The age old, always contentious debate over public versus private sector employee compensation is heating up once again. Dueling reports issued this week come to very different conclusions.
Governor Rick Snyder released his “2011 Citizen’s Guide to Michigan’s Financial Health” report on Monday and the media pounced on one small section that concluded public sector workers earn more than twice that of private sector workers.
Yesterday, “Debunking the Myth of the Overcompensated Public Employee” – a study funded largely by pro union groups and authored by Jeffrey Keefe for the Economic Policy Institute in Washington – found that when educational attainment is factored in public sector workers are relatively underpaid.
Messrs. Snyder and Keefe agree on at least one thing: It is impossible to do pure apples-to-apples comparisons of public and private sector employee compensation.
“These are not apples-to-apples” comparisons, Snyder conceded after this week’s summit. “It’s what I call macro-data.”
And from Mr. Keefe, “Ideally, we would compare workers performing similar work in the public sector with the private sector.”
But they can’t. Unless public sector and private sector jobs are mirror images of each other the best one can do is compare employees based on education level, years of experience, and hours worked. This is why there are so many studies and such disparate conclusions.
The only significant data in either report are trend data. Both conclude, albeit in different ways, that in the last decade public employee compensation has been trending upward while private sector compensation has trended down, reaffirming what Snyder has been saying all along: “Private companies and workers have made many sacrifices. We all need to share in this. So it’s now the public sector coming into more alignment with what the private sector has already done.”
Following the release of Monday’s report, he said, “We have serious problems, It’s not time to cry about it; it’s not time to whine about it. It’s time to go to work.”
Michiganderanians, while not in lock step on what to call themselves, are blessed with many assets: craftsmen who design and produce world class products, fertile ground for agriculture, world class research universities, a physical beauty that belies the term “rust belt state” and precious fresh water – often referred to as the gold of the 21st century.” Given policies that promote growth, Michigan’s future is bright.
In spite of national trade policies that have contributed to a less competitive Michigan, its automobile manufacturers, suppliers and union leaders decided to stop blaming others [Washington] for their woes. Instead, they have focused on what they can do here and now to turn things around.
Both business and labor made painful cuts. And from Wall Street to Main Street, observers have concluded that Michigan’s core manufacturing sector, once given up for dead, will be viable well into the future, a testament to the merits of strong leadership, common goals and shared sacrifice.
Snyder seems to understand that it’s time for state government to follow the private sector’s lead. He’s said it before and he’ll no doubt say it again: There is shared sacrifice that’s going to be needed to get this done, but it’s about solving problems, not fighting.” Are public employee unions listening?