Part 5: Let's lay this myth to rest once and for all!

Over the last 4 posts, we've looked at the research that shows that when total compensation is viewed (i.e. wages plus benefits), public employees are not overcompensated. If anything, they are somewhat undercompensated.

The research done by Heywood and Bender is not an outlier. Their work has been replicated in other national studies. Two examples are Debunking the Myth of the Overcompensated Public Employee by Jeffrey Keefe of the Economic Policy Institute and The Wage Penalty for State and Local Government Employees by John Schmitt of the Center for Economic and Policy Research.

There is one additional question to address before we can lay this entire myth to rest: Were public sector workers and their unions to blame for state budget problems?

Twelve states have attacked collective bargaining by public sector unions in 2011: Wisconsin, Ohio (since repealed by voters), Indiana, Arizona, Idaho, Michigan, New Hampshire, Oklahoma, South Carolina, Tennessee, Utah and Wyoming. All accuse public sector workers--and their unions--of being at the root of state budget deficits. Once again, the answer is in the research.

The Center on Wage and Employment Dynamics, part of the Institute for Research on Labor and Employment of the University of California, has published a 2011 study titled The Wrong Target: Public Sector Unions and State Budget Deficits.

"The large state deficits have frequently been blamed on a growing public sector. For example, Governor Scott Walker warned that Wisconsin 'cannot grow if our people are weighed down paying for a larger and larger government.' However, the size of the public sector has not grown in recent years, neither in terms of public sector employment levels nor public sector compensation." [Emphasis mine.]

Let's look at the numbers. "State and local government workers as a share of the workforce has been relatively steady since 1979....Overall, the share of workers in state and local employment averaged 14.2 percent over the thirty year period and ranged from a low of 13.6 percent at the height of the boom in 1999 to a high of 15.2 percent in the great recession in 2009 reflecting the greater loss in private sector employment—over 5 million private sector jobs were lost that year.  By midway through 2011, the share of workers employed by state and local governments had fallen back to 14.6 percent." [Emphasis mine.]

"Not only has the share of state and local government jobs remained relatively steady as a percentage of all jobs, but state and local government employment per thousand residents has also remained steady....In 1990, the United States as a whole had an average of 17.2 state workers per thousand residents. In 2009, there were 16.8."[Emphasis mine.]

"Might union states be different? New York Times columnist David Brooks argued, “public sector unions can use political power to increase demand for their product.” If he is correct, we should expect states with high public sector union density—the share of public sector workers in a union—to have more public sector workers per thousand residents, than states with lower public sector union density. In order to test this hypothesis, we examine the ten states with the highest share of public employees in unions and the ten states with the lowest share of public employees in unions. .. the lowest union density states averaged 69.1 state and local employees per thousand residents in 1990 and 74.6 in 2009. The highest union density states averaged 65.1 state and local employees per thousand residents in 1990 and 68.3 in 2009. The number of state and local employees per thousand actually fell in the high union density states between 2001 and 2009....No correlation was found between public sector union density and the level of public sector employment in a state. Contrary to Brooks' assertion, there is no evidence that public sector unionization has resulted in a growth of the public sector workforce." [Emphasis mine.]

"Not only has the number of public sector workers per thousand residents remained steady, but public sector compensation as a share of state budget has actually declined....The share of state spending that went towards compensation fell steadily between 1992 and 2002 and remained stable from 2002 to 2009." [Emphasis mine]

"The average share of the budget spent on compensation over the time period for the ten most highly unionized states was 19.6%, compared to 18.7% for the ten least unionized states. By 2009, that gap between the two groups had narrowed to 0.5% (19.8 vs 19.3 percent)...Budget deficits were not caused by an increase in funding going to compensation for public sector workers." [Emphasis mine.]