Study: Benefits present concerns, but Michigan's local governmental leaders don't believe workers are overpaid
A wide majority of political leaders at Michigan's municipalities believe their public employees are not over-compensated, according to a new survey released by the University of Michigan Ford School of Public Policy's Center for Local, State and Urban Policy (CLOSUP).
But the survey also reveals a split in opinions on the issue among governmental leaders at big municipalities and small municipalities. The big-city officials are much more likely to believe that their employees are over-compensated, while leaders at small jurisdictions are less likely to believe so.
"While very few of Michigan’s local leaders think their jurisdictions’ employees are overpaid, more leaders do in fact believe that their jurisdictions’ fringe benefits are too generous and that employees don’t pay enough toward their own health care costs," according to the report.
"However, there are significant differences in these views, often based on the size of the jurisdiction and its region within the state. In particular, officials from the state’s largest jurisdictions are more likely than others to think their employees are overpaid and have benefits that are too generous."
Overall, about 6 percent of local governmental leaders say public employee salaries are too high, 65 percent say salaries are fair and 25 percent say they are too low, the survey found.
At jurisdictions with populations of at least 30,000, 17 percent of governmental leaders say salaries are too high, 10 percent said salaries are too low and 73 percent said salaries are fair.
The cost of benefits -- including pensions and health care insurance -- seems to be the most worrisome element of employee compensation for local governmental leaders.
In all Michigan jurisdictions that offer benefits to employees, 27 percent of political leaders say benefits are too generous, 8 percent say benefits should be more generous, and 62 percent think current levels are appropriate.
But in jurisdictions with at least 30,000 residents, 53 percent of leaders say benefits are too generous, while 46 percent say they're fair.
Some 82 percent of leaders at the largest municipalities say pension costs are "somewhat" of a problem or a "significant" problem, according to the study. In the same jurisdictions, 78 percent of leaders say health care costs are a problem, including 41 percent who said it was a significant problem.
The survey comes as Michigan's debate over public employee compensation is intensifying.
According to federal data recently compiled by University of Michigan economists, employees at Michigan's local governmental units received benefits worth $14,300 in 2009, up 68.91 percent from $8,467 in 2000. In comparison, private sector workers in Michigan received $9,614 in benefits in 2009, up 40.72 percent from $6,832 in 2000 reported.
Salaries for local government employees -- a figure that includes municipal employees, county government workers and K-12 employees -- rose 33.37 percent from $32,266 in 2000 to $43,032 in 2009, according to the data compiled by U-M. Salaries for Michigan's private sector employees increased 15.39 percent from $37,050 in 2000 to $42,751.
Unions argue that public employees are better educated than the average private sector employee and, thus, should be better compensated. Proponents of cuts say public employee costs are not affordable and need to be scaled back.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Townie
Thu, Feb 10, 2011 : 4:07 p.m.
Funny how no one in the media has mentioned the fact that Michigan pension funds were 'invested' (I use the term loosely...) in some shaky, but closely politically connected firms like Lehman Bros. who proceeded to lose those funds. Yet no investigation was ever done to determine why such risky investments were made (campaign contributions, political connections) and all that money lost. First you have legislatures who underfund the pensions (by giving the tax cuts to the wealthy) then you risk and lose the funds on risky investments. Then you blame the employees! Amazing logic. And the public buys the excuse as the media stands aside and doesn't really look at what happened.
erethizon
Wed, Feb 9, 2011 : 7:14 p.m.
Yes, the current Pittsfield administration is an ugly exception. As a general rule public employees are underappreciated and often underpaid.
Dog Guy
Wed, Feb 9, 2011 : 5:03 p.m.
A wide majority of political leaders at Michigan's municipalities are apparently overpaid and out of touch with reality.
oldmanriver
Wed, Feb 9, 2011 : 3:55 p.m.
THE problem is the pension liabilties! WE are on the hook for these as taxpayers and I dont know many people in the private sector with such generous pension and healthcare benefits. This is causing huge issue in California where some communities have to raise taxes and cut services in order to make their contributions to CALPERS. Since almost everyone in the private sector has converted to 401K type plans why not the public sector too. Why should they have better benefits when the taxpayers who fund this have lesser benefits.
timjbd
Wed, Feb 9, 2011 : 2:35 p.m.
Plus, It is NOT the fault of the public employees that their pensions are now under-funded. And yet, they continue to be demonized by people who don't bother to look beyond the latest corporate-sponsored rant from Rush Limbaugh or John Boehner. Pittsfield township leadership is NOT emblematic of the public sector as a whole. Your kids' teachers are. The people who maintain the parks and baseball diamonds are. The people who run the behind-the-scenes machinery of this very livable city are. So instead of attacking them for trying to hang on to what they've negotiated for in good faith- and have been giving back and giving back for years now- try accepting that a livable city and state is actually worth paying a little extra for in the way of taxes. Government is FAR CHEAPER and more efficient than the private sector, no matter what the privatizers would have you believe. There are still many things that need to be done that are not necessarily (or shouldn't be) profitable - teaching, healthcare, parks, civic planning, etc. That's the role of government - to fill those needs. It needs and deserves to be supported.
tim
Thu, Feb 10, 2011 : 1:49 p.m.
Good thoughts timjbd I would also add that we pay for employee benefits in most of the goods and services we buy. We don't stop and ask the question ( I'm not paying for this bread because it helps to pay for someones health insurance. Society only asks these questions when the word tax is in front of them.
timjbd
Wed, Feb 9, 2011 : 2:33 p.m.
--- "While very few of Michigan's local leaders think their jurisdictions' employees are overpaid, more leaders do in fact believe that their jurisdictions' fringe benefits are too generous and that employees don't pay enough toward their own health care costs," according to the report. --- The obvious answer to this is making them - and everybody else - pay for ALL of their healthcare costs through taxation. Cover everyone, have the cost reflected in the taxes you pay. Simple. Private health care has 25-30% overhead while Medicare has 2% overhead. It's such a no-brainer that Washington think tanks had to take 30+ years devising their strategy for getting people to believe the opposite was true. Like getting people to believe that burning coal was good for the environment or that Sarah Palin was a viable choice for President. Furthermore, public employee pensions are the result of politicians negotiating public employees OUT of minimal raises in favor of deferring those raises out into the future. Then those same politicians deciding to NOT FUND those pensions promises thereafter. "Hey. I'm a tax-cutter, folks! I make big promises and then I renig on them. It's easy! You can't believe anything I say but vote for me and I'll cut your taxes. Nothing bad'll happen, I promise!"
erethizon
Wed, Feb 9, 2011 : 2:32 p.m.
Most telling about the current Pittsfield administration is that these are the same people who tried to have the previous administration recalled for being too highly paid. Even as they claim that the township has no money, Grewal and company have awarded themselves even more compensation while working less. I suppose their previous complaints must have simply been lies for political gain. Fancy that.
bugjuice
Wed, Feb 9, 2011 : 2:26 p.m.
Why not try to raise all working people's wages and benefits instead of tearing down those who worked and bargained collectively for theirs? Jealousy and resentment of working people who had the sense and the strength to band together and resist the unlimited power of avaricious corporations. Plain and simple.
Tom Teague
Wed, Feb 9, 2011 : 2:24 p.m.
@Nathan - I really appreciate your quest to find and post these figures. I've been looking for a similar aa.com article on City of Ann Arbor salaries and benefits that I remember reading but can't locate it. Since commenters and comment readers see frequent slicing and dicing of salary and benefit data without a lot of context, would it be possible for AnnArbor.com to publish links to this and the other salary and benefit data / articles in one location where we can access it easily? Call it a Common Data Set for those of us who are chronically unable to quit analyzing our local budget woes.
bugjuice
Wed, Feb 9, 2011 : 2:19 p.m.
When presented with real life factual comparisons instead the simplistic rationalizations of Chinese calculator economists, the race to the bottom, take whatever crumbs the corporate bosses might toss to working people, the blame the public employee crowd for all our ills crowd, returns to their Fox News-Republican Party supplied talking points.
nekm1
Wed, Feb 9, 2011 : 2:14 p.m.
Would someone at the paper please research the current cost of Pensions in Washtenaw County or even Ann Arbor City current and former employees to put these "costs" into perspective. I would be willing to bet that if local taxpayers knew that Pension/Health Ins costs for retired employees was bankrupting our system, they wouldn't be so quick to poo poo high government labor costs. There are counties in Michigan (like Saginaw County) that could fire every current employee, and not have enough tax revenue to cover grandfathered pension/health benefit costs! Please study this issue, and report your findings... It isn't about political parties at this point, it is about reality.
Jay Thomas
Wed, Feb 9, 2011 : 1:37 p.m.
Then why are they always asking for more money from the state? If everything is right on course then make do with what you have!
runbum03
Wed, Feb 9, 2011 : 5:02 a.m.
Unions argue that public employees are better educated than the average private sector employee and, thus, should be better compensated. Why? There are a lot of truck drivers with four year degrees. Nobody cares. An education once was to serve the public; now it means the public should serve the public servants. Who made that rule up? That's messed up.
tim
Wed, Feb 9, 2011 : 1:19 a.m.
The private sector is increasingly losing its health insurance benefits . The Republicans want to do the same for government workers. If our elected officials try to fix the problem they are attacked as socialist. How long until Americans crack and start acting like Egypt?
Basic Bob
Tue, Feb 8, 2011 : 11:01 p.m.
Pittsfield is cronyism gone wild! Their org chart shows a deputy supervisor, deputy clerk, deputy treasurer, public service director, 6 other directors, 3 deputy directors (1 vacant). ALL getting promotions, raises, and on vacation at the same time.
Gemini27200
Tue, Feb 8, 2011 : 10:44 p.m.
If Pittsfield Township employee compensation is any indication, public sector employees are on the gravy train. Pittsfield has the highest paid Township Administrators in Washtenaw County. All Employees (that includes the administration) have 15 Paid Holidays + 100% Paid Medical Insurance. Not even U of M has benefits that good. Of course that doesn't include Pension and other amenities. How many private sector employees living or working in Pittsfield have those kinds of benefits?
timjbd
Wed, Feb 9, 2011 : 6:27 p.m.
You are conflating the politicians at the top and the workers down below. The Pittsfield Township gov't is an anomaly, not in any way the norm. The reason pensions are causing problems is because the politicians who negotiated for them (in lieu of actual pay raises) promised to FUND them while also promising TAX CUTS out of the other side of their mouths. Those two are obviously mutually exclusive but it's not the fault of the public employees. Blame the politicos who promised tax cuts when they should NOT have.
Cash
Tue, Feb 8, 2011 : 11 p.m.
I think you just said that it isn't any example because they are higher paid and have better benes than the other local governments.
Basic Bob
Tue, Feb 8, 2011 : 10:31 p.m.
Public sector workers rarely move back into the private sector. That is an indication that they have it just too well. The comparisons are simple. Public school teachers make more than private. State road workers make more than private. Police officers make more than security guards. Is that because of their education and training? No, it is mostly because they got in. Unfortunately, government (and some large corporation) workers believe that because they "manage" people to do their work for them, that they are more valuable than the people putting forth the effort to get the job done. In the real world, whole departments of people would be at risk of being eliminated because they add no value.
timjbd
Wed, Feb 9, 2011 : 8:44 p.m.
"Public sector workers rarely move back into the private sector. That is an indication that they have it just too well." You must be kidding. All of the K Street lobbying machine is populated by people who learned the ins and outs of the public sphere in the Congress only to leap headlong into/be co-opted by private business interests. This is how it works- you learn the ropes in the congress, then you spend the rest of your life subverting it for private profit.
bugjuice
Wed, Feb 9, 2011 : 3:28 p.m.
Please provide the "facts " to back up your allegations, Sir.
bugjuice
Wed, Feb 9, 2011 : 3:27 p.m.
Instead of lowering some folks wages and benefits (in your argument all public employees) why not work to raise wages and benefits for all working people?
Cash
Tue, Feb 8, 2011 : 10:58 p.m.
Basic Bob, I moved to private sector! It worked fabulously!
Townie
Tue, Feb 8, 2011 : 10:29 p.m.
Finally some facts and studies are being used in this discussion. Up to now it's been mostly hearsay and opinion based on attacks on public employees (except soldiers you might notice) by the Republican Party. There's also a study from EPI that refutes the usual arguments that public sector employees are overpaid. The 'study' cited by the Governor wasn't really a study - just some simple math that even the Governor has stepped back from. This is part of the Republican meme that government is the problem and also used to attack unions and portray them as the enemy as they try to do away with any attempt by employees toward collective bargaining. Docile, scared employees who don't have any other opportunities or rights is what corporations want (the core constituency of the Republican Party along with the wealthy). The pension problem arose because tax cut crazy governors decided to give away state revenue to the wealthy (the cuts were supposed to create jobs, but never did and never have) and then with less revenue the states haven't been able to pay the pension obligations they undertook. Solution? Blame the public employees and demonize them. Nice trick.
stunhsif
Wed, Feb 9, 2011 : 3:12 a.m.
Thanks for the hearty laugh tonight. You should be a comedian !
Basic Bob
Tue, Feb 8, 2011 : 10:42 p.m.
Please cite the exact facts and studies. This is only an opinion poll on a biased population, performed at the behest of a public institution.
Cash
Tue, Feb 8, 2011 : 10:25 p.m.
I don't think anyone can really know whether public employees are over compensated or not unless they do comparisons by level. For instance I think some people might be surprised at the salary of a janitor at EMU, and that a great number are temporary help working at very low hourly wage with no benefits. The same could be true for many of the clerical workers with decades of seniority, yet low wages. Now if you turn that around and look at the upper echelon, there's some big bucks. However, what jobs are comparable? A business executive? At what level? It's apples and oranges.
Tom Teague
Wed, Feb 9, 2011 : 2:34 p.m.
Cash is right. The comparisons have to be done skill-set to skill-set and job-requirements to job-requirements. Benefits also have to be compared within -- not across -- job categories since they are not one-size-fits-all.
stunhsif
Wed, Feb 9, 2011 : 3:06 a.m.
wrong, it is not the salaries. It is the healthcare benefits and pensions allowing folks to retire at the age of 51 with a fat pension and healthcare till they die 40 or 50 years later. You should know this by now !
InsideTheHall
Tue, Feb 8, 2011 : 9:33 p.m.
How about surveying those who leave the public sector and want kind of jobs they end up with in the private sector?
Tony Livingston
Tue, Feb 8, 2011 : 9:30 p.m.
The problem in Ann Arbor is not the salaries. It is the retirement program. Giving people pensions amounting to 70% of their pay plus insurance starting at age 50 is the big, big problem. This is bankrupting the city and costing the property owners millions. No one needs to retire and recieve a pension before age 62. Giving a 12 year paid vacation is insane. By the way, both union and non union employees have this benefit.
braggslaw
Tue, Feb 8, 2011 : 8:54 p.m.
The comparisons are getting silly. Ultimately it is up to the taxpayers/voters to decide and they have decided. We don't want the highly paid state workers with enormous pension and health care obligations. It is that simple.
bugjuice
Wed, Feb 9, 2011 : 3:32 p.m.
I suppose you think that $25,000 annual pension for 29 years of public service with the highest annual wage of $56,000 "enormous"
Linda Peck
Tue, Feb 8, 2011 : 8:49 p.m.
Might I suggest that benefits are part of the payments made to government workers and need to be included in the figure that determines if they are overpaid, not only the wages.
ronaldduck
Tue, Feb 8, 2011 : 8:44 p.m.
atnaap I completely agree. Because a large portion of private sector emplyees work at party stores, Walmart, Target, Meijer, cutting grass, delivering pizza, waiting tables ect. They make minimum wage or only slightly more. Those kinds of jobs are rare in the public sector. We need to compair jobs with higher education standards and more responsibility.
theodynus
Tue, Feb 8, 2011 : 8:13 p.m.
Comparing benefits and salaries of average government employees to average private sector employees is completely meaningless. The question is whether government employees get paid more for the same job as their private sector counterparts, not how they compare to the average Michigan worker.
bugjuice
Wed, Feb 9, 2011 : 3:33 p.m.
and the private contract building inspectors make upwards of $75k? as opposed to a public employee inspector making around $55k?
stunhsif
Wed, Feb 9, 2011 : 2:59 a.m.
Didn't know private sector compaines competed with the state of michigan and could issue license plates and registration tabs for vehicles, or do building code inspections plus many others ?
ronaldduck
Tue, Feb 8, 2011 : 7:53 p.m.
Public employees make $281 more than private employees. Hopefully at least that part of the arguement is over. You can't hear me laughing, but trust me I am. The rise in benifits for both parties is almost all due to increases in health care cost. Just thought I'd mention that.
Macabre Sunset
Tue, Feb 8, 2011 : 7:15 p.m.
With Obama's henchmen yapping about a big state bailout, who needs fiscal responsibility? After all, it's not their money they're spending. It's their grandchildren's money.
Basic Bob
Tue, Feb 8, 2011 : 6:30 p.m.
Elected officials have difficulty reducing pay. It's hard to cut employee salaries and keep getting pay raises. Especially when your re-election depends on the support of public service unions.
cibachrome
Tue, Feb 8, 2011 : 6:11 p.m.
Well of course they don't believe it. That's why just about all government agencies are in budget trouble and are having success finding solutions via privatization. Just march into a Secretary of State office and watch the performance. If that agency were run by a private company, either the pay would be different or the performance would be. "Good, Fast, Cheap" . You only get to pick two.