PUBLIC EMPLOYEE unions often defend their members' pricey pensions by claiming the benefits make up for salaries that are lower than those in the private sector.
A study released Thursday undermines that rationale. In California, wages of state and local government workers are similar to, or slightly higher than, wages for comparable workers in the private sector, according to the analysis. Add in pension and retiree health benefits for government workers, and the total compensation for career public sector employees is substantially more than in the private sector.
California Foundation for Fiscal Responsibility, which has been spearheading efforts for a statewide pension reform ballot initiative, commissioned the study. The work was done by Michael Genest, state finance director under Gov. Arnold Schwarzenegger; Brad Williams, former fiscal consultant to the Democratic-controlled state Assembly Appropriations Committee and former chief economist of the nonpartisan state Legislative Analyst's Office; and Jay Peters, an actuary and retirement benefits expert.
The salary-comparison analysis is tricky. That's why there has been little reliable information to support or refute the unions' claim of lower salaries.
Taxpayer groups often point to federal data showing that government employees have larger average paychecks than other workers. But that doesn't account for the greater proportion of high-skilled
Labor unions often cite studies showing that workers with similar education make less in government jobs. But that approach doesn't account for possible differences of job demands for similarly educated people in the private and public sectors.
So the authors of last week's study tried to compare apples to apples. Using federal data for the Los Angeles, Sacramento and San Francisco areas, they compared job categories common to both the public and private sectors.
They found that government workers had larger salaries than private-sector employees in more of the job categories, especially in lower-skilled occupations. Conversely, the private sector pays more for top-level management and specialized occupations, like engineering and computer science.
The authors also note that their comparisons don't account for the value of greater job security they found in the public sector. Interestingly, within the public sector, local government tends to pay more than state government for similar jobs.
For public safety jobs, such as police, firefighters and prison guards, for which there are no private-sector comparisons, the analysis compared salaries within California to elsewhere in the country. Even after adjusting for the higher cost of living here, California governments pay significantly more than the national average.
As for benefits, the authors conclude, public sector workers have much better deals than the private sector. Each year, for example, a state worker earns pension and retiree health benefits worth about three times that of an employee in a large private-sector firm. Among government workers, public safety employees have the top retirement benefits, while school teachers have the lowest.
Minutes after the report was released, Steve Maviglio, spokesman for labor groups trying to block major pension changes, blasted Genest and Williams because they are former state workers collecting retirement payments. Maviglio was gubernatorial spokesman for Gray Davis, who approved the dramatic pension increases that are a key cause of today's huge unfunded liability. While Davis acknowledges his costly error, Maviglio issues blistering news releases, using misleading numbers, attacking those who might question the current system.
Maviglio suggests pension reformers have a right-wing, Wisconsin-style agenda of dismantling public-employee unions. Yes, a lot of anti-tax conservatives who hate public employee unions are pushing for pension changes. But so are Democrats like San Francisco Public Defender Jeff Adachi, former Marin County Assemblyman Joe Nation, now teaching at Stanford, San Jose Mayor Chuck Reed and Contra Costa Supervisor John Gioia of Richmond.
This bipartisan problem will push hundreds of billions of dollars of debt onto our children. Progressives should be alarmed because the mounting cost threatens funding for services to the needy. Rather than shoot the messengers, Maviglio and the unions should face up to the reality.
As the study authors correctly conclude, "the current public compensation systems are overcommitted to large vested pension rights, which do not provide state and local governments with adequate flexibility to manage their budgets."
That can't continue.