Monday, August 17, 2009

New Study Shows State Workers Earn Less, Pay More For Benefits Than Private Sector Employees

Respected name, too. Charles Ballard, economist at MSU, was commissioned for this study by the SEIU before Andy Dillon's plan to pool state employee benefits made the press. It doesn't "refute data in Dillon’s (House Fiscal Agency) report", but it does point out that state employees certainly gave at the office during this past decade, and that the tales of excessive pay and benefits are an "urban legend". This has actually been brought up before during the last budget go-around, but once the myth gets cemented in public opinion, it becomes almost impossible to change.

The statistic that was striking was the fact the Michigan has around the same population that we did at the beginning of the decade - and the state has cut nearly 20% of its workforce, "saving" $3.7 billion (and overworking the remaining employees), and most of that savings is in wages. It shows that we have reduced government, and the people who are pushing for more and more simply want the whole thing "drowned in the bathtub", for lack of a better description.

The DNews has a concise summary of the highlights of the study:

• State employees earn less than their private sector counterparts, on average, in each of eight different categories of comparable educational attainment. State employees with bachelor's degrees earn about 72 cents for every dollar a private sector worker with a bachelor's degree earns. State workers with master's degrees earn 62 cents to the dollar.

• State employees saw a 2.4 percent cut in wages in 2008-09, and health benefits co-pays also went up, with the monthly cost for family coverage more than doubling. The increase meant state employees paid higher-than-average costs.

• Michigan's state employee workforce shrank by 11,000, or 18.1 percent, between 2001-08. In 2001, 62,057 people worked for the state; by 2008, that number dwindled to 50,799. The state workforce was at its peak 1980, with around 70,000 employees.

• Altogether, the state employees' cuts have saved Michigan $3.7 billion, with savings of $3.3 billion in wages, $143 million in pension costs and $300 million in health costs.

The Freep has a the story as well, along with a link to the full report.

Speaker Dillon is supposed to introduce his reform legislation this week, and the experts will certainly put it through the shredder then. Tim Melton has been his attack dog on this issue, and he brought up an interesting point to MIRS last week - although it sounds like he went a little overboard in his zeal to defend the Speaker's plan, for it begs the counterpoint as well.

Rep. Tim MELTON (D-Auburn Hills) said the unions here are engaging in "predictable" behavior in denouncing the proposed state-operated health care system and the alleged damage it would inflict on public employees.

Melton said he wonders how they can react when there are no specifics and there is no bill.

"It's a knee jerk reaction (and) just to dismiss it without seeing the details" is not a good idea, he argued.

Well, it's a "knee-jerk reaction" to support it then as well. Wait for the legal language, and then we can go back to taking sides - because you know that is exactly what is going to happen.

By the way, were you guys planning on releasing your budget plan anytime soon? Inquiring minds want to know. Since everyone has admitted this will have no bearing on the current budget crisis, might want to think about what should be the priority at this time.