Are Public Employees Overqualified?

Something or other seems to have set off a new round of blogging on the question of whether or not public employees are overpaid. It’s maybe useful to think about this issue with reference to the specific case of police officers, since it’s generally acknowledged by people on both sides that municipalities and counties need to have police officers. So are cops overpaid? Certainly they’re paid more than they would be paid were it not for the existence of politically active organizations dedicated to advancing the interests of police officers. But what if we paid them less?

Well in the first instance, we’d reduce our public outlays. But in the second instance, we’d presumably reduce the attractiveness of becoming a police officer relative to doing something else. Would that be a good idea?

It seems to me that any sane person is going to have to concede that there’s not a great deal that can be said about this subject in general. You need to look at specific situations. The extremely lucrative nature of the gigs policing the Massachusetts Turnpike seems to be clearly unnecessary and plausibly harmful to public safety. Indeed, I think the right thing to say about police officer compensation in the United States is that it’s badly misallocated with many prosperous jurisdictions spending more on this than would be optimal while many other jurisdictions are locked in a cycle of high poverty, ineffective police departments, and high crime.

This is all just to say that I’m semi-glad conservatives have decided to make this issue a major focus of theirs. Certainly, compensation practices need scrutiny and so I’d rather see the right obsess about this topic than about the need to start new wars or something. But you have to actually scrutinize the situation in some detail. Whether or not Michigan is overpaying janitors at state office buildings has no logical relationship to the appropriate compensation level of federal bank regulators.