Category Archives: Compensation

Fiscal Consolidation and Public Wages

Source: Juin-jen Chang, Hsieh-Yu Lin, Nora Traum, Shu-Chun Susan Yang, International Monetary Fund (IMF), IMF Working Paper No. 19/125, June 2019

From the abstract:
A New Keynesian model with government production, public compensation, and unemployment is fit to U.S. data to study the macroeconomic and fiscal effects of public wage reductions. We find that accounting for the type of government spending is crucial for its macroeconomic implications. Although reductions in public wages and government purchases of goods have similar effects on total output and the fiscal balance, the former can raise private output slightly, in contrast to the substantial contractionary effects of the latter.In addition, the baseline estimation finds that exogenous public wage reductions decrease private wages. Model counterfactuals show that sufficiently rigid nominal private wages can reverse the response of private wages, as the rigidity dampens the labor reallocation effect from the public to private sector that exerts downward pressure on private wages.

Ten Years After: The Development of a University Staff Pay System—Reflections and the Lessons Learned

Source: Steven L. Thomas, Lyn M. McKenzie, Compensation & Benefits Review, OnlineFirst, July 22, 2019
(subscription required)

From the abstract:
This article documents the development and implementation of a new staff pay system for a large, comprehensive, public university. It discusses decisions that were made, alternatives chosen, important process issues and outcomes, as a guide to administrators and human resource staff into what can be expected as new job structures, pay and performance management systems are developed. The authors review program successes and remaining challenges from the perspective of 10 years after system implementation.

The Political Theory of Universal Basic Income

Source: Juliana Uhuru Bidadanure, Annual Review of Political Science, Vol. 22, 2019
(subscription required)

From the abstract:
Universal basic income (UBI) is a radical policy proposal of a monthly cash grant given to all members of a community without means test, regardless of personal desert, with no strings attached, and, under most proposals, at a sufficiently high level to enable a life free from economic insecurity. Once a utopian proposal, the policy is now widely discussed and piloted throughout the world. Among the various objections to the proposal, one concerns its moral adequacy: Isn’t it fundamentally unjust to give cash to all indiscriminately rather than to those who need it and deserve it? This article reviews the variety of strategies deployed by political theorists to posit that the proposal is in fact justified, or even required, by social justice. The review focuses mainly on the contemporary normative debate on UBI—roughly dating back to Philippe Van Parijs’s influential work in the 1990s—and is centered on the ideals of freedom and equality.

See Where Teachers Got Pay Raises This Year – Protests across the country swayed governors to push for salary bumps

Source: Daarel Burnette II & Madeline Will, Education Week, Vol. 38 Issue 36, Published in Print: June 19, 2019

More than a year after teachers across the country began walking out of their classrooms en masse to demand higher salaries, at least 15 states have given their teachers a raise.

And lawmakers in several more states are putting the final touches on plans to raise teacher salaries, according to an Education Week analysis…..

….Here’s what you need to know about each state’s plan (as of June 17) to raise teacher pay. (The average teacher salary for each state reflects the National Education Association’s estimate for the 2018-19 school year, which would not include these raises.)

Click a state in the dropdown to jump to that section: ….

Executive Paywatch 2019

Source: AFL-CIO, 2019

In 2018, CEOs of S&P 500 companies received, on average, $14.5 million in total compensation. The average S&P 500 company CEO-to-worker pay ratio was 287 to 1. The imbalance in our economy between the pay of CEOs and working people continues to be a problem.

Highest-Paid CEOs
CEO pay continues to outpace the pay of working people. In the past 10 years, CEO pay at S&P 500 companies increased more than $500,000 a year to an average of $14.5 million in 2018. Meanwhile, the average production and nonsupervisory worker saw a wage increase of $785 a year, earning on average just $39,888 in 2018.

Company Pay Ratios
Publicly traded companies are required to disclose the pay ratio between their chief executive and median employee. Company pay ratio data is important. It shows which companies are investing in their workforce to create high-wage jobs. The table below shows how companies pay their CEOs relative to their workforce.

Related:
CEOs made 287 times more money last year than their workers did
Source: Alexia Fernández Campbell, Vox, June 26, 2019

Companies have finally started reporting CEO-worker pay ratios. Now we know why they fought so hard to avoid it.

Unsurprisingly, the gap is obscene. The average chief executive of an S&P 500 company earned 287 times more than their median employee last year, according to an analysis of the new federal data released Tuesday by the AFL-CIO labor federation. America’s CEOs earned a staggering $14.5 million in 2018, on average, compared to the average $39,888 that rank-and-file workers made. And CEOs got a $500,000 bump compared to the previous year, while the average US worker barely got more than $1,000. ….

…. But there is another Reagan-era policy that has contributed to skyrocketing CEO pay: stock buybacks. Corporate executives have spent trillions of dollars buying back their company’s own stocks since the 1980s to temporarily boost its value. …. Over the past 15 years or so, firms have spent an estimated 94 percent of corporate profits on buybacks and dividends. That means companies are barely investing any of their profits in their companies, or workers. Which is why we end up with charts that look like this. ….

Exposing Wage Theft Without Fear: States Must Protect Workers from Retaliation

Source: Laura Huizar, National Employment Law Project, June 2019

From the press release:
Social justice movements, such as the Fight for $15, #MeToo, and striking Uber drivers, rely on workers to come forward to assert their rights—but workers who dare challenge an employer’s policies or misconduct know that they will almost certainly face retaliation. Even highly-paid Google workers have been forced to protest retaliation following a mass walkout criticizing Google’s handling of sexual harassment. A new NELP survey of laws in all 50 states and the District of Columbia shows, however, that state laws overwhelmingly fail to provide workers with essential retaliation protections.

In Exposing Wage Theft Without Fear: States Must Protect Workers from Retaliation, NELP offers a first-of-its-kind analysis focusing on how state laws protect—or fail to protect—workers when they challenge wage theft by lodging complaints with employers or government agencies, filing lawsuits, or engaging in public actions, for example…..

Staff Pay Levels for Selected Positions in Senators’ Offices, FY2001-FY2018

Source: R. Eric Petersen, Raymond T. Williams, Congressional Research Service, CRS Report, R44324, June 11, 2019

Levels of pay for congressional staff are a source of recurring questions among Members of Congress, congressional staff, and the public. There may be interest in congressional pay data from multiple perspectives, including assessment of the costs of congressional operations, guidance in setting pay levels for staff in Member offices, or comparison of congressional staff pay levels with those of other federal government pay systems.

This report provides pay data for 16 staff position titles that are typically found in Senators’ offices. The positions include the following: Administrative Director, Casework Supervisor, Caseworker, Chief of Staff, Communications Director, Constituent Services Representative, Counsel, Executive Assistant, Field Representative, Legislative Assistant, Legislative Correspondent, Legislative Director, Press Secretary, Scheduler, Staff Assistant, and State Director.The following table provides the change in median pay levels for these positions, in constant 2019 dollars between FY2017 and FY2018

Staff Pay Levels for Selected Positions in House Member Offices, 2001-2018

Source: R. Eric Petersen, Raymond T. Williams, Congressional Research Service, CRS Report, R44323, June 11, 2019

Levels of pay for congressional staff are a source of recurring questions among Members of Congress, congressional staff, and the public.There may be interest in congressional pay data from multiple perspectives, including assessment of the costs of congressional operations, guidance in setting pay levels for staff in Member offices, or comparison of congressional staff pay levels with those of other federal government pay systems.

This report provides pay data for 15 staff position titles that are typically used in House Members’ offices. The positions include the following: Caseworker, Chief of Staff, Communications Director, Constituent Services Representative, Counsel, District Director, Executive Assistant, Field Representative, Legislative Assistant, Legislative Correspondent, Legislative Director, Office Manager, Press Secretary, Scheduler, and Staff Assistant. The following table provides the change in median pay levels for these positions in constant 2019 dollars,between 2017 and 2018…..

‘Can’t pay their bills with love’: In many teaching jobs, teachers’ salaries can’t cover rent

Source: Erin Richards and Matt Wynn, USA TODAY, June 5, 2019

New teachers can’t afford median rent almost anywhere. Our city-by-city analysis validates a theme in teacher strikes. But that’s not the full story.

Related:
Low relative pay and high incidence of moonlighting play a role in the teacher shortage, particularly in high-poverty schools
The third report in “The Perfect Storm in the Teacher Labor Market” series
Source: Emma García and Elaine Weiss, Economic Policy Institute, May 9, 2019

What this series finds:
The teacher shortage is real, large and growing, and worse than we thought. When indicators of teacher quality (certification, relevant training, experience, etc.) are taken into account, the shortage is even more acute than currently estimated, with high-poverty schools suffering the most from the shortage of credentialed teachers.

What this report finds:
The perceived financial hardships in teaching are real. This report adds to the compelling evidence in Sylvia Allegretto and Larry Mishel’s recent research showing that teachers are paid a lot less than other comparable college graduates. After accounting for education, experience, and other factors known to affect earnings, teachers’ weekly wages in 2018 were 21.4 percent lower than their nonteaching peers. In 1996 that weekly wage penalty was 6.3 percent. Our report identifies other indicators that teacher pay is too low and declining. For example, in the 2015–2016 school year, 59.0 percent of teachers took on additional paid work either in the school system or outside of it—up from 55.6 percent in the 2011–2012 school year. A majority of moonlighters (44.1 percent) were taking on second jobs within the school system, such as coaching, student activity sponsorship, mentoring other teachers, or teaching evening classes; 18.2 percent were working outside of the school system; and 5.7 percent were receiving compensation based on student performance. For these teachers, moonlighting makes up a substantial 7.0 percent share of their combined base salary and extra income. Financial stress is greater for teachers in high-poverty schools. Relative to teachers in low-poverty schools, teachers in high-poverty schools are paid less ($53,300 vs. $58,900), receive a smaller amount from moonlighting ($4,000 vs. $4,300), and the moonlighting that they do is less likely to involve paid extracurricular or additional activities for the school system that generate extra pay but also help them grow professionally as teachers (data are for 2015–2016). Data suggest a relationship between low salaries and quitting. Teachers who ended up quitting before the 2012–2013 school year had lower base salaries ($50,800 vs. $53,300) and were more likely to be supplementing their base pay with work outside the school system in the year before they quit (18.4 percent vs. 16.3 percent).