The Relationship Between Teacher Salaries And Teacher Salary Schedules

Posted by on May 9, 2013

The National Council on Teacher Quality (NCTQ) has released a brief report on teacher salary schedules since the recession.

NCTQ looks at 41 of the 50 largest districts in the U.S. (i.e., all but nine responded to the survey). Between 2008-09 and 2011-12, four out of five of these districts froze pay at least once. As would be expected, districts did so in different ways – sometimes by freezing step increases (or awarding them without associated raises), sometimes via lower (or no) cost of living adjustments, etc. It’s compelling evidence that public school teachers, like most U.S. workers, have felt the pain from the recession. This is useful information (also check out NCTQ’s TR3 database, a terrific resource).

There are, however, a couple of points worth mentioning about salary schedules, which may seem picky (or even obvious), but they do bear on the data presented in this report. Read More »


Moving From Ideology To Evidence In The Debate About Public Sector Unions

Posted by on January 18, 2013

Drawing on a half century of empirical evidence, as well as new data and analysis, a team of scholars has  challenged the substance of many of the attacks on public employees and their unions –urging political leaders and the research community to take this “transformational” moment in the divisive and ideologically driven debate over the role of government and the value of public services to deepen their commitment to evidence-based policy ideas.

These arguments were outlined in “The Great New Debate about Unionism and Collective Bargaining in U.S. State and Local  Governments,” published by Cornell University’s ILR Review.  The authors – David Lewin (UCLA), Jeffrey Keefe (Rutgers), and Thomas Kochan (MIT) – point out that, with half a century of experience, there is now a wealth of data by which to evaluate public sector unionism and its effects.

In that context, the authors spell out the history, arguments and empirical findings on three key issues: 1) Are public employees overpaid?; 2) Do labor-management dispute resolution procedures, which are part of many state and local government collective bargaining laws, enhance or hinder effective governance?; 3) Have unions and managers in the public sector demonstrated the ability to respond constructively to fiscal crises? Read More »


An International Perspective On Corporate Pay

Posted by on October 14, 2011

Our guest author today is Michael Tims, associate professor of biology at Montgomery College in Takoma Park, Maryland. Some of his writing can be found on his science blog, Bardo’s Calculus, as well as at the Hyattstown Mill Arts Project, where he is a board member.

The growing wealth gap in the United States has worried some commentators for years. The length and breadth of the economic crisis, and the suffering it has brought with it, have moved those concerns into the mainstream. One aspect of this development that warrants more attention is the connection between declining rates of unionization, and the incredible gap between the pay of workers and their bosses.

As corporate resistance to unions has increased and union density declined, the discrepancy in pay between management and worker has grown extreme. Since the mid 1970s, the average multiple of CEO pay to worker pay has increased from 28x in 1970 to 158x in 2005, to almost 400x in 2010. . Their average “total realized annual CEO compensation” is currently $12 million, according to Governance Metrics International. During this same period, worker pay has stagnated and fallen behind inflation, despite an historic rise in workforce productivity

This phenomenon of high pay disparity in the industrial world is uniquely American, with the next highest countries being Britain (25x), Sweden (13x), Germany (11x) and Japan (10x). Claims that these pay levels represent success on the part of the CEO appear to be misleading. Read More »


Public Servants Versus Private Contractors … Again

Posted by on September 22, 2011

Has the battle over public sector compensation turned a decisive corner? Have much-maligned government workers won an evidence-based victory?

Reasonable people might think so, thanks in part to a study by the Project on Government Oversight (POGO), a nonpartisan group that keeps close tabs on government operations. According to the findings of the POGO report – findings that they call “shocking” – the “federal government approves service contract billing rates … that pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services.”

More specifically, federal government employees cost less than private contractors in 33 of the 35 occupational classifications reviewed – and non-federal private sector worker compensation was lower than contractor billing rates in all of the reviewed classifications. In one case, contractor bill rates were nearly “5 times more” than the full compensation rates paid to comparable federal workers. Read More »


The High Cost Of Caring

Posted by on May 25, 2011

The field of early childhood education (ECE) is riddled with contradictions. Bluntly, when those we love the most—our children—are at the most consequential stage of their cognitive, social, and emotional development, we leave them in the hands of the people we pay the least. According to the latest data from the U.S. Bureau of Labor Statistics, for example, childcare workers earn about 4 percent less than animal caretakers—$20,940 and $21,830 per year, respectively.

I am far from the first to make this embarrassing comparison; more than a decade ago, Marci Whitebook provided an extensive overview. Unfortunately, the comparisons still hold.

Over the intervening years, there have been many determined efforts to regulate and improve the working conditions of early childhood educators, including raising the qualifications and wages for the profession. Indeed, the demand for worthy salaries is often discussed in combination with workforce development efforts. In other words, we want early childhood workers to be both better trained and better paid. While this may seem to be a perfectly reasonable approach, it suggests that the low wages are a result of inadequate qualifications. Perhaps. But I believe that this obscures another important explanation for these workers’ persistently meager pay. Read More »


Unions And Pensions: Unfunded Culpability

Posted by on May 4, 2011

The Pew Center on the States just released an updated report on unfunded liabilities of state pension (and retiree health) systems. The figures are sobering. In FY 2009, state pension plans were funded at an average of 79 percent, meaning that they were short about one dollar for every five that projections suggest they’ll need to meet their obligations.

While there’s no doubt about the troublesome implications of these findings, there’s a lot of disagreement as to causes. Lately, governors and state legislators (of both parties, but mostly Republicans), as well as dozens of commentators, have tried to lay the blame on the public sector workers, to whom the pensions are owed – seeking to restrict these workers’ collective bargaining rights, with the claim that this will help control the cost of benefits.

The unfairness of blaming public sector workers – and their unions – should be pretty clear. By all accounts (also here), the primary reason that pension plans are in trouble is that the 2008 collapse of financial markets decimated the value of pension fund investments (the early 2000’s recession also seems to have played a role). Add to that an aging population (there is an increasing percentage of retirees as a share of the population, and they are living longer), as well as the failure of many states to make their required contributions during good times, and you have a fairly comprehensive explanation for the pension “crisis.”

Nevertheless, some have argued that public employee collective bargaining has exacerbated states’ pension problems – after all, more than their non-union counterparts, union members have tended to trade current salaries in favor of increases in deferred benefits. In that case, we might expect that states with higher densities in public sector union membership will have larger unfunded pension obligations. These differences need not be huge, but it’s reasonable to anticipate that they would be discernible. Let’s take a look. Read More »


Are Teachers Driving The Public/Private Sector Earnings Gap?

Posted by on April 4, 2011

A great deal of the debate surrounding public sector unions focus on how much public employees earn versus private workers. Every credible analysis – those that account for huge differences between public and private workers in terms of characteristics like profession, education, and experience – find that public compensation is competitive or lower than that of private-sector workers (for recent examples, see here, here, and here, or a review here).

I have, however, heard a few thoughtful observers make the point that virtually all these analyses include education workers, and that this might be a little misleading. It’s a fair point. Roughly one in five state/local government employees are in fact K-12 teachers, while another five percent are professors at public colleges and universities. This is important because analyses of public/private sector compensation essentially compare public employees with workers with similar characteristics (education being the most important one) in the private sector. The research above indicates that workers with more education pay a larger “price” for working in the public sector, whereas many lesser credentialed, lower-skilled government jobs actually pay more. Since many teachers have master’s degrees (and professors Ph.D.’s), and they are such a huge group, it’s reasonable to wonder if they might be skewing the overall estimates.

So, I decided to see if a comparison of public/private compensation that does not include teachers and professors would yield very different results. Let’s take a look. Read More »


How To Make A Misleading Public/Private Earnings Gap Disappear

Posted by on March 5, 2011

USA Today last week published yet another story claiming that public sector workers make more that their private sector counterparts – this one saying that Wisconsin is one of many states where this is the case. Their “analysis” used data from the Bureau of Economic Analysis, and compared total compensation (salary+benefits) between workers in the private sector and state/local government.

No matter how many times they are told that you can’t just make a straight comparison of dissimilar groups of workers, apparently they still don’t get it. Incredibly, this particular article admits as much, and even quotes economist Jeffrey Keefe, who tells them that the gross comparisons don’t account for important sectoral differences in education and other factors. In other words, their numbers don’t tell us much of anything about public versus private sector compensation. Still, there is the headline: “Wisconsin one of 41 states where public workers earn more.” How many people saw that headline, and now believe that public workers are “overpaid?”

USA Today, of course, is not alone. These assertions have lately become insidious, coming from governors, commentators, and others. But when a major national newspaper decides to run this story at this politically-charged time, based on their very own “analysis,” a separate response seems in order.

I’ve discussed this issue before, but maybe it would be more helpful to show how the data are more properly analyzed in a step-by-step fashion, using 2009 U.S. Census microdata (the American Community Survey, available from the wonderful organization IPUMS.org). Here’s how you make a false earnings gap disappear in five minutes. Read More »


Ready, Disclaim, Fire

Posted by on January 31, 2011

Earlier today, newly-elected Michigan Governor Rick Snyder released his “Citizens’ Guide to Michigan’s Economic Health.” The general purpose was to provide an easy-to-understand presentation of the state’s finances, and to encourage local governments to do the same. These are of course laudable goals, but one of the report’s major findings, also mentioned in the governor’s press release, was a familiar one:

Average annual compensation of state employees (including salary, wages, and benefits) was over twice the average annual compensation of private sector workers in 2009.

As might be expected, many reporters and editors dutifully ran this outrage-inspiring finding as a headline (also here and here), even before the report was officially released: State workers make twice as much as private sector workers. Governor Snyder rolled out the report as part of his presentation to the Business Leaders for Michigan Summit, in which he spoke about the state’s fiscal situation.

I’ve already discussed how these gross comparisons of public and private sector workers – whether nationally or in a single state – are invalid. That is, they compare two completely different groups of workers: Public employees, who are mostly professionals, and private sector workers, many of whom work in lower-wage, lower-skill jobs. But this time, you don’t need to take my word for it. After featuring the “twice as much” finding in a header and pull-out quote, the governor’s report says it directly:

However, this analysis does not compare private and public sector employees with similar jobs, years of experience, or education.

Let me translate that for you. It means: This comparison is meaningless. Read More »


Public Apples, Private Oranges: A More Ripened Look

Posted by on September 10, 2010

In a previous post, I criticized articles in the USA Today and elsewhere (all citing data from the conservative Cato Institute), which claimed that federal government workers earn almost twice as much as private sector employees (including salary and benefits). I argued that en masse comparisons of public and private sector workers don’t tell us much, since the jobs that comprise the two sectors are very different.

For a more useful comparison, we need to understand not only that most public sector workers are professionals, but also that they tend to be more experienced, and more quickly promoted, than the typical private sector employee. For example, a lead research scientist will earn more than his or her staff scientists, whether they are working in the public or the private sector. So, if public sector employees in a given occupation tend to be more experienced or have more authority or responsibilities, they will appear “overpaid” even though they are not.

So, how does the public/private wage gap look when we compare professionals in the two sectors by both occupation and experience/responsibilities? Read More »


Public Apples, Private Oranges

Posted by on August 12, 2010

Hardly a week goes by during which an editorial or column in a major newspaper doesn’t comment on how public sector workers are making a killing compared with their private sector counterparts. Recently, as a result of the “edujobs bill,” there has been even more of this chatter than usual about “overpaid” government workers with “bloated benefits” and “fireproof” positions. Some of these commentaries even purport to present “evidence.”

Earlier this week, for instance, a piece in the Washington Examiner cited data showing that average compensation (salary plus benefits) for federal government workers was roughly twice that of private sector workers. Sound remarkable? Not so much.

This “argument” is akin to comparing the compensation of employees at IBM versus WalMart. You are talking about two very different groups of jobs. Read More »


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