Scapegoating Public Sector Workers

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Budget shortfalls in Wisconsin

by Andrea Orr

At its core, the fierce debate waging in Wisconsin and several other states over public-sector unions can be traced to a single, false argument: that public sector workers are the cause of the budget crises states now face. In fact, the severe state budget shortfalls around the country are not the result of excessive compensation paid to the teachers, police officers, and firefighters who perform essential services, but to the economic downturn that left millions of workers unemployed while eroding property values. State and local tax revenues suffered as a result and today, more than three years after the nation plunged into the worst recession since the Great Depression, state and local governments are still trying to recover.

In the face of a budget shortfall, austerity can seem like the simplest and the best solution. But the austerity measures proposed by Wisconsin Governor Scott Walker are misguided for a number of reasons. First, they fly in the face of a large body of research that shows that public-sector workers actually earn less than their private-sector counterparts. Since Walker’s proposals do not address the real causes of the budget crisis, they cannot provide the solution. Rather, austere cuts in wages and compensation, on top of the concessions these workers have already agreed to, threaten to make the current situation worse by imposing more economic hardship on millions of families. Furthermore, Walker’s attempt to eliminate collective bargaining rights for these public-sector workers does not even address the current crisis. It is an opportunistic move to strip more workers of a basic right that has for years improved working conditions for union and non-union workers alike.

Regarding wages, the argument that public-sector workers are overpaid seems to stem from simplistic apples-to-oranges comparison that neglects to factor in multiple variables, including level of education. Across the board, public-sector jobs require a higher level of education than those in the private sector. For example, 59% of public-sector workers, but only 30% of private sector workers in Wisconsin hold four-year college degrees. These differences are explored at length in EPI’s paper Are Wisconsin Public Employees Overcompensated? which compares total compensation, adjusting for factors such as experience, citizenship, hours worked, as well as education. The paper finds that in Wisconsin, full-time state and local workers, including school employees, are under-compensated by 8.2% relative to otherwise similar private-sector workers. When accounting for differences in hours worked, the research shows that public-sector employees are undercompensated by about 4.8%.

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