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Thread: Public sctor wages vs. private sector wages

  1. #1
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    Public sctor wages vs. private sector wages

    I was watching a documentary about Pancho Barnes recently and something caught my attetntion. Chuck Yeager was saying that the private pilots who flew to Pancho's place out by Edwards were paid so much better than the test pilots that Pancho charged them triple and didn't charge the test pilots at all.

    It got me to wondering, is it that public sector jobs pay so much more these days or is it that private sector jobs pay less?

    I decided to look it up and found this:

    Office of Personnel Management spokeswoman Sedelta Verble, says higher pay also reflects the longevity and older age of federal workers.

    USA TODAY used Bureau of Labor Statistics data to compare salaries in every federal job that had a private-sector equivalent. For example, the federal government's 57,000 registered nurses working for the Veterans Administration and elsewhere were paid an average of $74,460 a year, $10,680 more than the average for private-sector nurses.
    The BLS reports that 216 occupations covering 1.1 million federal workers exist in both the federal government and the private sector. An additional 124 federal occupations covering 750,000 employees air-traffic controllers, tax collectors and others did not have direct equivalents, according to the BLS.

    Federal jobs have more limited salary ranges than private-sector jobs, some of which have million-dollar payouts.

    Key findings:

    Federal. The federal pay premium cut across all job categories white-collar, blue-collar, management, professional, technical and low-skill. In all, 180 jobs paid better average salaries in the federal government; 36 paid better in the private sector.

    Private. The private sector paid more on average in a select group of high-skill occupations, including lawyers, veterinarians and airline pilots. The government's 5,200 computer research scientists made an average of $95,190, about $10,000 less than the average in the corporate world.

    State and local. State government employees had an average salary of $47,231 in 2008, about 5% less than comparable jobs in the private sector. City and county workers earned an average of $43,589, about 2% more than private workers in similar jobs. State and local workers have higher total compensation than private workers when the value of benefits is included.

    Job comparison
    Average federal salaries exceed average private-sector pay in 83% of comparable occupations.
    There's a chart comparing different occupations at this link.

    From 2009:

    Average weekly wages have fallen 1.4% this year for private-sector workers through September, after adjusting for inflation, to $616.11, a USA TODAY analysis of Bureau of Labor Statistics data found. If that trend holds, it will mark the biggest annual decline in real wages since 1991.

    The bureau's data cover 82% of private-sector workers but exclude managers and some higher-paid professionals.

    "Wages are usually the last thing to deteriorate in a recession," says economist Heidi Shierholz of the liberal Economic Policy Institute. "But it's happening now, and wages are probably going to be held down for a long time."
    I'm still left wondering if the disparity is because private sector wages simply aren't growing fast enough. And if public sector wages do drop, will the private sector lower wages also?


  2. #2
    Chubby Member
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    Public employees typically enjoy decent benefits packages. Do we know if that data was incorporated into the compensation comparisons?

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    Master political analyst Dittohead not!'s Avatar
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    According to yahoo Answers, nursing wages vary considerably:

    Best Answer - Chosen by Voters
    My wife is an RN - BSN, and nurses can vary, but at the very lease 20 bucks an hour plus benefits. Traveling nurses can make up to 40-45 dollars an hour, but you move every 13 weeks. Nurses who specialize can make pretty good money, 30-50 per hour. Nurses with masters degrees six figures. Nurse practitioners start around 70K per year, Nurse Anesthetists, well over 100K per year.

    Just depends what you want to do in nursing...but at least 20 per hour.
    $20 an hour for a 40 hour week = $800 a week, or just over $3200 a month, under 40 grand, but that's without benefits and overtime.

    I think the comparison is apples to oranges. Do public sector employees make more than private? There is no definitive answer to that one.

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    Quote Originally Posted by splansing View Post
    Public employees typically enjoy decent benefits packages. Do we know if that data was incorporated into the compensation comparisons?
    No, but the second link talks about the CPI:

    Prices measured by the CPI are down 1.8% from their peak in July 2008. For seven months, the CPI has declined from the same month a year earlier the longest stretch since 1955.

    That trend is upsetting a wide range of wage-and-benefit packages in this recession.

    Nearly 80 million people have wages or benefits tied to changes in the consumer price index. Those include contracts for 2 million unionized workers, food stamp payments and some child support checks. The Labor Department announced Thursday that federal pensions won't increase next year.

    The consumer price index fell 3.3% in the last quarter of 2008. Most cost-of-living adjustments include the end of last year in changes that take effect Jan. 1.
    Ten states link minimum wages to inflation. But, unlike Colorado, most states do not cut minimum wages when prices fall.

    Ohio recorded a 0.2% drop in prices in the past year, says Dennis Ginty of the Ohio Department of Commerce. Like Social Security rules, Ohio's law permits only cost-of-living increases, never decreases, Ginty says.

    Business groups say this one-sided inflation adjustment is unfair. "The bar should move both ways, up and down, if you're going to have a cost-of-living adjustment," says Shawn Cleave, a lobbyist for the Oregon Farm Bureau.
    So what they are saying is wages in the private sector go down when the CPI does, but government wages do not. What I'm left wondering is do the wages of private sector workers go back up when say, the price of fuel increases, or do they stay the same.

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    Trumpaloompa Tormenter Cicero's Avatar
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    Quote Originally Posted by Blueneck View Post
    No, but the second link talks about the CPI:



    So what they are saying is wages in the private sector go down when the CPI does, but government wages do not. What I'm left wondering is do the wages of private sector workers go back up when say, the price of fuel increases, or do they stay the same.
    and here we go again...

    First, the BLS data is not intended to be used the way it's being used.
    Second, simplistic averages (such as used by USA today) ignore other factors which affect pay (longevity in the job, security clearances, hazardous duty pay, overseas service pay, and etc).
    Reasons for the Differing Conclusions

    The reason for the wildly differing conclusions reached in the analyses by the Office of Personnel Management and the Bureau of Labor Statistics as well as those by the Heritage Foundation and the American Enterprise Institute is simple -- they are "measuring" different things. They share a basic problem in that their conclusions are based on black-box statistical methods that defy easy understanding.

    OPM is required by statute to determine market pay levels for jobs comparable to those assigned to the grades in the General Schedule. BLS data collectors assign survey jobs to grades and averages are calculated. Significantly, they are not working to determine market rates for federal jobs; their data do not show whether federal jobs are overpaid or underpaid. Their mandate and methods differ starkly from anything industry uses.

    Another statutory requirement is that OPM uses BLS data. The source of the data is the Employment Cost Index. That is a time series developed to track the percentage increase in pay levels across the country. In reporting percentage increases, it is similar to the Consumer Price Index.

    As a BLS acquaintance once put it in a meeting, "You wouldn't use the CPI to set the price of a jar of mustard." His point was they do track mustard prices for the CPI, but with all the sizes and varieties, the data are not appropriate for setting prices -- or salaries. No private sector employer would consider using ECI data to plan salaries.

    AEI and Heritage share a different purpose. Their focus is the pay of individual employees. As their studies point out, other researchers have completed similar analyses and also concluded federal employees are paid above market levels. The word researcher is important -- normally the analyses are reported only in academic journals. Their results have virtually no practical value to managers addressing salaries.

    They rely on a very different database, the Current Population Survey. The survey is never used for salary management. A fundamental problem is this database fails to include information that is central to analyzing market pay levels (e.g., job level). The think tank analyses reflect several assumptions at odds with the dynamics of labor markets.

    Both OPM and the think tanks rely on "sophisticated" statistical analyses, but their focuses are very different. Both could be correct in their claims -- it all rides on the assumptions. Neither, however, focuses on understanding market pay levels for federal jobs. Nor can they identify the jobs or the individuals who are overpaid or underpaid. My recommendation is to assume neither generates usable market data, and to initiate a conventional market analysis. I am confident GAO will reach the same conclusion. (You should be aware that when GAO planned its own salary system, its analysts relied on a conventional approach to "market pricing" -- they compiled market data from benchmark salary surveys.)

    Analysis: An open letter to Chairman Issa on federal pay (4/14/11) -- GovExec.com

    So let's start by IGNORING the USA today drivel and look for a meaningful analysis.
    I agree that there is reason to believe that private sector wages have not risen, and there is cause for concern that these flat wages don't reflect the true value of the services being provided. Using the flawed USA/Heritage/AEI study is not the place to start. It's a hit piece being used to promote their agenda and that's all.

  6. #6
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    My complaint is that we keep hearing how public employees make too much, when my feelilng is that it just looks that way because wages in the private sector have been on a downward trend. All this hoopla over the pampered publc employees is just because the private sector is getting away with cutting the wages and benefits of everyone in non-executive jobs, and now by comparison, government employees look like they've got it made.

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