Gov. Daniels Bashes Public Employees As ‘A New Privileged Class’

Politico ran a long piece today on what it sees as the growing trend of lawmakers “focusing with increasing intensity on public workers and the unions that represent them, casting them as overpaid obstacles to good government and demanding cuts in their often-generous benefits.” This is, of course, nothing new, as lawmakers love to bash public sector employees in tough fiscal times, to justify cutting their pay.

Sen. Scott Brown (R-MA), for instance, said during his campaign that “it’s not right that lesser-paid private sector workers suffering through a recession have to pay for expensive government salaries.” Politico quoted Gov. Mitch Daniels (R-IN) saying that public employees are the “new privileged class,” who are “better paid than the people who pay their salaries”:

“We have a new privileged class in America,” said Indiana Gov. Mitch Daniels, who rescinded state workers’ collective bargaining power on his first day in office in 2006. “We used to think of government workers as underpaid public servants. Now they are better paid than the people who pay their salaries.”…“Who serves whom here? Is the public sector — as some of us have always thought — there to serve the rest of society? Or is it the other way around?”

Public employees, particularly when economic times are tough, are an easy target. But there’s little truth to Daniels’ blanket assertion that all public employees make more than their private counterparts.

There is a disparity between average pay in the public sector versus the private. But this is not a fair, straightforward comparison, for two reasons. First, public employees are more educated, with 45 percent holding a college degree, compared to 29 percent of the private sector. Second, far more private employees work in jobs earning less than $25,000 per year, with many not making enough to clear the poverty line, which drags down the average.

It makes sense that more educated workers will earn more, and I don’t think many people would agree with government jobs (or any job, for that matter) not paying enough to lift a worker above poverty. And once you get to the higher end of the pay scale, as Nancy Folbre, an economics professor at the University of Massachusetts, Amherst, has pointed out, “federal employees are paid considerably less than comparable private workers.” In fact, according to research by Harvard economist George Borjas, at the top-end, private sector pay is so much better that the public sector has “found it increasingly more difficult to attract and retain high-skill workers.”

As Politico itself noted, states are facing huge budget shortfalls because of “the collapse in tax revenues that came with the 2008 Wall Street crash,” not because of public sector pay. Public employees may be a convenient bad guy for pinning budget woes onto, but the numbers show that the case against them doesn’t hold much water.


A recent report from the Center for State and Local Government Excellence and the National Institute on Retirement Security found that:

Over the last 20 years, the earnings for state and local employees have generally declined relative to comparable private sector employees.

On average, total compensation is 6.8 percent lower for state employees and 7.4 percent lower for local workers, compared with comparable private sector employees.

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