On Sunday, economist Paul Krugman hit back against GOP claims that public sector employment has increased under Obama, and that such jobs consist mainly of wasteful bureaucrats and somehow count less economically than private sector ones. Back in September it was tea party Senator Rand Paul (R-KY) toeing that line, and this morning it was former Republican gubernatorial candidate Carly Fiorina.
The exchange commenced immediately after Krugman made the point that, had government employment in the current recovery followed the same path it followed under previous recessions in the Bush and Reagan years, unemployment now would be slightly above 6 percent:
CARLY FIORINA: I think it’s important to remember, when we talk about the economy, that a private sector job and a public sector job are not the same things. They’re not equivalent. I’m not saying public sector jobs aren’t important. But a private sector job pays for itself. A private sector job creates other jobs. A public sector job is paid for by taxpayers. […]
PAUL KRUGMAN: But when we say public sector jobs, it is not a bureaucrat in Washington, D.C.
FIORINA: Oh, it is, actually.
KRUGMAN: When we talk about public sector jobs — when we look at the ones that have been lost in large numbers in this — it’s basically school teachers. Don’t think about bureaucrats. It’s school teachers. What we’ve laid off hundreds of thousands of school teachers.
And when we talk about the cuts in public spending that have happened, they are not, you know, some god awful who knows what. It’s actually public investment. It’s largely fixing potholes and repairing bridges.
So, you know, you have this image of these wasteful bureaucrats doing god knows what. What we’ve seen is an incredible drought of basic infrastructure, and laying off hundreds of thousands of school teachers.
FIORINA: It is a fact that virtually every department in every organization in Washington, D.C. has seen its budget increase for the last 40 years. That money is being paid to hire people. The number of people who are — of course there are some teachers…
KRUGMAN: The vast bulk of public sector employees are at the state and local level. They are largely school teachers plus police officers plus firefighters. And your notion that it’s all these bureaucrats — that’s a myth that’s used…
FIORINA: It’s not a myth, it’s a fact. It’s not a myth, it’s a fact. We don’t have enough private escort job creation.
It’s a myth. Public sector jobs at the federal level have actually remained pretty stable over the last forty years. They began and ended the period around approximately 2.8 million, with a bounce to about 3.1 million circa-1990. Public sector jobs at the state and local levels increased significantly over those forty years, peaking at a bit over 19 million total when President Obama entered office. (They’ve fallen since, accounting for the decline in overall public employment.) But nearly all of that growth was in teachers and support staff for the education system, who now total nearly 7 million of those state and local workers.
The other major categories of jobs in state and local public employment are, as Krugman noted, police, firefighters, health care workers, and maintenance workers and drivers for the country’s transportation infrastructure. And the overall population of the country has also been growing, so even though the raw number of state and local workers increased significantly, the ratio of those workers to the overall population did not — 59 per 1000 in 1980 versus 65 per 1000 today.
A new study on government employees’ earnings has the Right buzzing — and some progressive pundits repeating the myth that government workers are “overpaid.”
With the new year, we’ve seen a new round of attacks on working people. Just this week, Arizona Republicans introduced a bill attacking public workers that makes Wisconsin’s look mild by comparison. And just in time to add fuel to the fire, the Congressional Budget Office released a study this week on government employees’ earnings that has the Right buzzing – and even some progressive pundits repeating the myth that government workers are “overpaid.”
When it comes to wages and benefits, those government workers have unions to thank for their good fortune. The CBO notes that around 21 percent of the federal workforce is unionized, as opposed to the 8 percent of the private sector that enjoys union protections. Longtime organizer and senior fellow at the Citizen Engagement Lab Matt Browner-Hamlin pointed out to AlterNet that the private sector labor movement has been decimated by decades of concerted attacks, and indeed in the last year we’ve seen moves both successful and unsuccessful (Scott Walker in Wisconsin, John Kasich in Ohio) to curtail the power of public sector unions on the state level.
And yet the pundit class seems entirely to miss the point. The Atlantic's Jordan Weissman delivered a typically glib read of the study, writing “The upshot: Federal pay might be too high overall, and it’s probably not getting us a better government.” This, he said, is “more or less” the finding of the CBO study. That’s actually a massive overstatement, and in the case of the “better government,” almost entirely an ideological read.
Browner-Hamlin said, “Pitting private sector workers against public sector workers is straight class warfare. Rather than helping lift private sector workers up to the salary and benefits public workers have, the effort is to pull public workers down to the depressed levels of their non-unionized, underpaid and un-benefited private sector peers.”
He continued, “It’s much more beneficial for elites to have the 99% fight against itself for scraps than look at the source of their problems above them.”
The CBO’s findings were much more complicated than Weissman’s simplistic analysis would suggest. While federal employees with no more than a high school diploma made 21 percent more per hour—including their benefits—than private-sector employees of approximately the same level of education, those with a bachelor’s degree were approximately equal, and federal workers with a doctorate or professional degree made 23 percent less per hour than their private sector colleagues.
But you won’t catch too many pundits wondering if private-sector workers with advanced degrees are overpaid. No, instead it’s time once again to call for pay cuts at the bottom—Weissman argues that “as an efficient use of resources, the current setup doesn’t make much sense.” In other words, he thinks we should slash wages on the less-educated workers to be able to pay those at the top more money.
Why the obsession once again with cutting compensation for the working class?
“I was somewhat surprised that the initial reaction to the CBO study focused so heavily on the fact that federal workers with less education earn more in the public sector than their counterparts in the private sector,” Mark Price, labor economist at the Keystone Research Center, told AlterNet. “We probably owe the focus to the fact that the cover of the CBO report is the graphic comparing wages and benefits by educational attainment.”
Price notes that the fact that public workers make more, at the low end of the pay scale, than private sector workers isn’t exactly news, even if it is providing grist for the class war mill right now. John Schmitt at the Center for Economic and Policy Research found that state and local public sector workers earn just below 6 percent more than comparable workers in the private sector—and women in the public sector make 7.4 percent more than those in the private sector. But when he adjusted for experience and education, Schmitt found that overall, public workers actually made about 4 percent less than private sector workers. But instead of trumpeting the fact that the public sector provides a way for women and less-educated people to make better wages, have decent benefits, and support their families, the (white male) pundit class sees this as a negative, that those higher wages should be sacrificed in order to raise the pay of those who already make much more.
“For decades public sector unions negotiated deals which reduced the cost to taxpayers by getting increased health and retirement benefits in lieu of higher salaries,” Browner-Hamlin said. “Targeting them now for being out of step with our essentially unorganized private sector workforce not only requires that we ignore contractual negotiations of the past, but that we forget that the path to reducing the compensation of private sector workers was a deliberate one, orchestrated by the very same types of greedy ideologues who are now attacking public workers.”
Weissman gives a passing nod to the idea that all workers should make a decent living, writing, “It’s great that the federal government is providing livable wages to workers, and their families, who would probably have a tough time of it in the private sector.” But he ignores the history of struggle that won those workers their decent wages and benefits, and also the hits that private sector workers have taken over the past 30 years. Price pointed out that along with the decline in unions in the private sector, the falling purchasing power of the minimum wage and the decline in manufacturing, which used to be a way that less-educated workers could have a middle-class job, have contributed to drive down wages for most people.
“What the CBO study and most other studies of public sector pay reveal is not that the pay systems in government are broken but that middle-class jobs are disappearing from the private sector,” Price said.
Meanwhile on the high end, Price notes that more educated workers stay in the public sector, often, because they are “mission driven”—they are committed to their jobs because they believe in them, not simply because they can make money. While Weissman and Kevin Drum at Mother Jones seem to think that, as Drum puts it, the federal government needs to “compete better for top-level managers and other professionals,” by paying more and that the government would be more efficient as a result, they seem to ignore the idea that paying low-wage federal workers less might make those workers that much less efficient as well. A raise for the workers at the top would have less real impact on their lives than a cut for those at the bottom.
Price also pointed out that the relative equality in pay in the public sector actually helps with morale for all workers. “To take a counter example from the private sector like Apple computers; they couldn’t possibly maintain company morale and productivity if they directly employed manufacturing workers in Cupertino under the same pay and working conditions that allegedly prevail in their contracted factories in China,” he said. “Workers have a sense of fairness that if violated can often undermine productivity. This is the chief reason human resource departments in private companies discourage employees from sharing with one another information about their pay levels.”
It’s not just pay equality that is greater in the public sector. The gender gap, as noted above, is less for public workers, and the racial pay gap is also smaller. (Public sector layoffs, for this reason, have hit women and people of color the hardest in the last few years of austerity—and have fallen hardest on workers without union protections, while union workers were more likely to retain their jobs, as Catherine Rampell at the New York Times noted recently.)
It’s disturbing, then, that the response to a study on workers’ wages should be to call for more inequality, not less.
The obsession with the idea that the private sector’s wages are somehow natural and the result of the “invisible hand” of the marketplace, while the public sector is simply throwing away money, is ideological and the result of years of anti-government rhetoric.