Monday, February 21, 2011

Wisconsin Public Employee Compensation Study

Here is a link to a recent paper by Jeffery Keefe. The paper compares the compensation of public and private employees in Wisconsin.

It is a detailed and interesting paper.

A few comments:

1. In the executive summary at the beginning of the paper (the very first page of the paper - go read it!) , he says Wisconsin employees are underpaid by 4.8% compared to private sector employees. This is the number you should look at it is the hour for hour comparison. (Not the 8.2% which doesn't take into account the number of hours worked.)

2. Public workers in Wisconsin are highly educated. Approximately 59% of full-time public workers have a bachelors degree compared to 30% in the private sector. When you compare workers, you need to compare apples to apples. In other words, since educational level is a main influence on compensation, you cannot group all workers in the private sector and compare them with all workers in the public sector.

3. You cannot just look at wages. You have to combine the wages with the benefits. Public workers take more of their compensation in benefits. Go look at the chart on pg 5 and you will see, as your educational level goes up, you are paid less and less (compared to the private sector).

I have one final comment. On Wall Street, the pay is big because we are suppose to be getting such good results. Why doesn't this same principle hold for public sector workers?

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