Top 5: Statistics that will influence Michigan's debate over public employee compensation cuts
As Gov. Rick Snyder and the Michigan Legislature consider ways to eliminate the state's $1.8 billion budget deficit for 2011-12, the spotlight on public employee compensation is intensifying.
Michigan Gov. Rick Snyder
Who is to be believed?
Data released today and compiled by University of Michigan economist Don Grimes from the U.S. government's Bureau of Economic Analysis provide a new source of information.
For his part, Grimes -- a public employee himself, though not a member of a union -- said Michigan can't afford to compensate public workers at current levels.
"It's not that the public sector workers did anything wrong. The problem is that our private sector workers wages (as well as jobs) just collapsed over the past nine years," Grimes said in an e-mail. The "private sector simply can't support the level of public sector worker pay and benefits."
Snyder, appearing Monday on a panel hosted by Business Leaders for Michigan, is expected to deliver a new document outlining Michigan's financial picture. It's part of a campaign promise to release "a balance sheet in plain language" to illustrate the state's financial woes.
"When you lay the facts out, we’ve spent significantly beyond our means in terms of government at all levels," Snyder told AnnArbor.com in October.
Snyder's official budget proposal comes in mid-February.
A recent poll commissioned by the Detroit News found that 52 percent of Michigan voters would support a plan calling for total compensation for state workers to be slashed by 5 percent. About 39 percent of voters said they would oppose such a proposal.
As the debate heats up, here are five statistics that are likely to influence the debate over proposed public employee compensation cuts in Michigan:
1. State government employees received non-wage compensation -- that is, benefits such as retirement packages and health care benefits -- worth $15,059 in 2009, up 62.14 percent from $9,287 in 2000, according to the BEA data. 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.
Conservatives will leverage these statistics to put pressure on public employee unions to accept cuts to benefits.
2. Salaries for state workers increased 38.1 percent from $34,163 in 2000 to $47,178 in 2009, according to the Bureau of Economic Analysis data cited by U-M. 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. Salaries for Michigan's private sector employees increased 15.39 percent from $37,050 in 2000 to $42,751.
3. About 55 percent of state workers earned at least a bachelor's degree, according to a 2009 study by Michigan State University economist Charles Ballard. Ballard's study, citing Civil Service Commission data from 2007, indicates that: state workers with a high school degree receive salaries worth 93.2 percent of their private sector colleagues; workers with an associate's degree 94.9 percent; workers with a bachelor's degree 72.4 percent; workers with a master's degree 62.2 percent; and workers with a doctoral degree 76.1 percent.
Expect public sector unions to use these statistics to argue that public workers are better educated than private sector employees with comparable levels of education and shouldn't be forced to accept compensation cuts.
"On the surface, it might appear that the state employees are paid slightly more than their counterparts nationwide," Ballard reported. "However, the State of Michigan employees have substantial experience, and they are unusually well educated."
4. The state saved $143 million from 1997 to 2006 after switching to "defined-contribution" pensions for new state workers hired after March 1997, according a November 2008 study by the House Fiscal Agency. Workers hired before March 1997 still have "defined-benefit" pensions.
In Michigan's budget debate, politicians will argue over whether that was enough. Snyder told AnnArbor.com earlier this month that he would focus his effort to cut public employee compensation on the cost of benefits and said 401(k) plans should be considered as a replacement for pensions.
5. Average total compensation for Michigan's state workers -- a figure that includes salaries and benefits -- was $62,237 in 2009, according to U-M data. That compares to $67,996 in Illinois, $63,167 in Minnesota, $52,589 in Wisconsin, $49,773 in Ohio and $47,007 in Indiana.
Total compensation for Michigan municipal employees was $57,333 in 2009. That compares to $58,346 in Illinois, $53,441 in Minnesota, $53,398 in Ohio, $50,111 in Wisconsin and $50,050 in Indiana.
Said Grimes: "While it might be appropriate to ask the private sector to pay higher taxes to help poor people, it seems a bit unseemly to ask people who have already taken a hit to pay more taxes so that public sector workers can maintain better wages and especially benefits than they are getting."
Still, Grimes said compensation cuts may have unintended side effects.
"We may risk losing some of the more talented public sector workers, but that is something that management will have to deal with on an individual basis," he said.
One additional element to consider in the public employee compensation cuts is the political influence of criticism over executive compensation rates.
Snyder's top executives include Michigan Economic Development Corp. CEO Michael Finney and Department of Technology Management and Budget Director John Nixon, who will each be paid $250,000 annually, according to the Detroit News. Snyder himself is allowed a salary of $159,300. He's reportedly said he'll take a lower salary, but hasn't specified how much that will be.
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
John Q
Thu, Feb 3, 2011 : 12:04 a.m.
"Task for task, public employees are over compensated compared to their private sector peers." What studies are those? Surely not the Anderson report which clearly stated it did no such thing.
Edward R Murrow's Ghost
Wed, Feb 2, 2011 : 11:30 p.m.
"Task for task, public employees are over compensated compared to their private sector peers." Alphaalpha, Can you give me the citation for where Governor Snyder's study says that public employees are over compensated "task for task" (i.e., the governor did a like job-to-like job comparison of pay)? Nope. Didn't think you could. Just another fabrication. And one, apparently, that A2.com is willing to let pass. Good Night and Good Luck
AlphaAlpha
Wed, Feb 2, 2011 : 2:17 a.m.
It's interesting that, just in the recent week or so, two separate studies from two reasonably astute organizations come to the same conclusion: Task for task, public employees are over compensated compared to their private sector peers. Hopefully, current and retired public employees will continue to add to the debate. Your comments and have been very helpful. Good luck.
AlphaAlpha
Wed, Feb 2, 2011 : 2:08 a.m.
"As was expected, Snyder lumps in public employees with a labor pool that includes entry-level, minimum wage workers and declares them to be overpaid and overcompensated." As Eddy has previously suggested, let the comparisons begin.
Edward R Murrow's Ghost
Tue, Feb 1, 2011 : 5:03 p.m.
alphaalpha wrote: "Uh oh. New data. The public sector - private sector pay disparity is worse than we thought. From the new report Citizen's Guide to Michigan's Financial Health: 'FIGURE 8: Average State Employee Compensation is Twice Average Private Sector Worker, 2009'" Indeed, it does say that. So now we know we have a governor who dissembles in the same manner as alphaalpha, comparing numbers that cannot be compared and, in so doing, implying that the pay of a teacher or a police officer ought be determined by what a hamburger flipper at Mickey D's gets paid. Let's follow the logic: Business executive pay ought be set by the by what the average American worker earns or, at the very least, by what the average worker in their company earns. I'm certain that he and his business buddies would support such an idea. Yeah, right. In the meantime . . . . Dissemble, dissemble, dissemble. Sad to see such apparently dishonest and unthinking behavior out of our new governor. But he has an agenda, doesn't he? Tax Breaks for his business buddies. The rest of the state? Let'em eat cake. Good Night and Good Luck
John Q
Tue, Feb 1, 2011 : 3:40 a.m.
Key takeaway from Synder's report: "However, this analysis does not compare private and public sector employees with similar jobs, years of experience or education." As was expected, Snyder lumps in public employees with a labor pool that includes entry-level, minimum wage workers and declares them to be overpaid and overcompensated.
AlphaAlpha
Tue, Feb 1, 2011 : 3:24 a.m.
Cyclezealot - The report mentioned just above should answer all your questions. Good luck.
AlphaAlpha
Tue, Feb 1, 2011 : 3:21 a.m.
Uh oh. New data. The public sector - private sector pay disparity is worse than we thought. From the new report Citizen's Guide to Michigan's Financial Health: "FIGURE 8: Average State Employee Compensation is Twice Average Private Sector Worker, 2009"
John Q
Tue, Feb 1, 2011 : 2:37 a.m.
Little Ricky is already gaming the statistics. In his report, he focuses exclusively on the period between 2000 and 2009, with one exception. When it comes to employment numbers, he uses the numbers since 1990. Why? Because that's the only way he can make it appear as if there are more people working in government today than there was when government employment peaked in 2000. If you used the 2000 numbers, as Ricky used everywhere else in the report, you would see that we have fewer people working in local government, state government and public schools. Almost 50,000 fewer people working in government. Why does Little Ricky feel the need to manipulate the numbers to hide that fact?
Cyclezealot
Mon, Jan 31, 2011 : 4:39 p.m.
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. Salaries for Michigan's private sector employees increased 15.39 percent from $37,050 in 2000 to $42,751. ..... . Alpha's point about rising compensation for state employees being compensation being " way up." was his words. For those who believe in statistics. . . Do either one of us need new glasses.. the news story is titled. will data facilitate a discussion of compensation packages.. . From the data provided by the piece. ...: looks like state employees were playing catch up from 2000 to 2009.. pubic vs private.. . where do you come up with "WAY up." when the difference is $43,032 , public vs 42,751 for private. . How do you figure. ?
Cyclezealot
Mon, Jan 31, 2011 : 3:27 p.m.
It's also important to note the size of the Illinois budget shortfall Macabre Sunset 's point only too well demonstrates many of the working public aren't interested in details.. If we were interested in details, we'd feel compelled to take note.. Illinois' state income tax is 3/4's of Michigan's. rate. this rate Macabre raves about will make Illinois' only slightly higher than Michigan's. Both having flat rate income taxes.. . 5 % instead of its old rate of 3%. Formerly , One of the lowest rates in all of the industrial states.. We want informed discussions , we should be curious to know first before making comparisons.
John Q
Mon, Jan 31, 2011 : 2:24 p.m.
Based on what's been released so far, I doubt it will provide "a detailed examination of public sector pay" as some news sources are stating. I expect a glossed-over version of the AlphaAlpha numbers that will compare the pay and benefits of state employees with those who flip burgers and work at Walmart and pronounce the state workers overpaid and overcompensated.
AlphaAlpha
Mon, Jan 31, 2011 : 11:25 a.m.
"Citizens Guide to Michigan's Financial Health", to be released today, should be an excellent read.
John Q
Mon, Jan 31, 2011 : 3:05 a.m.
"John, your stats are irrelevant to today's discussion, which is about compensation levels." Are you actually employed? Most of us who are employed are quite cognizant of how much work we do and what's the appropriate pay for that work. Taking on more work is often a justification for increasing ones compensation. I didn't realize that this was such a difficult concept for you to understand.
Edward R Murrow's Ghost
Mon, Jan 31, 2011 : 12:55 a.m.
"$104K city worker cost is 46K above the 58K US private worker cost. " As usual, bogus numbers. The $104K for city workers is for pay and benefits. The $58K is for private sector workers is for pay only. Moreover, as I KNOW you KNOW (as you say, we've been over this ground before), the BLS website from which you draw this data says that the data cannot be used in the manner you do. The BLS web page makes clear that, much as you don't want to admit it, point #3 in the article above means comparing pubic to private is comparing apples to raisins. Quoting the BLS website at <a href="http://www.bls.gov/news.release/ecec.tn.htm" rel='nofollow'>http://www.bls.gov/news.release/ecec.tn.htm</a>: "Compensation cost levels in state and local government should not be directly compared with levels in private industry. Differences between these sectors stem from factors such as variation in work activities and occupational structures. Manufacturing and sales, for example, make up a large part of private industry work activities but are rare in state and local government. Management, professional, and administrative support occupations (including teachers) account for two-thirds of the state and local government workforce, compared with two-fifths of private industry." In other words, once again, as is almost always the case, your numbers are bogus. Good Night and Good Luck
AlphaAlpha
Mon, Jan 31, 2011 : 12:06 a.m.
"Michigan also has among the lowest per-capita level of public employees of any state. The last ranking I saw in print was 48th out of 50 states. That's fewer people serving more citizens than in almost any state..." John, your stats are irrelevant to today's discussion, which is about compensation levels. Yet another debate point for topic switching, however. Eddy - "Didn't 'think' so"? It seems everyone else could do the math, but just to make you even happier: $104K city worker cost is 46K above the 58K US private worker cost. 46K X 760 = 35M. These numbers have been discussed before, with you and JQ. You might want to see a medic if these memory issues become common...
Edward R Murrow's Ghost
Sun, Jan 30, 2011 : 7:23 p.m.
alphaalpha: When are you going to show us how, using the statistics in the article above, that it is possibe for A2 to cut $35 million from its $100 million budget? Can't do it? Didn't think so. Not surprised at all, however. Good Night and Good Luck
John Q
Sun, Jan 30, 2011 : 4:47 p.m.
Michigan also has among the lowest per-capita level of public employees of any state. The last ranking I saw in print was 48th out of 50 states. That's fewer people serving more citizens than in almost any state. In Rick Snyder and AlphaAlpha's world, the more work you do, the less you deserve to get paid.
AlphaAlpha
Sun, Jan 30, 2011 : 12:30 p.m.
"Governor Snyder doesn't agree with you. He's giving big pay raises..." On the contrary; he is in complete agreement, as is the majority of citizens. It's true "He's giving big pay raises" to a few incoming executives, and we've read how you advocate for pay raises, as recently as yesterday. These raises are insignificant in the larger context of total state employment. It's not the handful of incoming highly paid executives which created the existing huge deficit. It's the compensation packages of the existing approximately 50,000 unelected, unappointed, employees which has contributed to the current budget problems. Competitive wages for similar occupations? It appears Michigan is ready to Just Say Yes.
AlphaAlpha
Sun, Jan 30, 2011 : 12:03 p.m.
"The state government has 10,000 fewer employees today than it did at its peak. Local governments have been shedding employees including police and fire fighters. Those are the facts." Another divert-the-debate trick. : mention employment levels instead of pay levels. The number of public employees is down, but guess what? Their pay is way up! The total amount spent to compensate public employees has risen, non stop, for many years. More money spent on fewer employees? They are very highly compensated, indeed. Those are the facts.
John Q
Sun, Jan 30, 2011 : 3:55 a.m.
"Per numerous sources, most agree: public employees are overcompensated." Governor Snyder doesn't agree with you. He's giving big pay raises to the people coming into state government to serve in his administration. Unwittingly, he's exposing the fraud that's at work in the anti-public employee rhetoric being shoveled around here.
John Q
Sun, Jan 30, 2011 : 3:42 a.m.
"What I find interesting in this debate is the fact that the private sector in this State has lost hundreds of thousands of jobs, yet the public sector remains at about the same number. Fewer people (private)supporting the same number (public) cannot continue. Why haven't the public sector jobs been ruduced in number?" Another statement claimed as fact that has no factual basis. The state government has 10,000 fewer employees today than it did at its peak. Local governments have been shedding employees including police and fire fighters. Those are the facts.
AlphaAlpha
Sun, Jan 30, 2011 : 1:22 a.m.
"Wages and benefits....across the state." Irrelevant. It is a good debate tactic though, to divert attention from this key point: Per numerous sources, most agree: public employees are overcompensated. The taxpaying consumers seem to desire better value. Can you help?
John Q
Sun, Jan 30, 2011 : 12:55 a.m.
"It has been shown repeatedly here and elsewhere that Ann Arbor employee average total compensation cost is currently $104,000 per year." Wages and benefits of Ann Arbor public employees are no more representative of local government employees across the state than the wages and benefits of Ann Arbor residents who work in the private sector are representative of private sector employees across the state. Most people who live and work in Ann Arbor, in the public and private sector, are much better paid and compensated than in most communities across the state.
AlphaAlpha
Sat, Jan 29, 2011 : 11:45 p.m.
"If you're "overpaid" compared to the private sector, you get your pay and benefits cut. [...] It has nothing to do with whether people are fairly compensated, it's about cutting pay and benefits for people who work in government..." 1. Most agree that public employees are overpaid compared to their private sector counterparts, however, the substantial compensation reductions of the overpaid majority of public sector employees have not yet begun. 2. "it's about cutting pay and benefits for people who work in government..." An interesting debate tactic from a good debater, who is an acknowledged public employee as well. It's not so much about cutting pay of public employees because they work for the government; it's about consumers exercising their right to choose to pay competitive prices in trade for value received. Currently, many, and apparently, most, believe that the product received has become too expensive for the price paid. They are about to choose a cheaper alternative. Pro choice? Yup. And, it's not just government; consumers choose value elsewhere, whether by shopping for cheaper goods at cheaper vendors, or simply using less consumables. This concept is perhaps difficult to fathom for some public employees, who, historically, have had very little competition in the marketplace, but you all will surely grow through it. Attempting to cast government workers as victims? Laughable. It would be good of the public employee commenters advocating higher compensation for themselves to periodically state that they are in fact on the public payroll; to not do so is a conflict of interest.
sbbuilder
Sat, Jan 29, 2011 : 11:25 p.m.
Clownfish I'm a 'self made' individual. Noone ever gave me a break. Noone ever gave me a hand up. Not much 'luck' either. What I have had is my job site tools ripped off twice. Employees making up fraudulent claims (we were vindicated, but the paper hassle was incredible). Etc. But there is no skin off my nose, because I wasn't expecting any of those things anyway. What I find interesting in this debate is the fact that the private sector in this State has lost hundreds of thousands of jobs, yet the public sector remains at about the same number. Fewer people (private)supporting the same number (public) cannot continue. Why haven't the public sector jobs been ruduced in number? It will also be very interesting to see what the unions' position will be when asked to make cuts. Will they be willing to take cuts in pay/benefits, or will they throw the recent hires under the bus?
AlphaAlpha
Sat, Jan 29, 2011 : 11:20 p.m.
"I would bet that Grimes overstates the compensation and benefits for local government employees." You would be wrong. It has been shown repeatedly here and elsewhere that Ann Arbor employee average total compensation cost is currently $104,000 per year.
braggslaw
Sat, Jan 29, 2011 : 11:18 p.m.
As Master Chief said "you make your own luck" (Halo reference for the geeks out there) What am I willing to give back... the 40% + of my salary that I pay in taxes along with my time and effort for many causes I feel are important. Your statement about public employees willing to sacrifice is a loaded question. Many of those positions should not exist. Repeat: Govt exists to provide services not to employ people. I believe I am improving Michigan and America by demanding accountability, reducing govt. and releasing capital to be invested in thriving growth businesses that create high paying jobs and improve the standard of living for everyone in America. That is one of my biggest contributions to this world.
braggslaw
Sat, Jan 29, 2011 : 11:12 p.m.
There is a shortage of laborers because people get paid more to be on employment. It is that simple.
clownfish
Sat, Jan 29, 2011 : 10:36 p.m.
-3.2 million jobs available but no qualified people. Whose fault is that? - Right there in the article you link to...."Some jobless individuals (particular those from highly-paid finance jobs) are unwilling to take lower-paying jobs. ...While people are always reluctant to relocate, they are somewhat more so in this period because some of them cannot sell their homes for a reasonable price. Finally, employers may also be at fault because they are opting to wait for the "perfect match" instead of investing in and training employees and new hires." I found this sentence to be enlightening..."A more surprising claim is that generic positions like laborers, secretaries, personal assistants, and drivers are also hard to fill. I can understand the shortage of chemical engineers, but laborers? How can there be a shortage of plumbers and building contractors in this economy? Is it an accountants fault that they did not acquire the skills needed to work in the default industry? Should accountants have forseen what few did? I agree with you that people need to grow, learn and adjust, that govt needs to look at new ways to pay and adjust pensions. What I would truly like to see in one of your posts is an iota of empathy. Just once.
clownfish
Sat, Jan 29, 2011 : 10:28 p.m.
BRAGG, someone gave you a job, probably more than once. I am sure you were quite qualified for those jobs, but unless you created the positions out of thin air, someone gave you a chance. Just about every "self made man" I have ever met caught a break somewhere down the line. Yes, they were ready and able to take advantage of the circumstance, but each one of them was given a chance, a deal, a or even had a little luck. This country has given you the opportunity to thrive, what are you willing to give back? What sacrifices are you making for the country? You ask public employees to make huge sacrifices, what are you doing in return? Are you willing to pay higher taxes to reduce the debt swelled by both political parties? Are you willing to pay a little more in order to take advantage of the socialized airports you use to commute to Europe? What is it like to feel under attack at every turn? It must be terrible.
braggslaw
Sat, Jan 29, 2011 : 10:09 p.m.
3.2 million jobs available but no qualified people. Whose fault is that? <a href="http://www.ibtimes.com/articles/40954/20100805/3-2-millions-jobs-still-unfilled-in-the-u-s-qualified-applicants-scarce.htm" rel='nofollow'>http://www.ibtimes.com/articles/40954/20100805/3-2-millions-jobs-still-unfilled-in-the-u-s-qualified-applicants-scarce.htm</a> Clownfish I do work in Europe so I don't consider it a vacation. Try being jet-lagged and working 18 hour days. I don't want anybody's charity or pity. People make choices and do what they have to do. I have held off on vacations to save money, maxed out my 401k and HSA and reduced expenditures. I didn't get a gimmick loan to buy a house I couldn't afford. Nobody ever gave me anything, those are the circumstances that color my opinion. There is so much opportunity in this country for those who are willing to do the hard things.
John Q
Sat, Jan 29, 2011 : 9:57 p.m.
"If we follow the private sector model, one does not get a raise because they are undervalued by their current employer. One gets a raise primarily be changing jobs.' If you're "overpaid" compared to the private sector, you get your pay and benefits cut. If you're "underpaid" compared to the private sector, too bad. At least you exposed the fraudulent basis of this entire discussion. It has nothing to do with whether people are fairly compensated, it's about cutting pay and benefits for people who work in government. At least you get points for being honest.
John Q
Sat, Jan 29, 2011 : 9:55 p.m.
I would bet that Grimes overstates the compensation and benefits for local government employees. While news reports love to focus on public employees taking home 6 figure salaries and big pensions, most of the people working in local governments across the state get paid nowhere near those numbers or enjoy anywhere near those kinds of benefits.
Basic Bob
Sat, Jan 29, 2011 : 9:23 p.m.
@ John Q, If we follow the private sector model, one does not get a raise because they are undervalued by their current employer. One gets a raise primarily be changing jobs. Once we see that public sector workers are willing to test the private sector job market, it will be clear what their market value is. As is it right now, few are looking outside the government, because the risk outweighs the reward.
John Q
Sat, Jan 29, 2011 : 8:39 p.m.
For all the right-wingers supporting the cut in pay based on private sector comparisons, will you support pay and benefit increases for those government employees who are underpaid and under-compensated compared to their private sector counterparts?
Joel A. Levitt
Sat, Jan 29, 2011 : 8:24 p.m.
Grimes is wrong, and, if he is followed, it will damage our economy. We can afford to make good on our inducement to public employees to work for lower present salaries in return for future benefits. We can pay them if we tax the wealthy. The damage will result from diminishing consumer spending as opposed to taxing the wealthy, which will diminish the purchasing of gold and other hedges and financing foreign ventures.
stunhsif
Sat, Jan 29, 2011 : 7:47 p.m.
OMG ERMG, you are coming over to the "dark side". Hey, I think I am starting to like you. Finally , an ann arbor liberal that is speaking some sense regarding the need to reform public pension and healthcare benefits. Good Day No Luck Needed
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 7:56 p.m.
Nothing I've ever written contradicts the above, and vice versa. I simply have great antipathy for morons who thoughtlessly vent their anger by railing against public employees. Sound like anyone you know? So you're ready to take your haircut??? Good Night and Good Luck
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 7:02 p.m.
sbbuilder: Nowhere did I say public compensation is to be left alone, though the state's problem is not the salary side of the equation. It is the benefits and, most importantly, the pension liability. First, I support the bill now in the legislature that requires public employees pay a minimum of 20% of their health care costs. Any public employee or their union ought support and applaud such a measure. Second, an outline of a solution to the pension problem appears obvious (I don't have the financial details nor the skills to be able to put together specifics): 1) A cut in what current retirees receive from their pensions. This should be as small as possible as they are the least able to make adjustments to income and expenses. They have put their time in and it is what WE, their employers, have committed to. (More to follow--have hit A2.com's limit. Will finish as a reply to this post). Good Night and Good Luck
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 7:04 p.m.
2) A three-tier system for current employees: a) Those with substantial time in the system will retire with a defined benefit plan, albeit smaller than that which they had been promised. b) Those with less time than "substantial" (whatever that might be--to be determined) will be cut out of the DBP and will receive a check which they can invest into a DCP, and they will be in a DCP until they retire. c) Those with but a few years in the system will not carry away anything but will be put into a DCP. I would expect that there would be numerous variations of b) as in 10 years equates to y money, 12 years equates to z money, etc.... But for such a system to work, someone is going to have to pay the bill for those who will remain in the DBP, because the DBP will no longer be receiving contributions from those who were moved to the DCB. The taxpayers would have to pay that bill. So everyone needs to take a haircut. No one gets out of this Scott Free. But, as I said above, because NO ONE is willing to sit in the barber's chair, the problem just gets worse every day. And, as I said above, you can give up on the fantasy of state bankruptcy being the way out of this mess. States cannot declare bankruptcy under current law and, were any such law to pass Congress (very unlikely), that law would have a VERY high Constitutional hurdle to clear. And beyond that, the consequences to all states if any single state were to declare bankruptcy would be immense, which is one of the reasons that arch-conservatives like John Cornyn are moving VERY slowly on this issue. Good Night and Good Luck
countrycat
Sat, Jan 29, 2011 : 5:50 p.m.
The article gives statistics for state, municipal, and private sector benefits saying that private sector received lower benfits. It then stated that state/municipal workers received 72.4% (this rate for 55% of the workforce) up to 94.9% of the pay private sector workers received. Then the statistics that pulled total wages and benefits together was given for state/municipal workers but NOT for private sector workers - now why was that? Was it because total wages and benefits for private sector workers is actually higher?
sbbuilder
Sat, Jan 29, 2011 : 5:07 p.m.
Ghost One quick question. After reading your numerous posts, trying to prop up the losing argument, yet giving no suggestions, I'm left wondering what your long term solution is. After all, it appears that you think the public sector is to be left alone re compensation. Go ahead, give it a try. Then, we can critique your analysis.
clownfish
Sat, Jan 29, 2011 : 5:07 p.m.
I am still waiting for BRAGGSLAW to create some private sector jobs. When will this happen? According to his own words, BRAGG still takes an annual European vacation and lives quite well, deservedly so given his education and work ethic. But, it tells me that he has not been "abused" in any shape, form or fashion. I too have taken a more than 50% cut in pay, total loss of benefits. But, I do not begrudge anybody else their job. I am happy they are still working and spending that money out in the community.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 5:06 p.m.
"This creates an entitlement and makes it difficult to fire bad employees." No, it is exceedingly easy to fire bad employees IF the supervisor has documented their poor performance. In other words, the supervisor has to do their job. Such an awful world that there be due process before someone could be fired--making certain that an incompetent and/or unethical and/or abusive supervisor couldn't ruin someone's life--making certain that someone cannot be fired, and their family's economic situation destroyed by a lout. If supervisors do their job, it is easy to fire employees, whether protected by civil service rules or by union contract. Good Night and Good Luck
clownfish
Sat, Jan 29, 2011 : 4:58 p.m.
Jan 26, 2011 ... Oak Park teachers take 5 percent pay cut Willow Run teachers agree to take pay cuts - AnnArbor.com May 24, 2010 Ypsi bus drivers took a 17% pay cut. Dec 2, 2010 ... 1400 unionized Wayne County employees will get pay cuts of ten-percent ... "Under Michigan law union membership is at an all time low, yet we still have high unemployment. Income taxes are at a 60 year low, yet we still have high unemployment. Why isn't the "end unions and lower taxes to grow the economy" Plan working?
braggslaw
Sat, Jan 29, 2011 : 4:56 p.m.
I have empathy for those who chose to become firefighters, EMS, police etc. BUT they made a choice to start those professions based on a number of factors such as salary, benefits, professional fulfillment, their level of education etc. They are and should be subject to market forces. The way the firefighter and police unions are holding Hamtramck and Ann Arbor hostage is criminal.
clownfish
Sat, Jan 29, 2011 : 4:47 p.m.
A person that puts his/her life on the line daily for the citizens does not deserve to be compensated for that risk? I thought that was one of the mantras of the Randians...risk=reward?
braggslaw
Sat, Jan 29, 2011 : 4:41 p.m.
EMG Well you and I have a fundamental disagreement. Most employees that work in the private sector are "at will" employees. We can be fired "at will", therefore our only job security is to be very good at what we do. (Eventually even the UAW had to realign due to market pressures...no more pension and a two tier pay wage) In Michigan under the public policy exception, an employer may not fire an employee if it would violate the state's public policy doctrine . This creates an entitlement and makes it difficult to fire bad employees. Combined with public unions, good luck in getting efficienceis.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 4:11 p.m.
"Govt. Employees are not governed by market pressures" Really? Why not? Proof?? Didn't think so. The job market is the job market. Employers compete for talent within that job market and pay to hire and to retain talent. In this job market no one is leaving a job voluntarily, so your invitations to those who are in the public sector to leave their jobs because they are unhappy with the pay cuts they have taken ring hollow. Indeed, they reveal a remarkable lack of empathy. Many people in the private sector have made the same complaints on A2.com (one of them a prominent basher of public employees who has posted in this discussion) but no one has invited him to leave his job in the middle of the worst economic downturn in 80 years. Again, lacking any facts, your "observations" are that--YOUR observations, and your oft-stated antipathy toward those in the public sector mean that they have little value in a fact-based discussion. Good Night and Good Luck
braggslaw
Sat, Jan 29, 2011 : 3:41 p.m.
Emg My experiences are anecdotal but I think representative If you are looking for a principle it is simple Govt. Employees are not governed by market pressures, because of this lack of pressure inefficiencies and entitlements are an inherent factor in the public sector As a taxpayer I would prefer less govt and the ability to keep and control more of the money I make State govt will soon be focused on paying the unfunded pension liabilities and not providing services. ,....this is a ridiculous result
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 3:10 p.m.
"My personal experience with some very highly educated people who now work for the state has colored my opinion. I know many people who majored in fine arts, political science, liberal arts, geology, poetry/english, etc. and who have advanced degrees in many of these subjects. They found out that the private sector did not value their education and that working for the state was better than shlepping in a restaurant or becoming an administrative assistant. The state job was a safe harbor for someone who was not valued in the private sector. That being said, their degrees have absolutely nothing to do with their present jobs." Any evidence, aside from your word, that this is true?? Didn't think so. And given your obvious bias against public employees, how shocking that this is what you would see. Good Night and Good Luck
DagnyJ
Sat, Jan 29, 2011 : 3:05 p.m.
Re: Education levels of public employees. It looks as though public employees are more likely than private employees to have advanced degrees. Was their tuition to earn the degrees paid for through employee benefits? And did their union contract have a provision for a pay hike for an advanced degree? If so, this isn't really about education. It's about taxpayers covering the cost of education so they can then pay for a salary increase.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 3:02 p.m.
stunhsif wrote: "The new 'poster boy' for ridiculous pubic employee payouts is retired Sheriff and now McComb county executive Mark Hackel. After almost 30 years as a sheriff, Mr. Hackel retired to a lump sum payout of $590,000 cash and a monthly pension of $6200.00 . On top of that is fully paid healthcare benefits till the day he dies. He is now making around 130 K as county executive as an elected official." What Mark Hackel is pulling down is ridiculous, but the above (not surprisingly) is incorrect. Go to: <a href="http://www.macombdaily.com/articles/2010/12/31/news/doc4d1d6ab4de72b178635516.txt" rel='nofollow'>http://www.macombdaily.com/articles/2010/12/31/news/doc4d1d6ab4de72b178635516.txt</a> Glad that Stun is upset by this. The voters of Macomb County, apparently, are not. And, if they are, I urge them to contact their county commissioners and urge a change (a simple one would be to prohibit drawing a public pension while receiving a public paycheck). Good Night and Good Luck
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 2:20 p.m.
"Listen to these defenders banning together to want to continue this outrageous pay scheme. Everyone else is losing or long lost their DBP ( Defined Benifit Plan), but our Civil Service workers still feel the entitlement urge." Really??? Who said that??? Let's be specific now. Who said/wrote that, and when??? Critiquing the illogic and factual vacuousness of those who slander the public sector at every turn (e.g., "The private sector generates real growth not the public sector. The public sector has abused the taxpayers of this state" and "Public sector jobs are typically filled by the less smart, less marketable, less industrious etc.") is not the same thing as saying that changes and sacrifices aren't needed. Indeed, in other discussions, I and others have acknowledged the need to end defined benefit plans. But the devil is in the details, and everyone (taxpayers, current employees, current retirees) will need to take a haircut in order for it to happen. But no one is willing to sit in the barber's chair. And, in the meantime, the problem only gets worse. What I find intriguing here is the willingness of so-called "conservatives" to weasel out of the obligations that politicians of both parties have made in their name. I guess some contracts are more meaningful than are others. Talk about a sense of ethics with the consistency of Play Dough! And don't hold your breath hoping the state will declare bankruptcy. It cannot do so--there are no provisions for it under federal law. And even conservative Republicans in Congress are treading lightly on this topic due to Constitutional issues and due to the grave consequences for all fifity states if any single state were to declare bankruptcy: <a href="http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=1&sq=state%20bankruptcy&st=cse&adxnnl=1&scp=1&adxnnlx=1296310534-SuNMY4yXmAH2JKq26PdrEw" rel='nofollow'>http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=1&sq=state%20bankruptcy&st=cse&adxnnl=1&scp=1&adxnnlx=1296310534-SuNMY4yXmAH2JKq26PdrEw</a> Good Night and Good Luck
stunhsif
Sat, Jan 29, 2011 : 2:20 p.m.
The new "poster boy" for ridiculous pubic employee payouts is retired Sheriff and now McComb county executive Mark Hackel. After almost 30 years as a sheriff, Mr. Hackel retired to a lump sum payout of $590,000 cash and a monthly pension of $6200.00 . On top of that is fully paid healthcare benefits till the day he dies. He is now making around 130 K as county executive as an elected official. Ridiculous and not sustainable for the taxpayers.
Carole
Sat, Jan 29, 2011 : 1:37 p.m.
Public employee cuts -- maybe we do need to take a look at possible reductions in this area. However, personally I would like to see some cuts in the elected government officials in Lansing. Still has not forgiven them for voting in a huge salary increase when times were good some years ago thus increasing their pension amounts as well. Presently employed with AAPS and have taken two cuts -- one in hours; one in salary while the board of education has decided to increase the new superintendent's salary by $65,000 -- thankfully, Mr. Roberts, former superintendent was with us little folks and took a salary reduction when things got tough.
braggslaw
Sat, Jan 29, 2011 : 1:31 p.m.
Interesting the communists get it, but the American unions don't. <a href="http://world-news.newsvine.com/_news/2010/09/13/5101598-cuba-to-eliminate-500000-state-jobs-spur-private-sector" rel='nofollow'>http://world-news.newsvine.com/_news/2010/09/13/5101598-cuba-to-eliminate-500000-state-jobs-spur-private-sector</a> <a href="http://en.mercopress.com/2010/09/14/cuba-with-unions-support-announces-elimination-of-500.000-jobs-to-boost-economy" rel='nofollow'>http://en.mercopress.com/2010/09/14/cuba-with-unions-support-announces-elimination-of-500.000-jobs-to-boost-economy</a>
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 2:25 p.m.
Yes, because we have a communist economy--one where workers in factories and in the fields are employees of the state, this has great relevance here. NOT! No, braggslaw, despite the right's insistence, we are not slipping toward communism nor toward socialism. Fascism? Maybe. But fascism is a dictatorship of the nationalist corporatist right. You know, the kind of government "modern" American conservatives admire. Good Night and Good Luck
braggslaw
Sat, Jan 29, 2011 : 1:23 p.m.
My personal experience with some very highly educated people who now work for the state has colored my opinion. I know many people who majored in fine arts, political science, liberal arts, geology, poetry/english, etc. and who have advanced degrees in many of these subjects. They found out that the private sector did not value their education and that working for the state was better than shlepping in a restaurant or becoming an administrative assistant. The state job was a safe harbor for someone who was not valued in the private sector. That being said, their degrees have absolutely nothing to do with their present jobs. I hope they gained some personal satisfaction from following their passion but don't make the taxpayers pay for their mistakes.
jondhall
Sat, Jan 29, 2011 : 1:10 p.m.
Doug are you trying to confuse these readers? Are you doing some of that hocus pokus stuff? Is that statement "smoke and mirrors". Listen to these defenders banning together to want to continue this outrageous pay scheme. Everyone else is losing or long lost their DBP ( Defined Benifit Plan), but our Civil Service workers still feel the entitlement urge. To paraphrase Reverend Wright as bit differently "To Damn Bad". When sixty percent of the people have to support forty percent of the people you know what happens? It is like the crumbling bridge in Detroit that the owner keeps raking the cash in and not fixing it Collapses. So take you pay cuts and keep quiet or we will send you to California or better yet Illinois where you can be broke and cold. If permitted here let me say "God Bless America and God Bless Michigan, and as always God Bless Reverend Wright".
Doug Gross
Sat, Jan 29, 2011 : 5:39 a.m.
We get ourselves into trouble when we provide significant post retirement benefits to employees. Why? The future costs are unknown during the period of employement for retirement costs like health care, pension benefits can be funded but all risk is on the employer if returns are poor or if beneficiaries live too long. Private industry has recognized that to best control your costs you need to know what they are. As a result almost no major private employers formed in the last 30 years offer pension or retiree healthcare benefits and most companies that offered them in the past are moving away from them. As citizens we cannot afford to have goverment provide benefits that private industry does not. It is also not necessary to do so since goverments are competing with private industry for employees. For more information check out PEBRC.ORG. Doug Gross
Macabre Sunset
Sat, Jan 29, 2011 : 5:28 a.m.
What we don't see in the study is a comparison of salary based on having the same degree. A Master's in Education is very different from other graduate-level degrees. A lot of this is apples and oranges.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 3:34 a.m.
Still waiting to see the math on the $35 million savings on the $100 million budget. Good Night and Good Luck
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 3:35 a.m.
Don't worry. I'm not holding my breath. Good Night and Good Luck
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 3:33 a.m.
"Much state worker 'education and experience' is irrelevant to their occupations, adding zero value." Because you say so?? And no empirical data to support. All opinion. No Facts. "Ballard never compared state worker education level to occupational relevance." How do you know this? Because A2.com didn't say so? Have you seen the study? All opinions and no facts . . . again. Good Night and Good Luck
AlphaAlpha
Sat, Jan 29, 2011 : 3:26 a.m.
"Ballard's study, citing Civil Service Commission data from 2007, indicates that:..." Ballard never compared state worker education level to occupational relevance. Much state worker 'education and experience' is irrelevant to their occupations, adding zero value.
AlphaAlpha
Sat, Jan 29, 2011 : 3:04 a.m.
"Sounds to me as if the public sector is underpaid compared to the private sector." [sic] Uh, right.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 2:47 a.m.
"Per data previously published onsite, if the city of Ann Arbor paid city employees competitive (i.e., private sector equivalent) compensation, the city could save approximately $35,000,000 per year." Say what?? Bullet #3 above: "state workers with a high school degree receive salaries worth 93.2 percent of their private sector colleagues; workers with an associate's degree 94.9 percent; workers with a bachelor's degree 72.4 percent; workers with a master's degree 62.2 percent; and workers with a doctoral degree 76.1 percent." Sounds to me as if the public sector is underpaid compared to the private sector. But please--elaborate. How do you figure that paying to the figures above will shave $35 million off a less than $100 million budget. No doubt that smoke, mirrors, and hocus-pocus will be involved. Good Night and Good Luck
AlphaAlpha
Sat, Jan 29, 2011 : 2:33 a.m.
Per data previously published onsite, if the city of Ann Arbor paid city employees competitive (i.e., private sector equivalent) compensation, the city could save approximately $35,000,000 per year. That's enough money to hire more city workers, to provide better services, and cut to taxes. Imagine the savings applied county wide, state wide, and nation wide. Even retirees will likely see their retirement contracts significantly amended. In the new age of austerity, taxpayers can no longer support nouveau riche public employees.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 2:33 a.m.
"Public sector jobs are typically filled by the less smart, less marketable, less industrious etc." Written by someone who, apparently, didn't read the article. Good Night and Good Luck
AlphaAlpha
Sat, Jan 29, 2011 : 2:16 a.m.
Vindication. Thank you, Mr. Grimes. Thank you, Mr. Bomey.
braggslaw
Sat, Jan 29, 2011 : 2:06 a.m.
The principle is simple If you are unhappy with your job ...quit If you can find someone to pay you more... Great If you cannot, then you need a sense check on your marketability
Connie
Sat, Jan 29, 2011 : 1:47 a.m.
I work for Washtenaw County (28 years). We haven't had a raise in three years. We had eight days of no pay for 2010 and eight days of no pay 2011. I also pay taxes the same as any working person. There will be more cuts to the employees of Washtenaw County as conditions are slow to improve for the state of Michigan.
jondhall
Sat, Jan 29, 2011 : 1:01 p.m.
You could find a new job I guess no one is holding you hostage are there?
braggslaw
Sat, Jan 29, 2011 : 1:39 a.m.
Depends on what side of the wealth transfer you are on Public sector jobs are typically filled by the less smart, less marketable, less industrious etc.
clownfish
Sat, Jan 29, 2011 : 4:35 p.m.
"...Civil Service Commission data from 2007, indicates that: state workers with a high school degree receive salaries worth 93.2 percent of their private sector colleagues; workers with an associate's degree 94.9 percent; workers with a bachelor's degree 72.4 percent; workers with a master's degree 62.2 percent; and workers with a doctoral degree 76.1 percent." Reading comprehension 101. But, stereotypes save time. I have a relative that works for the State Police. A similar position in the private sector earns up to $1200/day for investigation and $900/day for court appearances. When the roads do not get plowed fast enough for the citizens, when the water mains break and the water stops, when the bridge gets too rough to use and is closed...listen to the griping from the same folks that whine about over paid govt workers. Funny how many of these same people tell us that CEO's deserve their multi million dollar salaries/pensions and buy outs because you get what you pay for and business needs to attract the best, but the same philosophy does not apply to those that serve us as public employees. They want to pay lower wages, then they complain about the service they get. Sad.
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 1:21 a.m.
"The private sector generates real growth not the public sector. The public sector has abused the taxpayers of this state." Yes, because those aren't REAL jobs that people in the public sector do. Good Night and Good Luck
stunhsif
Sat, Jan 29, 2011 : 1:11 a.m.
Thank goodness Mr. Snyder got elected and is now bringing to light the need to get costs in line with revenues and of course this will involve reducing the amount taxpayers pay for funding public sector Cadillac pensions and healthcare. Finally someone in office with a backbone and not caving to any special interests, at least not yet. Get err done Mr. Gov, we support you 1000% !
Edward R Murrow's Ghost
Sat, Jan 29, 2011 : 1:22 a.m.
Using the royal "we", eh? Good Night and Good Luck
Mick52
Fri, Jan 28, 2011 : 11:31 p.m.
I agree that changes have to be made but it's not simple. First the ability for an employee to run up defined benefit plan payouts by working more overtime, saving vacation and sick time in the last few years should be eliminated. If defined benefit plans are eliminated in favor of defined contribution plans there needs to be careful study. An organization has to be sure that an employee's DC retirement plan will provide enough for retirement, especially since certain occurrences can sink a plan. For example, a worker with a retirement plan a few years away from retirement, feeling like his earnings are sufficient could get divorced and see one half of his/her savings go to the ex. All of a sudden retirement does not look so comfy. Market crash can affect earnings too. Not sure how this works with defined benefit plans (divorce) when the final payout is based on final pay. Also in some jobs like police, fire and maintenance, the body can take a beating and many people may not be able to work in those jobs into their 60s when their DC plans have earned enough to give them a good retirement. On the flip side, better medical care has resulted in people living longer and that creates a problem too. Retirees are dying at higher ages now which is a burden on both types of retirement plans, and health care plans. I guess that's the problem with retirement planning, you don't know when you are going to die.
Jaime
Fri, Jan 28, 2011 : 10:09 p.m.
The state use the economic stimulus money to continue to support the inflated salary and benefits paid to state workers. It chose this over real jobs creation. I have had my salary cut in half for the last two years because of the recession and have had to deplete my savings. I object to government employees, especially elected officials, not cutting to mach decreased state income.
Nephilim
Sat, Jan 29, 2011 : 2:51 a.m.
You object now Jaime but you didn't a few years ago when you were probably making double what they were. Back in the day when even yer run of the mill UAW line worker was making 110k nobody cared about the civil servants making half that and the civil servants never complained about the private sector. They stayed the course, now since the bottom dropped out, the private sector so quickly points at how lavish the civil servants have it. I call it karma
braggslaw
Fri, Jan 28, 2011 : 10:03 p.m.
Time to get out the hatchet Mr. Snyder and give the private sector some relief so that we can move this state forward. This quote says it all: ""While it might be appropriate to ask the private sector to pay higher taxes to help poor people, it seems a bit unseemly to ask people who have already taken a hit to pay more taxes so that public sector workers can maintain better wages and especially benefits than they are getting." The private sector generates real growth not the public sector. The public sector has abused the taxpayers of this state.
T Kinks
Fri, Jan 28, 2011 : 9:20 p.m.
No they shouldn't have to take a wage cut! Let's start at the top for a change.
Mick52
Fri, Jan 28, 2011 : 11:19 p.m.
Interesting point. During my stint in public service, more and more, the waste collected at the top. The cuts were made at the bottom and those employees are typically the people the public is served by not the desk riders at the top. Cutting from the top can free up some money that saves more or provides more service.
Macabre Sunset
Fri, Jan 28, 2011 : 9:18 p.m.
It's also important to note the size of the Illinois budget shortfall, even with the monumental tax increase the state recently imposed. Illinois is headed for bankruptcy. Ohio, which was probably in worse shape than Illinois before the depression, is not. I'm afraid it's inevitable that public-sector employees are going to have to tighten their belts the same way those of us in the private sector have.
David
Fri, Jan 28, 2011 : 8:56 p.m.
Senior citizens haven't seen a raise in 3 years, can't Public Employees do some cutting? Have they seen a raise in 3 years?
nekm1
Fri, Jan 28, 2011 : 8:25 p.m.
State workers should recieve "like" pay for similar positions in the private sector, including benefits and 401k. 401k match to first 3% of salary. Enough with the whole pension thing, and let's also take a look at non-essential positions (like assistants) that most of us did away with years ago, because of the work folks can do by themselves on their computers. Who promised folks that they no longer need to work after 30 years? That is a pipedream from the 40's and 50's. At the rate state government is going, our children will have to work till death to make up the subsidy for all of this waste in overpaid civil servants.
uawisok
Fri, Jan 28, 2011 : 8:04 p.m.
I hope everyone remembers we are all,"circling the drain together"...our overhead in infrastructure(sewers,bridges,potable public water,etc) these are expensive fixed costs that need maintained. Would you send a loved one to the lowest bidder? Trained qualified people have earned a premium wage. I'm sure I'll get ignorant and snarky anti union remarks, but they provide little to the discussion.
Olan Owen Barnes
Fri, Jan 28, 2011 : 8:26 p.m.
Also the numbers should reflect that his executive staff gets as high as a quarter of a million dollars a year.
dotdash
Fri, Jan 28, 2011 : 7:39 p.m.
Hurrah! Some real numbers to think about! Thank you thank you thank you. Don't salary negotiations sometimes trade off lower wages for higher benefits and vice versa? So is it fair that we can simply say "your benefits are higher than ours" and strip away benefits, when in some earlier negotiation, someone probably gave up a higher salary to get that higher benefit? Aren't we just saying that we were lousy negotiators and we didn't plan ahead very well? and now we want to back out of the deal?
Olan Owen Barnes
Fri, Jan 28, 2011 : 8:21 p.m.
I am a retired state employee and I must say I agree with you.
Chase Ingersoll
Fri, Jan 28, 2011 : 6:31 p.m.
Does the study on public/private sector wage and benefits consider: 1. layoffs: the degree of largess of public sector employment is minimized if the data is not is simply averages of current employees and does not consider total public sector wages and benefits vs. total private sector wages and benefits. For example, if total public sector wages and benefits are 100,000 in in 2000 and 10 employees and the private sector is 1,000,000 for 100 employees, but in 2009 public sector is at 10 employees and $160,000, while private sector employment is down by 10% of its employees, and the remaining 90 make 40% more, the total wages for the private sector is (10,000 * 1.40 * .9) = 1,260,000 - an effective growth or really only 26% not 40% for the private sector/ 2. self employed: are the number of self employed considered in the study/survey and what are their earnings 2000 compared to 2009. What is the % of self employed, are there many who were receiving private sector earnings in 2000 who by 2009 are not part of the private sector figure because they are not on a payroll, but should perhaps be calculated with the payroll group thereby lowing the figure for the private sector. These are just two questions considering the methodology of the survey, which has been presented without critique (of the methodology) which could significantly affect concluded values.
Nathan Bomey
Fri, Jan 28, 2011 : 7:26 p.m.
Chase, This data provides the average compensation per employee. It is not a calculation of the total compensation the state pays to its employees. According to the Senate Fiscal Agency (<a href="http://www.annarbor.com/business-review/public-employee-compensation-tax-breaks-must-be-cut-michigan-state-budget-expert-says/),">http://www.annarbor.com/business-review/public-employee-compensation-tax-breaks-must-be-cut-michigan-state-budget-expert-says/),</a> in the 10-year stretch from 1999-2000 to 2009-10, the total amount the state spends on employee salaries rose 21.3 percent while state employee retirement contributions rose 134.9 percent and health insurance costs increased 65.3 percent. According to Ballard's study, though, from 2001 to 2008 the total number of state workers declined by more than 11,000. As for your other question, the U-M data is pulled directly from the U.S. Bureau of Economic Analysis' Regional Economic Information System. The federal government calculation of employee compensation appears to refer to "earnings by place of work (the sum of wage and salary disbursements, supplements to wages and salaries, and proprietors' income) less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis. Personal income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for price changes)." <a href="http://www.bea.gov/newsreleases/regional/spi/sqpi_newsrelease.htm" rel='nofollow'>http://www.bea.gov/newsreleases/regional/spi/sqpi_newsrelease.htm</a>