Our guest bloggers are Lawrence Korb, Senior Fellow, and Jacob Stokes, a national security intern, at the Center for American Progress Action Fund.
Last Sunday on Meet the Press, former Massachusetts governor Mitt Romney blamed American economic woes on what he sees as excessive salaries and benefits for public sector workers:
[T]he real threat right here… is that if we don’t take action to rein in the scale of government and the growth of government spending and the compensation levels of government workers — you saw government workers, average government workers, are now making $30,000 a year more than the average private sector worker. These kinds of excesses and the massive deficits that, that, that government is putting in place, over a trillion dollars a year for these coming several years, this threatens our long-term viability, because it, it, it suggests that we could have runaway inflation.
The $30,000 number is a convenient statistic for someone like Romney, who has an ideological drive to slash the public sector for the sake of slashing it. And he’s hitting on an issue that has become something of a hobby horse for the wider conservative-libertarian movement. USA Today even ran an article on the subject on Dec. 11, with only a one-sentence defense for the other side buried deep in the piece.
But the problem with this statistic — as this post from Amherst economics professor Nancy Folbre points out — is that in many important ways, it compares apples to oranges. And in doing so, it ends up being completely misleading.
Although technically true — the average public sector worker made $71,206 in 2008, compared with $40,331 in the private sector — those numbers mask important factors about the public workforce that must be taking into account when making comparisons to the whole of the private workforce.
Most importantly, a much higher proportion of private workers — 43 percent — work in jobs that earn less than $25,000 a year. Most public sector employees fall into the $25,000-$75,000 range. Why the pay disparity? Overall, federal employees have more education than private employees. Forty-five percent of public sector workers hold a college degree or higher; only 29 percent of private sector workers can say the same. It’s hardly surprising that a population with significantly more education would make more money. That’s the same way in the private sector.
Figuring out how public sector pays stacks up against private sector pay for comparable jobs would offer a much more insightful look into whether the public sector is bloated with overpaid bureaucrats. Lucky for us, Harvard economist George Borjas has done just that (hat tip, Folbre). He found that at the high end of the spectrum — where so many of those free-riding government lifers reside — public sector workers are paid comparably less than their private sector brethren. And this makes sense: why do so many senior officials leave to take lucrative positions at private firms if not for the money?
The level of intellectual rigor practiced by Romney is, unfortunately, par for the course for many people on these shows. But the public should demand more from a probable 2012 GOP presidential candidate.