February 2011
February 08, 2011

Mythbusters: Setting the record straight on public employees

Source: NYSUT United

Over the last several months, commentators, media outlets and politicians have been on a tear, ripping public service union employees — including NYSUT members — and blaming them for the fiscal crisis many states are facing, and yes, even for creating the Great Recession. (Hello? Remember the real estate bubble?) We set the record straight on some of the more outrageous claims.

MYTH

The average public service employee makes far more than a private sector employee. Some governors are using this statement to drive a wedge between private and public workers and put an end to collective bargaining.

TRUTH

According to a new analysis by the Economic Policy Institute, state and local public employees are compensated, on average, 3.75 percent less than workers in the private sector.

The study factored in education, experience, hours of work, organizational size, gender, race, ethnicity and disability. It found that, compared to private sector workers, state government employees are under-compensated by 7.55 percent, and local government employees are under-compensated by 1.84 percent. The study also found that the benefits state and local government workers receive do not offset the lower wages they are paid.

The EPI is an independent, nonprofit, nonpartisan think tank that researches the impact of economic trends and policies on working people. To learn more, visit www.epi.org.

MYTH

Bargaining rights for public employees are the reason state deficits have exploded.

TRUTH

If you haven't read the column "The Shameful Attack on Public Employees" by former U.S. Labor Secretary, author and professor of public policy Robert Reich, now is the time. We've posted it on http://blogs.nysut.org/blog/2011/01/07/when-it-comes-to-sacrifice-why-insist-the-rich-sacrifice-even-less/. Reich takes this myth head-on: "In fact there's no relationship between those states whose employees have bargaining rights and states with big deficits. Some states that deny their employees bargaining rights — Nevada, North Carolina and Arizona, for example — are running giant deficits of more than 30 percent of spending. Many that give employees bargaining rights — Massachusetts, New Mexico and Montana — have small deficits of less than 10 percent. Public employees should have the right to bargain for better wages and working conditions, just like all employees do."

It's curious, he writes, that when it comes to sacrifice, railings by Republicans don't include the richest people in America. "To the contrary, they insist the rich should sacrifice even less, enjoying even larger tax cuts that expand public-sector deficits. That means fewer services, and more pressure on public employee wages and benefits. It's only the average workers — both in the public and private sectors — who are being called on to sacrifice."

MYTH

Public employee pensions are bankrupting state budgets.

TRUTH

AFSCME, one of AFT's and NEA's national labor allies, represents more than 1 million public employees. An AFSCME December fact sheet clearly makes the case for publicly funded pensions.

"State and local government pensions are, for the most part, well managed and not the source of budget problems for most governments. In 2008, state and local government pension expense amounted to just 3.8 percent of all (non-capital) spending. Contributions are expected to increase in the future to cover for investment losses and many public employers' failures to adequately contribute in the past. However, the increase in contribution rates will result in pension costs, in aggregate, approximating a still-manageable 5 percent of state and local government spending by 2014 and beyond."

The National Association of State Retirement Administrators said public pensions have exceeded the expected rate of investment return by 1.5 percent for a 25-year period beginning in 1985.