| Kersten Institute for Governance and Public Policy

California Is Golden State For Public Employees

California’s public workers are paid twice what their private-sector counterparts earn in pay and benefits, according to a new report.

Pay and benefits for public workers in the state averaged nearly $122,000 each, compared to nearly $62,500 for those in the private sector, according to a new report from the California Policy Center.

“California’s state and local governments face serious financial challenges, including $1.3 trillion in debt and underfunded pensions, plus neglected infrastructure,” said Ed Ring, the study’s author, in a prepared statement. “State and local elected officials ought to be coming up with policies designed to lower the cost of living for everyone, instead of paying their government workforce twice what ordinary citizens can earn.”

The numbers are based on data from the California State Controller’s Office, the U.S. Census Bureau and the California Employment Development Department.

The study, however, did not include teachers and professors. And it also factored out those making less than $30,000 annually in regular pay, in order to assure it included only full-time workers.

Not everyone is convinced by the findings. Without disputing the figures, Monique Morrissey, an economist with the Economic Policy Institute in Washington, D.C., said the findings are misleading because they do not compare specific classes of employees or to account for differences in education levels and total hours worked.

“It’s like it’s written by a nerdy 11th-grader who got excited by finding this database,” Morrissey told AMI Newswire. “It’s not a serious analysis.”

There have been a lot of attacks on public-sector unions because their members have been a stalwart voting block for the Democratic Party, but that doesn’t mean they’re overpaid, said Morrissey, who specializes in labor markets and financial markets.

Virtually all well-crafted economic studies analyzing public- and private-sector workforce issues have concluded that public-sector workers earn less in regular pay but receive more security in terms of better retirement benefits, she said. The result is a more stable public-sector workforce, according to Morrissey.

“Public-sector workers are a bargain for taxpayers,” she said, and higher-educated employees working for state or local governments – including doctors, teachers, nurses and attorneys – tend to opt for pay that’s lower than the private sector because they have a sense of public service.

“The reason right-wingers want to drop teachers (from economic studies) is they are well-educated but underpaid,” Morrissey said.

But she did acknowledge that financial wrongs can emerge in public-employee payment systems.  Police officers and firefighters, who tend to retire younger due to the nature of the work, tend to have high overtime in their latter years because those years are what pension payouts are based on, she said.

“You can have isolated cases of abuse,” Morrissey said, pointing to incidents of pension spiking. “It’s typically insider buddy-buddy systems.”

Efforts by conservatives to cut pay for public employees could backfire by causing the better-educated public-sector employees to bail and join the private sector, she said.

But the California Policy Center study tries to make the case that California’s situation is exceptional. California’s city and county workers’ pay in 2015 topped city and county worker pay in the rest of the United States by 39 percent, researchers found.

“Their conclusion sounds reasonable to me,” David Kersten, president of the Kersten Institute for Governance and Public Policy in Oakland, told AMI. “It obviously varies by locality.”

On average, public employees are paid at least 20 percent more than the going rate in the private sector, said Kersten, who is also a public policy professor at the University of San Francisco.

“We hear blowhard California Democrat politicians talk about the uniqueness of California’s ‘progressive’ policies,” he said in a recent blog post. “But these progressive policies are not serving the poor and underprivileged. They are serving the state’s public servants and their public employee unions who control California government.”

A full one-third of Californians are living in poverty, one of the highest rates nationwide, Kersten said, so the average California resident is being overburdened by financing public-sector pay and benefits that exceed their own.

A better way to help Californians might be for the public sector to hire more people by paying only market rates for many of their positions, he said.

But don’t expect the opposition party in California, the GOP, to attempt to take up the issue and try to make political hay out of it, Kersten said.

“They are very careful on what they say because they are close to law enforcement,” he said. Public safety often makes up two-thirds of city budgets, so local Republicans tend not to be proactive on the public-employee pay issue, Kersten said.

Neither does he see comprehensive legislation or a ballot measure emerging to tackle the issue.

Only a populist leader on the order of President Trump could take on the issue of the cost of governance in California, according to Kersten.

“I think you can make some real changes quickly if you had the political will and a strong leader,” he said.