A major point of political contention these days is public worker pay. Those on the right, interested in smaller and more cost-effective government, believe public workers are overpaid. Those on the left, anxious to protect one of the last bastions of organized labor from which a large junk of their monetary political support flows, think public workers aren’t paid enough.
So who is right? We can point to data showing that government workers, on average, get paid more than their private sector counterparts. But that data isn’t necessarily a conclusive measure in that it’s often hard to compare government jobs to private sector jobs.
So how about comparing private sector pay to public sector pay for the exact same worker? Well, according to research from the American Enterprise Institute, people who go to work for the government (even as teachers) tend to get a significant pay bump. Government workers who head into the private sector tend take a pay cut.
According to the SIPP data, the average federal worker shifting to a private job actually accepts a small salary reduction of around 3 percent. Similarly, private sector workers who move to federal jobs don’t take a pay cut. They get a first-year raise averaging 9 percent, well above the raise other workers get when they switch jobs within the private sector. …
Nationwide, non-teachers who move into teaching receive an average raise of around 8 percent, according to SIPP data, while teachers who leave the profession take an average salary cut of around 3 percent. Similarly, three recent state-level studies (in Florida, Missouri and Georgia) using administrative records found no average wage increase for ex-teachers.
One criticism of these numbers that could be valid is the idea that good workers tend to get government jobs, and bad workers tend to leave government jobs.
I’m not sure that passes the smell test, but even setting that caveat aside, this data is compelling.
We’re overpaying government workers.