguments aren't going to change things, then I agree you are probably correct. Then again, your input matters just as much as mine does.

"We get to elect our legislative and executive representatives, but that's (mostly) where our direct imput stops."

Are slaves who can choose their masters any more free than those who cannot?

"You're going to pay for highways in states that you never visit and you're going to pay for military actions you don't support. That's how it goes, and it's in no risk of changing any time soon."

Could have said the same thing about chattel slavery in 1790. Hey, you might not like the idea of people owning other people, but that's how it goes, and it's in no risk of changing any time soon.

Are you really not bothered by other people wasting your money? Committing atrocities - with your money?

I mean, I'm bothered by spending other people's money on things I otherwise approve of.

Posted by: justin84 | February 22, 2011 5:47 PM | Report abuse

Everyone seems to be missing the BIG picture here. The Clinton – Bush economic policies were horrendous for America!!! NAFTA, Globalization, Repeal of Glass Steagall, and Real Estate collapse. Our country suffers from 16 years of BAD economic policies.

Now that Wall Street gambled away everyone’s pension money, WI wants to balance their books and blame teachers for the mismanagement of our economy. It’s bad enough that the tax cheat Timmy G bailed out his friends on Wall Street. Now Republicans want to put the nail in the coffin for all of us by busting unions. Then we can all compete with GUEST WORKERS at half our pay. So you see not one person went to jail and now teachers get blamed for deficits that Clinton and Bush caused.

Well at least Warren Buffet got his Medal of Freedom from President Obama because after all, if not for Uncle Sam ole Warren would have been eating at McDonalds for Thanksgiving. Call me if you want to learn something!!!!

Posted by: coastie2 | February 22, 2011 5:53 PM | Report abuse

One can easily PROVE that Wisconsin public workers are overpaid compared to their private-sector counterparts.

One JUST HAS TO OBSERVE HOW TERRIFIED THE UNION WORKERS ARE OF POSSIBLY HAVING TO RE-ENTER THE PRIVATE SECTOR and really work for a living. If the private sector offered them more, they would just let all of this happen and leave for it - right? 8-)

Posted by: souldeep64 | February 22, 2011 8:28 PM | Report abuse

Whether there are minor differences one way or the other in the average pay of public vs. private sector workers is beside the point of whether public-sector workers are "overpaid" and whether public-sector workers should have the right to negotiate decent pay and benefits just like everyone else. Neither is anywhere near overpaid compared to the amount of money by, for example, Wall Street executives. The politicians in Wisconsin and elsewhere are scapegoating public employees for budget issues that are not their fault at all. Massive cuts in corporate taxes as well as the economic problems created by the financial crisis are what's caused budget deficits. And in Wisconsin, Miller created the budget deficit himself by pushing through more tax cuts. Those who are truly overprivileged in this country, the really wealthy people who own the politicians lock, stock and barrel, will be laughing all the way to the bank if average Americans don't see through this sham "crisis" and demand that public workers in Wisconsin and elsewhere maintain their collective bargaining rights and be paid decent wages and benefits.

Posted by: meltonj1 | February 22, 2011 8:53 PM | Report abuse

Jim Manzi is right. It's fair to ask whether assuming that 52-year old has MBA or a MS in the sciences and have been challenged and created profitable ventures for private industry should earn no more than the 52-year old government worker who reluctantly entered civil service to get the student loan forgiveness after an expensive decade in pursuit of becoming a liberal arts scholar.

Posted by: cprferry | February 22, 2011 9:20 PM | Report abuse

The reason people enter the private sector is the ability to rise in ones career early and be well compensated in both money AND responsibility. The tenure system limits both in the public sector and stifles opportunities to grow one's career. I have met very few public sector workers that in due time didn't approach their jobs as if uninspired and hopeless. At some point it becomes a job to collect a paycheck not press the limits of the industry.

Posted by: cprferry | February 22, 2011 9:30 PM | Report abuse

The only clear fact is that Wisconsin has a $3.7 Billion budget deficit...and unlike the Obama adminstration, they cannot just print more money. States have to live within a budget...like most families in America. When you over-spend, there comes a time when payment must be made. I hope the "public servants" of Wisconsin saved some of their union money because they are on the wrong side of this issue!

www.eclecticramblings.wordpress.com

Posted by: my4653 | February 22, 2011 9:37 PM | Report abuse

If Wisconsin government workers are underpaid then all the better for the government to strip the ridiculous rule that an entity can bully their way in and claim hundreds of dollars from each workers' paychecks without facing a single vote challenging their position.


And some progressives called the individual mandate a bad conservative idea because it forced people to buy from private insurers. However, apparently conscripting millions of civil workers' paychecks into the campaign chests of private, corrupt union thugs is an essential right that calls for shutting down schools and essential services to protect.

Posted by: cprferry | February 22, 2011 9:44 PM | Report abuse

"There is no objective measure of value. Value can be determined only in voluntary exchange"

You mean "voluntary exchange conducted honestly and with perfect information by brilliant immortals, and free of externalities and agency", don't you?

Posted by: brickcha | February 22, 2011 9:49 PM | Report abuse

The study seems to treat education fairly generically. If a Harvard graduate working at Goldman Sachs makes more than a Marquette graduate working in the finance department of the state of Wisconsin, this study would call the public worker underpaid... that doesn't quite seem to be the case though.

Posted by: cdosquared5 | February 22, 2011 9:49 PM | Report abuse

Has there been any dispute over the $100k compensation figure for teachers in Milwaukee and isn't this fairly prima facie evidence of being overpaid, irregardless if you want to produce studies comparing teachers to other advanced degree professionals like lawyers, MBAs and engineers?

Posted by: cdosquared5 | February 22, 2011 9:53 PM | Report abuse

--*Are Wisconsin's state and local workers overpaid?*--

Justin84 nails it with his first comment.

I would add that if one is a proponent of a system that can't answer Klein's question in about half a nanosecond, and if one proffers the question, anyway, then one really isn't too bright.

Klein also sez, "[T]he burden of proof is on those who say Wisconsin's public employees make too much money."

One could easily test it. Cut the government middleman out, and let parents voluntarily decide what they're willing to pay to have their children educated by those miserable, insufferable incompetents. The fact that the government has to use force to maintain the current level of pay ought to be a rather large clue.

Posted by: msoja | February 22, 2011 10:10 PM | Report abuse

"The Wisconsin Legislature enacted the Qualified Economic Offer (QEO) law in 1993. The QEO law - and the revenue controls that restrict the amount of money school districts can raise - were enacted in order to limit school spending. Those measures were combined with a commitment that the state would provide two-thirds of the costs of schools on a statewide average (this figure varies by community).

Under the QEO, school boards have the option of unilaterally limiting pay and benefits for K-12 teachers so long as the combined increase is 3.8%. The law allows school districts to avoid true collective bargaining regarding compensation and important school quality issues.

As rising health insurance costs have eaten up most of the 3.8% total compensation target, teacher salaries in Wisconsin have stagnated and even declined. As a result, Wisconsin teacher salaries fell 6.8% from 1997-98 to 2007-08, when adjusted for inflation. For 2007-08, Wisconsin's teacher salaries ranked 21th in the nation at $49,051, down from 20th the year before, and below the national average of $52,308."

(from the WEAC website)

Posted by: Patrick_M | February 22, 2011 10:20 PM | Report abuse

"One JUST HAS TO OBSERVE HOW TERRIFIED THE UNION WORKERS ARE OF POSSIBLY HAVING TO RE-ENTER THE PRIVATE SECTOR and really work for a living."

Pro-jec-tion. Stop looking for scapegoats for signing away your own rights at the workplace.

Posted by: pseudonymousinnc | February 22, 2011 10:21 PM | Report abuse

Justin84 - "I mean, I'm bothered by spending other people's money on things I otherwise approve of."

Exactly. There are days when I'm glad we have *five* aircraft carriers (and support ships) in or near the Red Sea, like today, but I understand that many people aren't in favor of it, and I say, let them keep their money on spend it on what they do favor, free riders and all the other horse crack that Marxists continually confuse themselves with be damned.

Posted by: msoja | February 22, 2011 10:26 PM | Report abuse

--*Are Wisconsin's state and local workers overpaid?*--

Klein's question is nonsensical in another way, too. It's one thing to talk about the average pay of individuals, but then one should consider the whole bloated apparatus in which the individuals work. How many paper pushers, do nothing bureaucrats, diversity officers, spokespeople, therapists, counselors, toadies, and union hacks are all lumped in the nearly meaningless average pay figure? More or fewer than in private sector education? And I don't mean charter schools.

Posted by: msoja | February 22, 2011 10:41 PM | Report abuse

"You mean "voluntary exchange conducted honestly and with perfect information by brilliant immortals, and free of externalities and agency", don't you?"

Nah, just regular people brickcha, though I would agree the transaction has to be honest and not fraudulent.

There's no objective value for anything, though I'm willing to be corrected.

So tell me, what's the objective/correct value of a gallon of gasoline?

Posted by: justin84 | February 22, 2011 10:48 PM | Report abuse

--*For 2007-08, Wisconsin's teacher salaries ranked 21th in the nation at $49,051, down from 20th the year before, and below the national average of $52,308.*--

The Wisconsin Education Association Council really wrote the "21th"? Yes, they did.

http://www.weac.org/collective_bargaining/What_is_the_QEO_.aspx

That's a quality education product they're promoting there, yep. Sure.

Besides, PatrickM, it means nothing to compare one corrupt, incompetent, bloated government education bureaucracy to another, unless one wants to brag about the sheer amounts of value being squeezed out of the honest rubes who don't know what else to do but meekly comply with the demands of their betters.

Posted by: msoja | February 22, 2011 10:49 PM | Report abuse

The WEAC site is a gas.

Here's union member Sandy Harn, ready to party on the taxpayer's dime, after winning a vacation in a union drawing:

//cite
It's vacation time!

Sandy Harn of Fond du Lac is all ready to go on vacation! Sandy won luggage and a condo vacation in a WEAC Savers' Club drawing at the WEAC Convention. Sandy is a regular user of the WEAC Savers' Club, saying she has saved on Wisconsin Dells water park passes, restaurants, hotels and golf outings, among other things.

"It's amazing what you can find on the Savers' Club," she said.
//end cite

It's freebies and discounts galore for those hard working public servants!

Posted by: msoja | February 22, 2011 11:06 PM | Report abuse

"Has there been any dispute over the $100k compensation figure for teachers in Milwaukee and isn't this fairly prima facie evidence of being overpaid, irregardless if you want to produce studies comparing teachers to other advanced degree professionals like lawyers, MBAs and engineers?"

I will continue to maintain that we cannot know for certain, particularly at the individual level.

If a teacher earns $100,000/yr at a public school teaching 100 students throughout the day, and each set of parents would be willing to pay $1,000.01 or more per year to enroll their child in this teacher's class, then he/she is underpaid.

At certain levels of compensation, the likelihood of a given teacher being underpaid increases. For example, suppose a public school teacher has 150 students throughout the day, and parents would be willing to pay just $500/yr to enroll their kids with her. If her total compensation is less than $75,000/yr, then she is underpaid.

Also, there is also the possibility that a teacher who earns $30,000 is overpaid, relative to what parents would pay to enroll their children in his/her class.

Obviously there is more to the cost of schooling than teacher compensation (building, lights, books, heat, etc), but for these perhaps we assume that the school offers a tuition charge for fixed expenses, and a separate tuition charge for each class.

Posted by: justin84 | February 22, 2011 11:10 PM | Report abuse

ps. I wonder if Sandy Harn's students are part of the sixty six percent of Wisconsin's 8th grade students who are unable to read proficiently.

Still, I suppose she really cares.

Posted by: msoja | February 22, 2011 11:17 PM | Report abuse

Little creep Ezra should have done his homework better as he really doesn't have the chops to blog about adult issues. Why doesn't he go back to his JournoList pen pal buddies to get guidance on how to think like a post-teenybopper.

Or maybe union rules and all that stuff is over 100 years old and not even relevant anymore to us young moderns...!

Posted by: djman1141 | February 22, 2011 11:25 PM | Report abuse

"Here's union member Sandy Harn, ready to party on the taxpayer's dime, after winning a vacation in a union drawing..."

Evidently msoja is unaware that large membership organizations derive revenues from being able to attract partnerships from private businesses that will trade discounted rates for direct marketing access to the large pool of members. The AARP, the American Automobile Association, airline mileage programs (just to mention a few) all engage in such partnership activities. This creates no loss to "the taxpayer's dime."

Obviously, the libertarians (and anarchists) would prefer that there be no public education at all. That is the end game for the extreme right. But for the remaining 99% of the population who believe in public schools, a roughly $50k average salary for a school teacher and a "saver's club" union benefit is hardly offensive or scandalous.

The purpose of my posting the information about the Wisconsin QEO law is to convey factual information which has not been well-publicized. Wisconsin teachers have already had significant limitations in place for over 18 years that limit their power to collectively bargain over compensation, and that their salaries really are not at all remarkable, when compared to their peers in other states, or when compared to a typical working American with a college education.

I don't know if there are other public employees in Wisconsin that are overpaid, but that does not appear to be the case for Wisconsin's public school teachers.

Posted by: Patrick_M | February 22, 2011 11:40 PM | Report abuse

--*Evidently msoja is unaware that large membership organizations derive revenues from being able to attract partnerships from private businesses that will trade discounted rates for direct marketing access to the large pool of members.*--

Of course, and one wonders how the earnest taxpayers of Wisconsin feel about seeing their tax dollars going to support that large membership organization which affords its members those luscious discounts and freebies. It's more bennies that the rubes aren't getting, but are still financing to one degree or another, and not voluntarily, in case you need reminding.

Posted by: msoja | February 23, 2011 12:05 AM | Report abuse

--*Obviously, the libertarians (and anarchists) would prefer that there be no public education at all.*--

Au contraire. Have all the public education you want. Just make it voluntary, and make its financing voluntary.

Posted by: msoja | February 23, 2011 12:09 AM | Report abuse

"Earnest taxpayers in Wisconsin" overwhelmingly oppose Walker's insistence on stripping collective bargaining rights from public employees:


http://voices.washingtonpost.com/plum-line/wiaflm1%20%28public%20memo%29.pdf


National Gallup polling data from the "earnest taxpayers" nation-wide indicates that a mere 33% support fiscal reform by removing the rights of public employees to collectively bargain with their employers:


http://www.gallup.com/poll/146276/Scaling-Back-State-Programs-Least-Three-Fiscal-Evils.aspx


Stripping state employees of their rights to collectively bargain is an idea that was not part of Walker's campaign platform. It was never argued in the gubernatorial debates. It was introduced without opportunity for adequate testimony and debate. It is a "trojan horse" agenda item and it is not the will of the people of Wisconsin. The Governor's approval rating in Wisconsin is sinking like a stone.

Posted by: Patrick_M | February 23, 2011 12:36 AM | Report abuse

"Just make it voluntary, and make its financing voluntary."

The usual anarchist claptrap. Enrolling in public education already is "voluntary." We already have alternatives in the form of private schools of all sorts, and home schooling as well. But access to a publicly funded education is a right that every state provides and values.

The economic disaster that will befall the first red state that might fall prey to extreme anarchist-libertarian notions, and make all funding for education "voluntary" would be hilarious (if it were not so sad).

All of this is OT with respect to the common sense question of whether the public sector employees in Wisconsin receive excessive or unfair compensation for their services. I have yet to see a coherent argument that workers in Wisconsin public agencies are being compensated more than others with similar skills and responsibilities.

Posted by: Patrick_M | February 23, 2011 1:01 AM | Report abuse

I think one fundamental flaw in this whole debate is that the question is asked backwards. It should not be a question of if and why unionized public sector employees have better pay/benefits, even when the economy is tough, but why private and non-union employees do not enjoy the same benefits, even in an era when corporations are making record profits.

When the question is asked this way, it becomes clear that the budget is neither the issue nor the reason for the attacks on the private sector, and what is at stake is not a states financial solvency. What is at stake is the corporations and their shareholders ability to continue to make obscene profits by denying private sector employees the same benefits enjoyed by unionized private sector workers.

Until corporation and white collar workers give up their exponentially larger tax breaks, exemptions, and loopholes, the workers who they employ should not be clamoring for unionized workers to sacrafice more, they should be clamoring for their employers to start to make even a little sacrafice.

Making the middle class poor and the poor even poorer will not improve the economy nearly as much as asking millionaires and billionaires to join the middle-class and poor americans in our sacrafices.

Posted by: johnqpublic1 | February 23, 2011 4:48 AM | Report abuse

The economic disaster that will befall the first red state that might fall prey to extreme anarchist-libertarian notions, and make all funding for education "voluntary" would be hilarious (if it were not so sad).

-------------------------------------------

I must admit to being a little confused here as to your seeming equation of anarchists and libertarians. While these ideologies to share some tenets, they are far from the same thing.

Most anarchist traditions, while believing that people should govern themselves as they see fit and without a formal or centralized "state", believe very strongly in individual rights and the collective rights of workers. Hence, the early labor movements and organizations across the globe, were strongly influenced by this aspect of the anarchist ideology.

In comparison, libertarianism is almost the exact antithesis of this. While it shares some anarchist beliefs such as the belief that the state should not be involved in an individuals life or decisions, it is really more concerned with government intrusion into the market, and is of the belief that government should not regulate the market at all as they believe that the market will regulate itself. Of course, any laws concerned with the rights of workers, which anarchists would applaud as they offer individuals better rights, would be seen by a libertarian as an unjust intrusion of government on business.

Posted by: johnqpublic1 | February 23, 2011 5:02 AM | Report abuse

"Nah, just regular people brickcha, though I would agree the transaction has to be honest and not fraudulent.

There's no objective value for anything, though I'm willing to be corrected.

So tell me, what's the objective/correct value of a gallon of gasoline?"

I am not disputing that there is no "objective" measure of value. I am disputing the idea that markets are necessarily the best way of estimating or ranking value. They can be in limited cases, but in most real world circumstances, the externalities and other market failures lead them wildly astray and allow democratic and technocratic methods (or even common sense) to beat the markets in terms of accurating assessing value and the proper way to invest our capital and time.


Posted by: brickcha | February 23, 2011 6:54 AM | Report abuse

Ezra writes: "But the EPI study is aimed at a very specific and very influential claim: that Wisconsin's state and local employees are clearly overpaid. It blows that claim up. Even in Manzi's critique, there's nothing left of it. So at this point, the burden of proof is on those who say Wisconsin's public employees make too much money."

Not sure if anyone else has pointed this out, but that's not true at all. Controlling for additional variables could easily change the sign on that coefficient. Who's to say that controlling for only five or six variables makes this claim "clearly" untrue?

This is the problem with using regression analysis without random assignment. You get wildly different results depending on what you choose to put into the model. Tomorrow, the folks at Heritage could 'prove' the exact opposite of what the folks at EPI just 'proved.'

Posted by: trooperim | February 23, 2011 7:15 AM | Report abuse

I guess I assumed that public workers in Wisconsin were on par with public workers in my community in Ohio. While the median household income in Boardman Ohio is less than $60,000, the employees of Boardman township make Cadillac wages and benefits. The average police salary is over $80,000 and many are in the $90,000 and up range. Senior officers can accumulate almost 40 vacation days/year, have no deductible health care, and pensions the envy of the working world. They can accumulate sick and vacation time and cash it in during their last 3 years to increase their average salary and increase their pension payout. Then there are take home cars, clothing allowances, and other perks. Then there are work rules whose only purpose is to generate overtime.

Now maybe Wisconsin's public workers aren't on a similar plateau compensation wise. Here in Ohio, many public workers are overpaid and we can no longer afford the taxes to support it.

Posted by: mellonbill | February 23, 2011 7:21 AM | Report abuse

Question? Would you like to be able to campaign for a specific person to be your boss and as soon as he or she was elected, they'd be the person you dealt with for conditions of employment and fringe benefits? I sure would. Public Employee Unions donate most of the money, from member dues, to get Democrats elected, then those same people are so beholding to union managers, that equity and fairness is not a factor. Scratch my back and I'll scratch yours.
The solution: Public employees can unionize, but in no way can they contribute to any political entity and while I am giving advice, let's make National Unions illegal. Locals fine, National or co ordination with National Unions illegal--How is that for leveling the playing field? That is the way we treat companies. Violate antitrust laws and get broken up or go to jail--Why do unions have that(to organize nationally) power and not companies.

Posted by: wjeretidwell | February 23, 2011 7:31 AM | Report abuse

"I am not disputing that there is no "objective" measure of value. I am disputing the idea that markets are necessarily the best way of estimating or ranking value. They can be in limited cases, but in most real world circumstances, the externalities and other market failures lead them wildly astray and allow democratic and technocratic methods (or even common sense) to beat the markets in terms of accurating assessing value and the proper way to invest our capital and time."

Markets simply provide a value that both the buyer and seller agree upon. There is no way to objectively come in and say "no, the buyer is wrong, he should have really paid five cents more than that." Anyone else can simply swoop in with different assumptions and get a far different number. Once buyer and seller are happy, then that's your value, as estimated by their preferences. If there is an external costs that infringes on someone else's property rights, then such a loss can be redressed via the courts.

There is no way to be sure that the technocratic method gives you a better answer than the market, as again there is no objective or correct value to go on. There is no way to precisely quantify things like external costs or benefits. In fact, given the lack of knowledge available to the technocrat, the results are almost always worse. Consider that people are complaining about the lack of investment in infrastructure by government, and that's after the government had $800 billion at its disposal to invest if it chose. As Ezra has noted, the infrastructure problem remains more or less about as bad as 2008. You had Ezra noting that the bill did things as silly as put windows on an unused building.

What's worse, is that even if technocrats could figure out the correct prices and the correct investments - which theory and experience have demonstrated they cannot - it would come with a lot of baggage attached, such as the disastrous war on drugs and global empire. This spending almost certainly a waste (in that I doubt people would voluntarily pay much for it).

Posted by: justin84 | February 23, 2011 8:00 AM | Report abuse

"The usual anarchist claptrap."

A state can exist with voluntary funding.

"The economic disaster that will befall the first red state that might fall prey to extreme anarchist-libertarian notions, and make all funding for education "voluntary" would be hilarious (if it were not so sad)."

Poor fools we are. Couldn't survive without a king.

"National Gallup polling data from the "earnest taxpayers" nation-wide indicates that a mere 33% support fiscal reform by removing the rights of public employees to collectively bargain with their employers"

That's great. Get the state out of the business, and two thirds of current taxpayers will be happy to fund schools with a unionized workforce. Or, keep the politicians in charge, but don't come crying to me if the occasional governor decides collective bargaining is no good for his/her state.

Posted by: justin84 | February 23, 2011 9:28 AM | Report abuse

Ok Ezra you made a good point. When you gave the hypothetical example of the Hispanic female public v. private worker a lightbulb went off. I though he's (Ezra) on to something. Then this scenario came to mind. Comapare a office worker(could be male white young) in any circuit court system who files pleadings or motions and works 40 hours a week. By the pay standard that person could be considered under paid. The clerk is performing a valuable service. Contrast that with a (male, white, young) Columinist for a major News Rag (Wapo) who connsiders himself wonkish, wrties columns that always begin and end with the same self serving slant. He works maybe 40 hrs a week (I bet I'm being generous) however, there's no empirical evidence of the value his writings, Most likely over-paid. Ezra you great article!

Posted by: Herbert1 | February 23, 2011 9:39 AM | Report abuse

Of course the government workers are over paid. They do not earn any money, they take their money from the over taxed private sector that makes money.
Mr Klein are you over paid?

Posted by: yokohlman | February 23, 2011 10:49 AM | Report abuse

Omitted variable bias is a real thing, and could be at play here. But to me, the most likely omitted variable would be "greater desire to help people than to seek personal profit."

Posted by: madjoy | February 23, 2011 11:13 AM | Report abuse

Leaving the requisite conditions for a market to produce a VOLUNTARY transaction that could then be assess the range of the subjective value of the parties directly involved to the the side (i.e., Justin84, the transaction itself is not voluntary in the absence of these conditions and involuntary transactions tell us nothing about value, subjective or objective)... Although you are correct to question so-called "technocratic" valuation that neither validates the purported "market" (of unicorn and fairy descent, i.e., as much of a utopian concept as there ever was) valuation by the private sector nor establishes that public sector employees are overpaid.

Klein makes a very simple point that represents one of the few objective truths that we can know: Manzi's argument is circular. Predicate: Public sectors workers are overpaid. Q: How do we know? A: Because they are public sector workers.

You can draw out all the details, but each of these arguments reduces back to this. So to change the conversation to something a bit more fruitful . . .

Is it possible that at least some public sector employees work for the government out of a sense of civic duty? Every time I have toyed with the idea (and never quiet made the move), there was a sense that there was something special about serving my community and country that gave a greater sense of purpose than enriching the firm's owners. Does that justify cutting their pay and benefits--because they would be otherwise compensated by a sense of civic virtue. If so, why not do it for other public sector employees like the police, firefighters, active combat troops . . . after all, they are motivated by civic duty and insulated from the market. They also get the added bonus of respect from everyone they serve, unlike other public servants who, like the troops returning from Vietnam, have to hear from a vocal minority that they are worthless, evil people. Maybe we should only pay honorarium to troops -- let them eat respect.

All the same, I am a loyal member of my personal pragmatist party, and if you are not going to raise taxes (on the people with the lowest tax burden of inhabitants of major industrialized powers) then you are going to have to cut services or force people to provide services for less. You can't have European services (clean streets, good libraries, healthier people) with a railroad baron's preferred tax policy. Wisconsin at least is being forced to take the problem square on.

Posted by: orgbluspider | February 23, 2011 11:26 AM | Report abuse

"A state can exist with voluntary funding."

Yes. Somalia is a good example. I think life in non-voluntary Wisconsin looks a lot better.

"Poor fools we are. Couldn't survive without a king."

Since you applaud the kingly behaviors of Gov. Walker, that also appears to be true.

"That's great. Get the state out of the business, and two thirds of current taxpayers will be happy to fund schools with a unionized workforce. Or, keep the politicians in charge, but don't come crying to me if the occasional governor decides collective bargaining is no good for his/her state."

Duly noted (once again) that the end game is to "get the state out of the business [of education]." And I don't recall that I came crying to you about anything at all. I merely noted that a newly-elected Governor is attempting to institute a sweeping change in the rights of workers to organize and bargain that was not part of his campaign platform, about which there has been virtually no opportunity for open hearings and political debate, and about which the polls suggest that the electorate does not support.

Apparently, such autocratic behavior by a politician is laudable to a libertarian, since the net effect is to edge the government a little closer to getting "out of the business" of funding and providing basic public services.

Posted by: Patrick_M | February 23, 2011 12:25 PM | Report abuse

"I must admit to being a little confused here as to your seeming equation of anarchists and libertarians. While these ideologies to share some tenets, they are far from the same thing."

I am making the equation, because I think that if you probe the commentary of certain participants in this thread (some of whom self-identify as libertarian), you will find that they are not really concerned in the slightest with the rights of workers to organize and collectively bargain with their employers over their wages and working conditions.

Their ultimate solution is that there be no taxation to support publicly funded schools, and that all funding of education be entirely "voluntary." The notion that collection of taxes (that result from decisions of democratically elected representatives of the people) to fund basic public services as a social evil is sufficiently extreme in my view to place them at the anarchist end of the political spectrum.

Posted by: Patrick_M | February 23, 2011 12:38 PM | Report abuse

Patrick_M,

The Wisconsin QEO law was repealed two years ago. (2009 Wisconsin Act 28).

Hmm, now that I think of it, I wonder whether that repeal has had anything to do with the current budget situation?

Posted by: Policywonk14 | February 23, 2011 1:19 PM | Report abuse

"Hmm, now that I think of it, I wonder whether that repeal has had anything to do with the current budget situation?"

Hmm, no, it did not:

http://www.fox21online.com/news/wisconsin-teacher-salaries-remain-largely-same-despite-elimination-qeo

Posted by: Patrick_M | February 23, 2011 1:35 PM | Report abuse

Conservative: Public employees are paid too much, because I do not value public services, and work in the private sector--which is inherently morally superior and much more demanding. Unions are therefore evil and I don't want to pay their evil salaries via evil taxes,

Liberal: But but but but public services are important, and unions ensure that our good public servants are compensated fairly

Conservative: I don't need public services, because I'm a boot-strapping individualist whose success is attributable solely to my independant actions. Screw those losers in public service--if they weren't imcompetent hacks they'd be in the private sector, which they aren't, so they must be incompetent hacks. Also, I'm really freakin' awesome.

Me: You are all fools. Continue your small-minded pissing contest while our overlords suck us all dry. Left v. Right is how the top divides the bottom, and NONE OF US ARE ON TOP.

Posted by: steve4130 | February 23, 2011 4:24 PM | Report abuse

I find it curious that public sector unions are finally united. Typically they stab each other in the back and harm each others' interests. I recall back in the 1990s when there was a budget crisis in a local county. The teachers union and police used negotiations, voting and lobbied to protect their benefits. However, some school officials - nurses and administrators - weren't as powerful as those other unions and were selected for budget cuts and staffing cuts to balance the budget. All because the teachers and police refused to rescind any of the unsustainable promises made to them. The same happens frequently in higher education where graduate assistants and adjuncts are held down by their managers and supervisors, the professors and administrators whose interests have greater influence.

Isn't it fair to ask whether any public union, small or large, should have that right to have that much influence? By allowing not only negotiating but also forcing 1-2% of paychecks into substantive lobbying efforts. Surely those dues should be voluntary and their use determined by workers not union bosses.

Posted by: cprferry | February 23, 2011 11:00 PM | Report abuse

Here is a liberal critique of the various EPI studies on this subject (it may not apply to this one in particular):

Unions raise wages above the base standard of private markets. A significant higher number of public workers are unionized. Therefore there is an non-trivial number of employees that make more than their private market counterparts.

We don't get to play both hands here. We can either choose to argue that unions pay more or that the number of public workers making more than they would in the private sectors is statistically insignificant.

To be honest I never found the EPI studies rigorous, which is good since I always thought unions paid more (see the point above). For instance, in my old high school teachers were paid based on education level and their graduate education was subsidized. There were then two positive incentives towards getting more education. Does the greater education make them better teachers? Maybe. But I also cannot think of a single private sector position that would give a guidance counselor a substantial pay raise for their grad studies in Egyptology as they did with my friends mom. It would perhaps be better to measure the teachers improvement directly instead of assuming that the photography PhD was helping in teaching English.


@Chris_Gaun
chrisgaun@gmail.com

Posted by: chrisgaun | February 28, 2011 6:56 AM | Report abuse

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