What is the state employee union wage premium?

How much does collective bargaining matter?  On Twitter, Will Wilkinson asks for data.  I find this web site specifying the average Virginia state employee to be earning $50,298.  Rortybomb says that for Wisconsin the comparable number is $48,267.

Yet Wisconsin had collective bargaining for state employees and Virginia does not.  Of course this comparison is a gross one and it is not holding constant the composition of each work force, seniority, cost of living differences, and it also does not seem to pick up possible differences in benefits.  Furthermore it does not consider the 48 other states.  Yet, crude as this one-to-one comparison may be, it is more empirically sophisticated than most (all?) other discussions I have seen.

This David Blanchflower and Alex Bryson paper (see pp.9-10), using 1980s data, finds a union wage premium, for state employees, of 14.5 percent, with the premium being strongest for unskilled workers, as is the case in the private sector as well.  (NB: I am not sure if they are adjusting for differential benefits but I think not.)  Alan Krueger tells us that the union/non-union wage gap is smaller in the public sector than in the private sector ("overwhelming evidence").

I'm not pushing any particular answer, I'd just like to put the question on the table.  What else do you all know?

Addendum: from Adam Ozimek: "The regression coefficients on page 8 of the report show that the union wage premium is between 15% to 16%, while the public sector wage discount is around 11%, meaning unionized public sector employees are paid 4% to 5% wage premium."  Adam also provides further references and discussion.

Comments

Using the comparison unions want us to make, it's apparently negative:
http://www.nytimes.com/2011/02/19/us/19union.html

"union leaders are quick to point to studies showing that overall compensation for government employees is slightly lower than for private-sector employees of comparable age and education."

It could, authentically, be negative, with that negativity being why the employees are willing to pay union dues/unionize/etc. Comparative statics allows for that much.

Whatever the wage difference, the meaningful difference comes in the form of job security, limited hours, and ease of work.

How is the comparison even useful? What's the fundamental law saying that wages in Wisconsin and Virginia need to be identical? I am lost.

The facts don't matter if you can just rail against labor unions and blame them for all your fiscal problems.

Don't you know the value of having a scapegoat?

Do you really think this discussion is about reason, facts and having rational discourse? If it were, you would have collective bargaining on these issues and, in the context of the bargaining, show that the union was taking an unsupportable position and then rail against them. This is about power, attacking your political opponents, and running for office, and keeping people's eyes focused on something else when you introduce a budget that cuts local government aid, school aid, and other local government support so you can balance your budget.

Krugman told us they make less. That's all I need to know.

"union leaders are quick to point to studies showing that overall compensation for government employees is slightly lower than for private-sector employees of comparable age and education."

The problem with that analysis, of course, is that K-12 teachers make up a large fraction of state employees and there is rampant credential inflation among teachers (because they receive automatic 'step' increases for masters degrees). Unfortunately, too, K-12 education programs attract the less capable students (SAT/ACT test scores for education students are near the bottom of the list):
http://www.tampabay.com/blogs/gradebook/content/s...

So comparing income by education levels is seriously misleading.

And then, of course, the areas where public employee compensation most exceed those in the private sector are not wages, but in job security, health benefits, defined pensions, and significantly earlier average retirement ages.

Comparing time in major is not just misleading, it's nonsense. There is a reason the change of major flow was one way and in the direction of education.

Andrew, The point of Tyler's post was that there wasn't a wage premium between union and non-union public workers.

My point is that the facts don't matter. This is ideology.

You proved it.

I just don't think the real issue is collective bargaining in Wisconsin. I more suspect the issues that have the unions agitated are all the other issues Walker is pushing through- like benefit cuts and general cuts in funding for local governments (this is most likely the reason that the collective bargaining is being eliminated- to give those governments more means to enact the actual wage/benefit cuts at that level). In addition, there were proposals to make the unions more accountable to their members and to make the unions collect their own dues, for example. One can certainly understand the union leadership being worried about how faithfully their members might write that dues check every month.

That's funny Bill.

I presented a fact, anecdotal yes. If you aren't joking I have no idea what you are talking about. Comparing years of education is stupid. That is in fact why there are different majors in college, because this is stupid. Promised benefits are not the same thing as benefits paid, particularly when they will not get paid. When facts are ideology in your mind, it's not my problem.

Bill, if you'd be so kind, please inform me whether I am arguing that there is or isn't a wage premium.

OTOH, having insurance is a benefit even if it is never redeemed. But it is very difficult to account for. You can look at the market for it, if one exists with significant numbers, but that is not really a direct comparison.

Btw Bill, why do you come take a dump in the flower shop and then complain that it's an outhouse?

A post about Wisconsin isn't legitimate until we get at least one "outhouse" mention.

It seems, at minimum, the union compensation/wage premium will be zero. Let's take, for example, lawyers. If a lawyer working for the government could be compensated (with wages, insurance, work environment, a gratuitous number of holidays) better in the private sector, then on average, that person would go work in the private sector. The lack of turnover (and the fact many people I know what to work in the government) seems to point to the existence of a compensation premium.

Wouldn't the demand for government workers in the Virginia area drive up the market price significantly above what we should expect to see for all other states? If we assume that both the federal government and state governments require workers with similar training and backgrounds - Masters in Public Administration, for example - wouldn't the state of Virginia be forced to match federal salaries in the nation's capital? Wisconsin and other midwestern states face no such competition for highly skilled government workers.

I liked Krugman's column I read this morning this morning, however. Like him or not, he basically told you what unions are really about, and why they should be supported- they funnel money to the Democratic Party and are one of the balancing powers vs those evil Republicans.

Re WI Teachers: State law says that classes must end the Friday before Memorial Day and cannot start until the day after Labor day, thanks to an alliance of Door County businessmen and teachers. So they're still getting 3+ months off of work.

My one Wi anecdote: I taught at a university in WI and in our town a new HS teacher from our school made more than a new assistant professor for most disciplines, including economics, at least through the 1990s. Profs weren't unionized. Madison's different, of course--but only for the competitive disciplines, not English or the foreign languages.

And Junior college teachers were unionized and were above both.

so they don't have the job security worries of private employees. There should be a wage premium for private employees.

You might think I'm joking, but I'm 100% serious:

A job where your idiot coworker can be (and is) fired immediately can be seen as a job perk. If you want me to work with un-fireable jerkholes, I expect to be paid accordingly.

I taught at a university in WI and in our town a new HS teacher from our school made more than a new assistant professor for most disciplines, including economics, at least through the 1990s.

That's more because being an assitant professor sucks.

Here is an NBER published book on the Public Sector Unionization. It has the material by Krueger that Tyler referenced. The entire book is free online:

http://books.google.com/books?id=-ekHL1ACBHUC&pri...

It has the materials on Krueger's wage comparisons.

I find all this to be a great example of why we should keep as many things out of government and politics as possible.

It is ironical that this post came right after the one about rigor and econometrics.

RE: mathematicians getting paid more in VA than WI:
I would like to explain exactly why, but there is No Such Agency. And the folks that work there Never Say Anything.

Seriously, the Feds employ a lot of mathematicians that of a very high caliber. These people rarely attend conferences outside the agency, as part of their general isolation from the rest of the community. Their in-house journal (I'm told) is very good, but no one else can read it. So, yeah, if you're one of the best, willing to spend your career in isolation & obscurity & get an anal exam by the CIA every six months, you might be able to score one of those jobs.

I hear generals get paid more in Virginia than in Wisconsin as well.

@MyName:

Have you seen the "Teach For America" study that showed that the one single factor most uncorrelated with success as a K12-teacher was a masters degree in Education? Comments?

For most purposes (Special and elementary ed. excluded), a degree in education is grossly over-hyped. Innate teaching aptitude and subject expertise are far more important. And most people who do posses these relevant skills are unlikely to subject themselves to semesters of "teaching" meta-education.

I think the primary difference is not wages but how far politics is allowed to permeate into civil service. Unions insulate it from gross corruption and manipulation.

Yancey Ward,

You are wrong that the issue in WI is about things other than collective bargaining. The unions and their Dem senator supporters in hiding have all made it clear that they are willing to accept the cuts (or most of them) that Walker is asking for, including the demand that they contribute to their pension funds. It is the collective bargaining issue that is the sticker, period.

Six Ounces,

Might not part of the problem with the low quality of people earning ed degrees be endogenous to the fact that teachers do not get paid all that well in general? Why are teachers in Finland, Korea, and so on so much better than in the US? I think that they are all unionized, certainly the ones in Finland are.

Bill,

Yet another paper (not peer-reviewed) that incorrectly 'corrects' for 'education' doesn't prove anything when the main question is are the people being compared actually equivalent. They WRONGLY take the aggregated factor that on average degrees correlate with pay and then ASSUME that a public sector employee tends to have the same degree as a private sector individual. This is wrong.

If this is the best there is then there is NO information on this question.

Might not part of the problem with the low quality of people earning ed degrees be endogenous to the fact that teachers do not get paid all that well in general?

Perhaps

Why are teachers in Finland, Korea, and so on so much better than in the US?

Wait, they are? First I've heard of it, and they're certainly not getting paid more (or close to as much) in Korea or Finland than they are here.

It's not (so much) the quality of people getting education degrees, it's the fact that they have education degrees!

Tenure doesn't mean teachers can't get fired, at least in K-12. It just means that they get due process,

Wtf. You'd need to pay me a significant premium if I had to put up with coworkers who needed "due process" to protect their jobs.

Most professionals don't get "due process" for their jobs. If teachers want to be paid like professionals, they should stop negotiating like they were commodity skilled labor.

Teachers aren't paid for the time period they have off

If a teacher makes $45,000 a year, that's $45,000 for the whole time. Whether you want to call the breaks "paid time off" or "unpaid time off" is irrelevant once you know their annual salary.

(Some conservatives try to bulk up teacher pay by saying "add 16% to find out what teachers really make" or something, which I think just adds to inaccuracy. )

Low skill public sector workers, generally, are significantly better off in compensation than their private sector peers. For example, employees of the United States Postal Service are far better off than their private sector comparables. This is mostly due to governments feeling the need to have a stable, long term employee base and to pay the living wage necessary to secure this employee base.

High end public sector workers generally are significant worse off in compensation than their private sector peers. Judges and senior lawyers in public service make far less than lawyers with comparably senior jobs in the private sector, senior managers of very large government enterprises (like Army generals and political appointees and SES employees in federal bureaucracies) make far less than private sector managers running comparable sized entities. Public sector physicians on salary almost always make less than comparable private sector physicians in their own practices. When governments absolutely need high paid employees they often outsource (e.g. the head of the private sector legal defense pool for county government in Colorado makes twice what any public sector employee in state and local government in the state receives).

The wage bias in the middle range is necessarily smaller. Compensation for processing claims in the VA or SSA isn't much difference from compensation for processing claims at a privaet insurance company.

Also, large swaths of public employees (e.g. K-12 teachers or police) don't have good private sector comparables.

Neither a teacher in a religiously affiliated school, nor a teacher in an elite secular college prepatory academy are good comparables for a typical public school teacher. The former take low pay for some of the same reasons that clergy take low pay compared to comparably skilled professionals. The latter differ greatly in ability to pay and the character of the job due to the kids that the teacher is working with. Both differ in licensure requirements.

Similarly, a mall security guard is not a suitable comparable for a policeman.

Andrew, You seem not to like papers that have facts in them that do not conform to your views or ideology.

When you say: "another paper (not peer-reviewed) that incorrectly 'corrects' for 'education' doesn't prove anything when the main question is are the people being compared actually equivalent." I can't help you here: what you are saying is that a public employee doing the same job, with the same education, as a private employee is, well, just different because Andrew says so.

Should have asked you. I guess we should also tell the guy at Rutgers whose study says that he has to clear his methodology first with you.

Again, his conclusion: No difference, slightly lower comp. By the way, this has been the conclusion of others as well but don't let those facts get in the way of your belief. My view, unsupported by data, is that because people going into public service know comp levels are limited, it attracts people who value security over bonuses, or even, stupidly, place a value on public service. But, you know, we live in a society, and it takes all types. Even you.

"Have you seen the "Teach For America" study that showed that the one single factor most uncorrelated with success as a K12-teacher was a masters degree in Education? Comments?"

The extent to which any input factors in K-12 education of any kind predict student outcomes is very low. Student socio-economic and demographic factors, and past student performance overwhelm any teacher impact factors. Even controlling for past academic success, "value added" measures of student educational growth show strong independent hereditary components.

Also, in education, a masters degree is largely a measure of seniority. The common pattern in education is to take graduate classes as continuing education, rather than as a pre-requisite to entry. So, after separating seniority effects from degrees you are really left with a distinction between people who have master's degrees early because they got undergraduate BAs in something other than education and people who got them later because they good undergraduate BAs in education and then earned an MA on the installment plan. It is hardly surprising that people who get education classes in one year are little different than those who get them spread out over four years.

@MyName

all of my points relate to the calculation of the wage premium, and how factors distort that calculation

1) the threshold of misbehavior or incompetence to fire a teacher is so high, there is almost zero accountability. I'm not claiming that "due process" is a bad thing. I'm arguing that private sector employees don't have the same level of protections, and therefore they should receive a wage premium or, alternatively, a free market wage for a public school teacher should be lower. The fact they have a union with collective bargaining is practically prima facie evidence that public sector wages exceed market equillibrium.

2. The relevance of teacher time off is for comparing their hourly wages to the median wage for all other income earners. The point isn't that they get unpaid time off. The point is that their annual wage covers fewer hours worked. Teachers often argue they do "work" outside of school hours and days, but so do a lot of other people. I certainly do unpaid "work".

3 and 4. My point here is the comparison between public teachers and private teachers and non-teachers is potentially misleading. There is no active market transaction for price discovery. Private teachers might be getting paid more than they otherwise would BECAUSE collective bargaining raises wages for public teachers. This is a positive pecuniary externality, but it leads to understatement of the union wage premium. Or they could be getting paid less than they otherwise would because union restrictions on supply increase labor supply in the non-union market, depressing wages. So the union wage premium could be overstated. The market impact is ambiguous.

Another point is that their wages are not set by markets. In every community I looked at in the pay database I linked to, individual teachers earn more than the annual median FAMILY income for those cities.

5. I taught Economics at a university, and I used to get phone calls from the Education department when one of their majors was getting a C. My ex was an Ed major, and she had a perfect 4.0 in Ed courses but got Bs, Cs, and Ds in other courses. I'm quite familiar with Education grade inflation and it has little to do with self selection. If you're going to make a self-selection argument, then every college graduate has that impact. Anyone who's been to college knows what the "easy" majors are. Don't try to pass rhetoric as reality.

As for suitability to be a teacher, the credentialling process is overrated and unnecessary in my opinion. I have successfully taught college and university freshmen. Why can't I teach high school seniors? There is absolutely nothing special about the skill set or specialized knowledge of teachers. I think most History, Math, English, and Spanish, majors can teach those subjects as well or better than someone with an Education degree.

They should be called "presenters", not "teachers." I could teach any class in their curriculum at any grade level. They can't teach what I teach. I'd trust my wife (BA in English) home schooling my children over a random public school teacher any day.

Why did Obama, Clinton, and Gore send their kids to private schools?

Lou,

Yes, we should just say something like "$45,000 a year, with two months vacation."

ohwilleke,

The article was about teacher effectiveness. TFA studies what works and doesn't work, extensively. Here's the money quote:

Knowledge matters, but not in every case. In studies of high-school math teachers, majoring in the subject seems to predict better results in the classroom. And more generally, people who attended a selective college are more likely to excel as teachers (although graduating from an Ivy League school does not unto itself predict significant gains in a Teach for America classroom). Meanwhile, a master’s degree in education seems to have no impact on classroom effectiveness.

The most valuable educational credentials may be the ones that circle back to squishier traits like perseverance. Last summer, an internal Teach for America analysis found that an applicant’s college GPA alone is not as good a predictor as the GPA in the final two years of college. If an applicant starts out with mediocre grades and improves, in other words, that curve appears to be more revealing than getting straight A’s all along.

The unions and their Dem senator supporters in hiding have all made it clear that they are willing to accept the cuts (or most of them) that Walker is asking for, including the demand that they contribute to their pension funds. It is the collective bargaining issue that is the sticker, period.

Why should this claim be accepted as sincere? Benefits were not negotiable before the new governor brought out the nuclear option.

Dan, time has monetary value and it's very easy to quantify. How is it less complicated to say $45,000 and two months of time versus $54,000? (Plus the value of other benefits)

Six Ounces and ohwilleke:

Great comments. Very meaty. Love them. The best of MR is usually in its comments.

Andrew, The paper compares Educational attainment AND Occupation and the other factors as the controls.

In the data appendix, you will see that occupation of the employee is used: "This study uses these ECEC sample estimates to calculate relative benefit costs for each private and public employee in the sample. The calculation was done by calculating the relative benefit mark-up for each

private-sector employee based on the size of organization that employs the individual and the employee’s occupation. State and local government employees’ wages were similarly marked up using an occupational benefit weight calculated using the ECEC data." (Note reference, again, to occupation).

There is a table listing the BLS listing of occupations below it. The comparisons between public and private in these occupationa categories--such as secretarial, transportation and earth moving, professional, office and administrative support, etc.

In addition, as you may know, states and the federal government do surveys of wage rates, and also specify the requirements for a job.

This is in the Data Appendix, so maybe that is why you didn't see it. I am also not a labor economist as the author is, so I do not know the level of detail they go into for making these comparisons.

Even teaching is not really the same job at a private versus public school on average. That's probably as close as you will get. But, they don't have to be exactly the same as long as the errors are on both sides of the average, but that's simply not true either.

If a state employee lists 'engineer' as their occupation I would suspect a private sector 'engineer' will make on average $20k more because they are not the same job. It's not because I said so or because of your bushwa about ideology, it's because they are obviously not the same jobs. Table A1 doesn't even have that granularity. It's got 9 general buckets.

Cyrus,

Benefits have been on the table for a long time for a lot of these unions. My mom's a county employee in WI and a member of the teacher's union (she's not a teacher, but their office is small). She pays more for her health insurance than I do working for a large private company and she pays more towards her pension than Walker is mandating. That's true for every county employee. The county's been broke for five or six years and they're expecting layoffs under Walker's budget (if he ever releases it). These budget "fixes" are a smokescreen.

One thing that's being lost in the debate is that a fair number of the people affected by this proposal aren't state employees or K-12 teachers. They're county,township, and university employees - public health nurses, snowplow drivers, and city administrators, to name a few. Most of them have direct comparables, and those whose jobs require college degrees generally make less. Mom would make 25% more with the same benefits if she'd started her job in the private sector at the same time.

I haven't seen it picked up in the media yet, but there are recall campaigns started for every republican currently eligible. Probably every democrat too.

Bill,
The EPI paper only used occupation to calculate mark-ups for benefits. It is not listed as a control variable in the regressions, and that's only the beginning of the paper's failure to compare "apples to apples".

Why not just pass a right to work law?

ohwilleke,

Are you sure it is not the USPS union that is causing dramatically inflated pay?? In combination with the government not really caring how much money they make or spend on employee salaries?

Yes, the USPS has mandated services it must provide that contributes to its billions in losses, but that seems irrelevant to the question of pay for public union members vs. private employees. Also not sure how much cheaper USPS is for comparable services (USPS does not include insurance, for example, that is extra).

Cliff,

It isn't as smokescreen to point out that public sector workers make less than private sector workers.

In fact, the most recent Wisconsin study by two labor economists points out: (here is the link so you can read it yourself: http://keystoneresearch.org/sites/keystoneresearc...

The analysis finds that:

􀁳􀀀Public and private workforces differ in important

ways. For instance, jobs in the public sector require

much more education on average than those in

the private sector. Employees in state and local

sectors are twice as likely as their private sector

counterparts to have a college or advanced degree.

􀁳􀀀Wages and salaries of state and local employees are

lower than those for private sector workers with

comparable earnings determinants (e.g., education).

State employees typically earn 11 percent less; local

workers earn 12 percent less.

􀁳􀀀Over the last 20 years, the earnings for state and

local employees have generally declined relative to

comparable private sector employees.

􀁳􀀀The pattern of declining relative compensation

remains true in most of the large states we

examined, although some state-level variation

exists.

􀁳􀀀Benefits (e.g., pensions) comprise a greater share of

employee compensation in the public sector.

􀁳􀀀State and local employees have lower total

compensation than their private sector counterparts.

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.

The smokescreen is public officials claiming that public sector wages are higher than private sector wages. I have the studies which show public sector wages below private sector wages, like it or not. Those studies include public sector union states.

It is YOU who claims that public sector unions have raised public sector wages above private sector wages. YOU PROVE IT. Tyler quotes someone saying that he estimates 4-5% but evidently you didn't read the post.

Cliff,

Bill won't answer that most obvious of questions, but Krugman did this morning answer it quite explicitly. They don't serve the workers, they serve the Democrats.

Bill,

I would simply argue that public sector unions ensure higher compensation than those workers would get without them (in other words, I do think such unions benefit the union members, and this certainly fits their revealed preferences). People have pointed this out to you more than once on these threads, but you seem to be utterly clueless in addressing this exact point, as, so far, every single study you have linked to. Now, you can go find some other study that shows that public sector workers make less than their so-called equivalent private sector compatriots for the umpteenth time to demonstrate that you still don't get it, and you can be asked again where is the comparison between people doing the exact same job.

What is a union without a right to strike.

One that's making doctors commit a lot of fraud

Just checked for physicians, and, big surprise, US is #1 for general practitioners in terms of their salaries/GDP

by country, and #4 for specialists. I could not find comparable figures for attorneys or financial specialists,

but suspect those latter two are also near or at top levels globally in terms of relative to GDP, in sharp

contrast to what we pay teachers in the US.

So, Andrew, of course ed degrees are not worth much. You get what you pay for, right?

Bill,

Your 'facts' are not all facts. That EPI white paper appears to only look at the 9 bucket industry for the fudge factor on benefits, not for wages.

I feel like you are using these 'papers' (which are actually not what some people think of papers, they are press releases and think tank white papers) as an appeal to authority, and then insulting anything other than what you do as 'ideology.'

"I'll let you in on a secret: It concludes:

State and Local Workers Receive Less Total
Compensation than Their Private Sector
Counterparts

Don't read it if you want to preserve your contrary beliefs."

Bill, I know what your papers say. I don't believe your papers. They are ideological and that's the good part. You keep talking like something can't be ideological if it shows up on letterhead.

People in public versus private sector do different jobs. There is no way to 'control' for things that are fundamentally different. What you are actually measuring is the difference in the jobs, NOT the difference between public and private. To claim that there are private and public counterparts close enough that you can claim with such confidence that there can't possibly be a 10% difference as to say that anyone else is being ideological is ridiculous.

A PhD and a couple post-doc appointments are often required for some state university professorships. The professor does not get paid more than a manufacturing manager with a B.S. a couple years out of school, and that is perfectly natural. The professor might make half the wages of the manager. They do not do the same job even though they may both be called 'engineer.' Now we can assume that this is balanced by other jobs, but why would we assume that? Your papers all assume that. They assume that everything else is equal except the 'public vs private' factor. In actuality, the main driver is the actual role that the education and the employee are applied to. The 'Public vs Private' factor relates far more to the 'perks' of the job.

Another way of looking at it, if you simply refuse to accept that the people may be counterparts, but he jobs aren't counterparts, is that the government does a really crappy job relative to the private sector of getting the most out of the education investment.

The story posted by Rich Berger
http://www.usatoday.com/news/nation/2010-03-04-fe...

Goes into much more granular detail on the actual jobs for Federal versus private pay and the premium is considerable, especially including cash-value of benefits.

Here again, I don't assume Fed and private jobs are identical because I can well imagine that Federal jobs really do require greater levels of training and certification.

ohwileke: "employees of the United States Postal Service are far better off than their private sector comparables. This is mostly due to governments feeling the need to have a stable, long term employee base and to pay the living wage necessary to secure this employee base."

ohwileke: "Fed Ex pay is clearly much less than USPS pay for comparable jobs."

That's my point, sir. FedEx pays less than the USPS yet has incredibly low turnover.

ohwileke: "Is it actually necessary to pay more to get better a stable workforce earning a living wage?"

Obviously not, as FedEx has demonstrated for decades. But for some reason, you seem to believe that is the reason USPS pays its employees more. How would you know that, sir?

ohwileke: " it seems clear that large publicly held companies like Fed Ex and UPS do not need to pay what they do to secure competent senior managers."

Sorry to say this, sir, but I do not believe you know very much about FedEx. As I said earlier, I was a planner for FedEx for 14 years, and I know the history of that company.

The only problem FedEx has ever had with turnover was in the executive ranks. CEO Fred Smith lost a number of very talented senior vice presidents during that period for exactly the reason that he wasn't paying them enough. If FedEx is compensating its executives more than they did in the past, it is exactly because they need to do so in order to secure the senior managers they desire. If you disagree, send a letter to the FedEx Board. (They will ignore you.)

CEO Fred Smith founded FedEx. His net worth in FedEx stock alone is in the billions. His current compensation package is irrelevant to his decision-making. FedEx is the wrong example for you to use in trying to make any point about executive compensation.

The problem with benefits is that we started out with actual insurance benefits and then transitioned to pay-as-you-go, defined benefit wealth transfers while trying to contort the definition of insurance to gloss over the transition.

Even if the wage premium is non-existent, the benefits packages public employees receive tend to receive are enormous and unheard of in the private sector.

That is bizarre hyperbole.

Careless,

Funny you call yourself given that you seem to be pretty careless with facts. Would you like to provide some evidence for your claims about our supposed overpayment of teachers?

Go look at http://economix.blogspot.com/nytimes.com/2009/09/... . Out of 33 OECD countries in 2007, the US was #26 in teacher pay per GDP. We get what we pay for. (OTOH, we have the highest such ratio for pay per GDP for general practitioners).

Andrew,

Well, I am not sure how hard to laugh at your claim to reject facts coming from sources you perceive as ideologically biased. Do you reject such facts when the bias is in your direction, or only when it is the other way? The ultimate source of the above is the OECD. Is the data suspect then because it comes from the "rich man's club" of countries' organization, or does it being reported in the NY Times make it suspect? Would you believe it more if it came from Fox News, the way huge numbers of their viewers believe such things as that Obama is a Muslim and not born in the US?

You really are quite hilarious.

Andrew, You did not look at the paper by the two Wisconsin labor economists. The EPI paper you are talking about is one written by a Rutgers economist who has written on this subject before.

The Wis econonmists are experts in their field; there piece actually is written from the perspective of the purchasers who were trying to find what is a comparable price. But, apparently, you didn't read the study.

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