Unions can reduce the public-sector pay gap: Collective bargaining rights and local government workers 

First, I am not anti- union. I worked with several different unions and negotiated contracts for many years. I have great respect for responsible union leaders.

HOWEVER, the following report and point of view is beyond misleading because:

  • Public employee compensation and jobs – teachers, firefighters, police, etc. cannot be compared with the private sector, especially based on education attainment.
  • Local officials and politicians have the power to raise compensation only constrained by the ability to increase tax revenue – unions can’t change that.
  • Most public employees have a total compensation package comparable to the private sector
  • Generally, public employees have greater job security.
  • Public employees are not subject to strong performance measures, or risks associated with transfers, acquisitions or mergers.

Closing any pay gap simply means higher local income, property or other taxes. Many states already making generous promises for pensions and healthcare have failed to fund such promises and/or have cut back on those promises.

The EPI like most left leaning groups overlooks the other side of an equation.

What this report finds: States where teachers and school staff, bus drivers, firefighters, police, and other local government workers have stronger collective bargaining rights have smaller gaps between these workers’ pay and the pay of private-sector workers with similar educational attainment, age, state of residence, and hours worked.

States like Colorado and Virginia, where bargaining rights have been weak or nonexistent, have lower union membership and larger public-sector pay gaps than states with strong bargaining rights.

Why it matters: Closing the public-sector pay gap especially helps Black workers and women, who are disproportionately represented in local government jobs.

Addressing the public-sector pay gap is also critical for local governments facing acute, growing staffing shortages. Finally, unions help reduce inequality, promote social mobility, and advocate for better public services.

What can be done about it: Colorado is considering legislation to extend bargaining rights to local government employees, after recently extending these rights to state employees. Virginia recently took the small step of allowing employers to voluntarily bargain with unions representing local government workers. Colorado and Virginia are among the states that are moving in the right direction. Other states that have restricted collective bargaining rights should act to expand them.

Source: Unions can reduce the public-sector pay gap: Collective bargaining rights and local government workers | Economic Policy Institute

6 comments

  1. aei.org/wp-content/uploads/2014/04/-biggs-overpaid-or-underpaid-a-statebystate-ranking-of-public-employee-compensation_112536583046.pdf?x91208

    Interesting paper (somewhat dated) see Table 4, p 60.

    The –average– public worker, according to Biggs, is slightly “overcompensated”.

    1. The overcompensation is primarily in the lowest level jobs. Redistribution? Is government work more egalitarian/less “unequal” than the private sector?

    2. Most of the public sector advantage is in pensions and benefits. The average private sector spit is 70/30; pay vs. benefits. Public sector is 62/38.

    3. Look at it this way, much of the advantage in pensions and benefits (and retiree healthcare) accrues to the private sector workers. Spouses and children of public workers, directly or indirectly.*

    4. The biggest (average) pay advantage Biggs calculates goes to seven states: New Jersey, California, Rhode Island, Illinois, New York, Pennsylvania, Connecticut.

    Correlation is not (necessarily) causation. Is it because they are union states? Blue states? Or may be just urban vs rural populations?

    *Biggs published a companion study stating that if Connecticut reduced (average) public compensation to private sector level, the state could save(?) $3.7 billion per year.

    He did not state that, as per his own studies, nearly all that savings must necessarily come from the lowest paid state workers, also necessarily in the form of reduced benefits and healthcare, and, necessarily, the savings would have to be offset by increased healthcare and welfare, not just to state employees, but also to their, usually, private sector spouses and children.

    Don’t be like Biggs.

    yankeeinstitute.org/2020/09/30/study-finds-connecticut-government-employees-earn-28-percent-more-than-private-sector-costing-taxpayers-3-7-billion/

    Liked by 1 person

  2. The EPI is a leftist think tank that skews studies toward their bias. As previously stated, there are many benefits to government work that equals or exceeds private compensation. The idea of using education as a stand alone reason for higher compensation is bogus. Some of the most pitiful performers I ever worked with had college degrees. Some of the better workers had only high school or a little more training. The idea of women and black workers being underpaid in relation to others is bogus in government work. As for teaching, a degree in education is well known as the least strenuous of all, well maybe grievance studies is down there as well. A person going into education knows the pay is what it is. Why continually cry for more later on. I know a little of what I’m saying since I have a degree in education and have several teachers in the family.
    Union representation is used effectively to prop up inferior workers in the public sector and negotiate for more.

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    1. “As for teaching, a degree in education is well known as the least strenuous of all,…”

      But not necessarily a career in education. “Nearly 50 percent of new teachers leave the profession within their first five years.” (That’s almost certainly an overstatement, I’ve seen as low as 17 percent. Probably somewhere in the middle.) Do they leave because the work is more strenuous? Because they are just not good at it? (I’ve had great teachers with average intelligence, and very intelligent teachers with no ability to impart knowledge (or good learning habits) to another.

      Or do teachers leave because they find that, with that same degree, they can earn more in sales or management or research, etc.?

      “A person going into education knows the pay is what it is.” Or, what it was. Teacher, and other public worker salaries are just not keeping up, and benefits are being reduced. Unions are playing defense, and not very well.

      For whatever reason, Biggs (again, sorry, he’s a big name in the field) calculates* that, on average, nationwide, state and local workers earn about 10 percent more than –equivalent– private sector workers. Federal workers, on average earn 17 percent more than private sector workers. Unions? Federal employees can collectively bargain with respect to personnel practices only. They cannot bargain for wages or benefits. And yet..

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  3. See: https://www.wsj.com/articles/union-public-sector-employee-collective-bargaining-political-donations-democrats-11650319165?mod=Searchresults_pos1&page=1

    When Unions Sit on Both Sides of the Table: Collective bargaining for the public sector was a big mistake.
    April 19, 2022, Conan M. Ward, Princeton, NJ “… In business, executives and board members are required to recuse themselves from decisions in which they have a financial interest that potentially conflicts with shareholder interests. … we have a vicious circle of union election funding followed by their beneficiaries cutting the unions sweetheart deals across the table. … If the pandemic has taught us anything, it is to highlight that public-sector unions are indeed unelected policy makers, …”

    A letter to the editor in response to the following:

    https://www.wsj.com/articles/high-cost-tax-hike-budget-janus-wisconsin-connecticut-public-unions-wages-raises-11649189154?mod=article_inline

    Connecticut Hits Its Taxpayers With a Huge Payoff to Unions: They’re about to discover the high cost of Gov. Ned Lamont’s determination not to be Wisconsin.
    April 5, 2022 Carol Platt Liebau “… Gov. Ned Lamont said in 2019 he wanted “an anti-Wisconsin moment,” a jab at Gov. Scott Walker’s sweeping fiscal reforms of 2011. Instead, Mr. Lamont said, he wanted to “show that collective bargaining works.” When unions representing most of the state workforce wrapped up their first round of contract talks with Mr. Lamont last month, the anti-Wisconsin moment arrived. Connecticut taxpayers are getting a costly reminder of who the process “works” for. … The contrast between Connecticut’s public and private sectors couldn’t be starker. As 1 in 6 private jobs disappeared in spring 2020, state employees were contractually shielded from layoffs. That summer, with unemployment still above 10% and state finances in tatters, automatic 3.5% raises negotiated by Mr. Lamont’s predecessor kicked in. … When Mr. Walker reversed decades of union privileges in 2011, he helped erase a multibillion-dollar deficit and allowed Madison to deliver substantial tax relief. Connecticut taxpayers have good reason to wonder where racing in the opposite direction will take them. …”

    Check out Indiana, for comparison: Right to work does not mean “anti-union”. A “right-to-work” state is a state that has enacted legislation that guarantees that no individual can be forced as a condition of employment to join or pay dues or fees to a labor union. States have the right to enact these laws under Section 14(b) of the National Labor Relations Act (NLRA).

    https://www.wsj.com/articles/indiana-right-to-work-state-private-employment-labor-unions-workers-unionized-manufacturing-construction-utility-information-sector-unemployment-11649968126?mod=Searchresults_pos4&page=1

    Welcome to Indiana, a Right-to-Work State: Since the law was enacted in 2012, the state has gained jobs from nearby union-friendly Ohio.
    Todd Nesbit and Michael LaFaive, April 14, 2022 “… states that have enacted these laws since 2000 have a 20.7% higher manufacturing share than they otherwise would without a right-to-work law. …”

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    1. Several years ago NJ unions were in negotiations with the state and were holding a rally in Trenton. The then Governor Corzine stood in front of the crowd and shouted “we will fight for a fair contract” Funny, I thought he was supposed to represent the taxpayers🤑

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  4. I was in union for 34 years so I am not anti union.
    But this study lost all creditability while trying to make their case for equal private and public compensation when the study threw race and gender into the equation. The one thing unions are good at is every worker in a classification get paid the same even if they are the laziest in the company. To claim that public unions don’t pay as well because the races and gender of the union is BS.
    Maybe the wages match the labor supply pool or the make up of population? I wonder if police departments are still getting hundreds of applications per opening after all the defund the police movements. NJ State Police dropped its college degree requirement at the end of 2020 so the next step will be to raise wages, just like the private sector has to do to get qualified workers.

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