In recent years, the debate concerning the status of public sector compensation has grown at all levels of government. At the state and local levels, this debate has largely bypassed the issue of pay and centered on jurisdictions' ability to maintain traditional defined-benefit retirement systems in light of declining tax revenues. At the federal level, the primary focus has been the extent to which federal employee pay is comparable to private sector pay, and much of this discussion is driven by the requirement in the Federal Employees Pay Comparability Act of 1990 for an annual comparison of federal employee pay with the private sector. Further, this debate has captured broader questions surrounding proper goals for federal pay comparability policy.
Grounded in research and practice, conventional wisdom has held that the ability of an employer to offer competitive pay rates directly affects a number of critical human resource management metrics, from employee retention to job performance. However, while most researchers and practitioners would agree on the broad influence of competitive pay, there is considerable disagreement over proper approaches for determining and setting competitive pay levels....
]]>From the summary:
...GS employees are eligible to receive three types of pay increases and monetary awards that are linked to individual performance appraisals: within-grade increases, ratings-based cash awards, and quality step increases. Within-grade increases are the least strongly linked to performance, ratings-based cash awards are more strongly linked to performance depending on the rating system the agency uses, and quality step increases are also more strongly linked to performance.
Findings of selected pay and total compensation (pay and benefit) comparison studies varied due to different approaches, methods, and data. Regarding their pay analysis, the studies' conclusions varied on which sector had the higher pay and the size of pay disparities. However, the overall pay disparity number does not tell the whole story; each of the studies that examined whether differences in pay varied among categories of workers, such as highly or less educated workers or workers in different occupations, found such variations. Three approaches were used to compare pay:
- human capital approach (3 studies)--compares pay for individuals with various personal attributes (e.g., education, experience) and other attributes (e.g., occupation, firm size);
- job-to-job approach (2 studies)--compares pay for similar jobs of various types based on job-related attributes such as occupation, does not take into account the personal attributes of the workers currently filling them; and
- trend analysis approach (1 study)--illustrates broad trends in pay over time without controlling for attributes of the workers or jobs.
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Highlights
As I watched NASA scientists erupt into cheers at the successful landing of the Curiosity rover on the surface of Mars this summer, several questions came to my mind: How do you compensate someone whose job is to reach for the stars or eradicate a disease from this planet? What price do you put on protecting our borders or halting an outbreak of a food-borne illness?... As a longtime member of the Federal Salary Council, I have spent years examining the issue of federal pay, federal pay studies, and fair compensation systems. Given the great diversity in the jobs performed by employees and the fact that taxpayer dollars are at stake, the system for setting appropriate compensation must be fair, credible, and transparent, and it must attract and keep highly skilled workers. That is why the current federal pay system aims to find a balance between offering competitive wages and benefits, a secure retirement, and a satisfying work environment.
Still, some critics claim that federal employees are overpaid and offer very carefully selected data, artfully presented, to make a seemingly convincing case. In the end, however, those methodologies are flawed, and using them could lead to bad policy decisions....
]]>Recent empirical evidence strongly suggests that, on average, combined wages and benefits for public sector workers now outstrip compensation for comparable private sector workers. The most obvious implication of this imbalance is that public money is being used inefficiently. The compensation disparity poses an even greater problem for public administrators, however, who risk losing legitimacy in the eyes of voters and taxpayers. People want to know that government employment is truly public service--not a gateway to special privileges.
Elected officials and other policy makers need to get compensation right, and the first step is measuring it accurately. Here we describe strategies that economists have used to compare public and private compensation....
]]>From the abstract:
The 2012/13 edition looks at the macroeconomic effects of wages, and in particular at how current trends are linked to equitable growth. The gap between wage growth and labour productivity growth is widening, the difference between the top and bottom earners is increasing, and the labour income share is declining.
These worrying changes affect the key components of aggregate demand - particularly consumption, investment and net exports - that are necessary for recovery and growth. The report looks at the reasons for these trends, which range from the increasing financial and trade globalization to advances in technology and the decline in union density.
The report calls for internal and external "rebalancing" to achieve more socially and economically sustainable outcomes within and across countries, proposing policy actions beyond labour markets and national borders.
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Key Findings
Analysis
This report provides basic information on congressional salaries and allowances.
First, the report briefly summarizes the current salary of Members of Congress, limits on their outside earned income and honoraria, available life and health insurance, and retirement benefits.
Second, the report provides information on allowances available to Representatives and Senators to support them in their official and representational duties. These allowances cover official office expenses, including staff, mail, travel between a Member's district or state and Washington, DC, and other goods and services.
Third, the report lists the salaries of Members, House and Senate officers and officials, and salary limits for committee staff.
]]>The U.S. Congress Joint Economic Committee released the eleventh installment of its "Understanding the Economy: State-by-State Snapshots" 2012 series, which provides easy access to the major economic indicators in all 50 states and the District of Columbia in the areas of jobs, unemployment, personal earnings and housing.
Key economic statistics for each state include:
• Jobs created or lost since the start of the recession;
• Jobs saved or created by the Recovery Act;
• Unemployment rates;
• Per capita earnings; and,
• The condition of the housing sector.
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Executive Summary
From the summary:
Domestic workers play an increasingly significant role in the U.S. economy. Yet the labor of domestic workers is invisible and unregulated. These factors combine to make domestic workers especially vulnerable to exploitation and abuse on the job....
...Home Economics: The Invisible and Unregulated World of Domestic Work presents the results of the first national survey of domestic workers in the US. It breaks new ground by providing an empirically based and representative picture of domestic employment in 21st century America. We asked a sample of domestic workers a standardized set of questions focusing in four aspects of the industry:
• pay rates, benefits, and their impact on the lives of workers and their families;
• employment arrangements and employers' compliance with employment agreements;
• workplace conditions, on-the-job injuries, and access to health care;
• abuse at work and the ability to remedy substandard conditions.
We surveyed 2,086 nannies, caregivers, and housecleaners in 14 metropolitan areas. The survey was conducted in nine languages. Domestic workers from 71 countries were interviewed. The study employed a participatory methodology in which 190 domestic workers and organizers from 34 community organizations collaborated in survey design, the fielding of the survey, and the preliminary analysis of the data.
See also:
- Key Findings
- Recommendations
- Explore the Data
From the editor's page:
...The 2011 legislatures acted in the midst of some of the most difficult economic conditions for state and local governments in many years. Politicians enlisted the support of taxpaying opponents of government spending, arguing that public workers are overpaid, underworked, and far too secure in their employment. Critics, however, argued that Republican officials took advantage of economic conditions to enact restrictions for political reasons, including a desire to weaken unions that have been strong supporters of the Democratic Party. The articles in this issue, written by speakers at a symposium entitled Public Employment in Times of Crisis, sponsored by the Labor Law Group, the University of Richmond School of Law and Center for Leadership in Education, and the American Constitution Society, shed light on the intensive debate about the legal and policy issues relating to public employment....
Articles include:
• The Legislative Upheaval in Public-Sector Labor Law: A Search for Common Elements
By Martin H. Malin
• The Constitutional Dimension of Unilateral Change in Public-Sector Collective Bargaining
By Stephen F. Befort
• Public Pension Benefits Under Siege: Does State Law Facilitate or Block Recent Efforts to Cut the Pension Benefits of Public Servants?
By Eric M. Madiar
• Discipline and Discharge of Public-Sector Employees: An Empirical Study of Arbitration Awards
By Laura J. Cooper
• The Impact of Employee Performance in Adverse Actions in the Federal Sector
By Susan Tsui Grundmann
• The Effect of Pension Accounting Rules on Public-Private Pay Comparisons
By Andrew G. Biggs and Jason Richwine
• State and Local Public Employees: Are They Overcompensated?
By Jeffrey H. Keefe
• Evolution of Public-Sector Retirement Plans: Crisis, Challenges, and Change
By Robert Clark
• The Sheathed Sword: Public-Sector Union Efficacy in Non-Bargaining States
By Ann C. Hodges and William Warwick
• The Wisconsin Public-Sector Labor Dispute of 2011
By Paul M. Secunda
• Untested Assumptions in NLRB Proceedings
By Phoebe Taurick
Related:
UR School of Law - Public Sector Employment in Times of Crisis Conference - Panel 1a: Public Employee Compensation - Public Sector Pensions in Crisis
- UR School of Law - Public Sector Employment in Times of Crisis Conference - Panel 1b: Public Employee Compensation : Excessive or Inadequate?
- UR School of Law - Public Sector Employment in Times of Crisis Conference - Panel 2: Collective Bargaining, Existing Frameworks and Recent Changes
- UR School of Law - Public Sector Employment in Times of Crisis Conference - Panel 3: The Constitutional Framework for Public Employment
- UR School of Law - Public Sector Employment in Times of Crisis Conference - Panel 4: Education Reform: The Role of Teachers
- UR School of Law - Public Sector Employment in Times of Crisis Conference - Panel 5: Public Employee Job Security and Termination
From the abstract:
In contrast to the general biases of orthodox economists, the jobs crisis in America is not inevitable or natural--and more important, does not contribute to more economic efficiency through lower wages or more productivity. It is the result of deliberate political policy choices the nation has made at least since the early 1980s, when productivity was rising on a secular basis at a slow rate. Also, the policy choices were made before the rise of very low-wage emerging markets like China's. In sum, there has been a low-wage, high-unemployment policy regime in the rich world, and especially in the United States, for a generation.
This report presents earnings data from the Current Population Survey (CPS), a national monthly survey of approximately 60,000 households conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics (BLS). Information on earnings is collected from one-fourth of the CPS sample each month. Readers should note that the comparisons of earnings in this report are on a broad level and do not control for many factors that can be significant in explaining earnings differences. For a detailed description of the source of the data and an explanation of the concepts and definitions used, see the accompanying technical note.
]]>At the August 30th hearing of the Legislative Subcommittee on Employee Relations, Minnesota Management & Budget Commissioner Jim Schowalter discussed two recent reports about state government staffing levels in Minnesota. He began with, "The workforce is changing. The demographic changes that we are experiencing are real and profound, and the state as an employer cannot assume the workforce it has had in the past, the quality workforce and the ability to affect the policies it wishes, we cannot assume that the capacity will be there in the future. It has to consider very strongly how it recruits, retains, and develops employees going into the future, and that this is a key issue for the state going forward." The reports he discussed:
• Full-Time Equivalent Executive Branch Employees . Minnesota Management & Budget, 2012. (Mandated by: 2011 Minn. Laws 1st Spl. Sess. Chap. 10 Art. 3 Sec. 46)
• State of Minnesota Workforce Report . Minnesota Management & Budget, 2011.
Additional articles and databases give information on state and local government employment and pay.
• " Debating Public vs. Private: While the Public Sector is the Second-Largest Employer in Minnesota, State and Local Government Employment as a Percentage of All Jobs Here Has Been Shrinking Since 1976," Minnesota Economic Trends, December 2011.
• " Good-bye Government Jobs," State Legislatures, July/August 2011. The article includes links to studies that conclude public sector workers are overpaid and those that say public sector workers are underpaid.
• Minnesota Local Government Salary and Benefits Survey . League of Minnesota Cities. (The Library pays for online access to this database for legislators and legislative staff.)
• Minnesota Occupation Employment Statistics Data. This database, maintained by the Minnesota Department of Employment and Economic Development, includes private sector data and provides employment and salary statistics for broad occupational categories in Minnesota.
• State Government Employment and Pay Data. Governing Magazine compiled 2010 and 2011 employment and pay data by job type for all state governments.
From the press release:
The gaps between the incomes of the richest households and low- and middle-income households are wide and growing in most states, according to a major new report from the Center on Budget and Policy Priorities and the Economic Policy Institute that examines inequality at the state level. Across all states, the average income of the richest fifth of households was eight times that of the poorest fifth as of the late 2000s. New Mexico, Arizona, California, Georgia, New York, Louisiana, Texas, Massachusetts, Illinois, and Mississippi face the largest gaps....The long-standing trend of growing income inequality continued between the late 1990s and the mid-2000s. Incomes fell by close to 6 percent among the bottom fifth of households, on average, while rising by 8.6 percent among the top fifth, during this period. Incomes grew even faster -- 14 percent -- among the top 5 percent of households. For the middle fifth of households, incomes grew by just 1.2 percent...
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Summary
From the blog entry:
The annual PHI analysis of wage trends for personal care aides (PCAs) -- the nation's fastest-growing occupation -- once again shows low and stagnant wages for these critical workers who provide supports and services to elders and individuals with disabilities.
In 2011, the national median wage for PCAs ($9.49) increased by less than one percent from the previous year. In 16 states, wages actually declined. By contrast, the average wage for all jobs in the economy increased from $16.27 to $16.57 over that time period.
Of all states, 33 reported average hourly wages for PCAs that fell below 200 percent of the Federal Poverty Level, according to the analysis reported in the most recent PHI State Chart Book on Wages for Personal Care Aides (pdf).
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