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8/24/2010
When public sector employees are public safety employees

In a story for the upcoming issue of National Review, Dan Foster captures the cops and the robbers – and the essence of the public sector employee cost debate. It’s a long read (1780 words) that’s worth spending time with – challenging taxpayers – citizens of communities everywhere – to “take care that public-safety workers are not allowed to hide behind the badge. That they are our heroes does not excuse them from taking part in the difficult choices that must be made to restore solvency to state and local governments.”

The billboards warned that unlike Bay City’s finest, city hall couldn’t prevent residents from being “Beaten,” “Shot,” “Stabbed,” or “Robbed,” and confronted passers-by with an image of a masked man pointing an automatic pistol at them.

.... Everywhere, cash-strapped councils and legislatures in the second year of post-crisis America are struggling to bring outlays in line with a shrunken and stagnant revenue base after decades of metastasizing growth in public-sector labor costs. And they are being forced to take a hard look at their salary and pension obligations to police and firefighters — obligations that are both prime drivers of structural deficits and as close a thing as there is in local governance to a sacred cow.

…. Throughout these crises, the unions have succeeded in casting the choice as one between public safety and layoffs, avoiding reductions in, or even talk of, their extravagant compensation packages.

According to the Bureau of Economic Analysis, in 2008, state and local governments spent $1.1 trillion on public-employee compensation, a number that accounts for fully one-half of their total spending. State and local employees earn, hour for hour, 34 percent more in wages than do workers in the private sector, and enjoy far more generous health-insurance, sick-leave, and pension benefits.

…. As with most public-sector workers, a major — and opaque — piece of emergency-services compensation comes in the form of lifelong pensions.

“Public-safety workers tend to receive the most generous public-employee pensions,” says Josh Barro, a Manhattan Institute fellow and expert on state and local finance. “They are based on a significantly shorter career — it is not atypical to see police and fire pensions based on 20 years of service — and they also tend to be more generous as a percentage of salary.”

How did police and fire unions score such a sweet deal? Part of it is institutional. Since public-safety unions can, by law, virtually never strike, nearly all of them take advantage of their right to force “interest arbitration,” wherein an ostensibly neutral third party settles contract disputes between labor and government. As such arrangements became commonplace through the 20th century, police and fire unions began to see their compensation rise faster than that of non-uniformed public employees. The availability of legally binding arbitration meant that unions had less incentive to deal directly with their government employers, while elected officials facing angry voters could blame expensive settlements on the imposition of the arbitrators.

…. But beyond institutions, political — and even cultural — norms play a role in the special status of police and fire compensation. For one thing, cops and firemen are swing voters.

…. And if public-safety workers are split in their political allegiances, the elected class is unified in its deference to men and women in uniform, especially after a decade whose defining acts of heroism were performed by cops and firemen from New York and New Jersey. Politicians are loath to be seen as trying to nickel-and-dime our heroes.

…. In solving the immediate crisis posed by the unions’ intransigence, state and local governments facing structural deficits must be allowed to lower labor costs without endangering public safety — by reducing compensation across the board instead of laying off staff. In most jurisdictions, governments can’t renegotiate the terms of existing union contracts, even in fiscal emergencies. This must change. Better yet, states should follow the lead of Virginia and ban collective bargaining by public employees.

We must take care that public-safety workers are not allowed to hide behind the badge. That they are our heroes does not excuse them from taking part in the difficult choices that must be made to restore solvency to state and local governments. If the unions won’t let them, and the elected class won’t make them, then the citizenry must shame them. Somebody must watch the watchmen.

Read the whole thing.

COMMENTS

Jo, I found this interesting article

The State Journal's recent coverage of city of Madison employee compensation policies has revealed a curious case of tunnel vision. The newspaper focused on a narrow sliver of total compensation for a tiny group of employees. It was like an automobile review that fixates on cup holders.

It's fair enough to look at overtime, sick-day policies and other facets of compensation if a newspaper wants to focus on a fraction of Madison's $175 million payroll.

But it's not fair to look at these issues alone and then infer that all public employees are "cashing in." It's even less fair to compare a few benefits and draw conclusions about the difference between public and private employment. This is like comparing cup holders in automobiles with cup holders in powerboats.

A meaningful comparison between public and private pay requires looking at the total compensation package for each type of employment.

Of course, merely comparing average public salaries versus private salaries can be misleading if it fails to account for the unique work done in the public sector. Raw averages also fail to account for the fact that, on the whole, public employees have higher levels of experience and education than private employees.

A more accurate comparison factors in experience and education. This is what the Center for State and Local Government Excellence did in a recent study. The Center found that wages and salaries of public employees are lower than those for private sector employees with comparable work experience and education. Employees of state and local government earn an average of 11 percent and 12 percent less, respectively, than comparable private sector employees, the study found.

It is no surprise that benefits tend to make up a slightly larger share of compensation for public employees. Traditionally, public employees at the bargaining table have given up higher pay in exchange for better benefits.

But even after accounting for the value of benefits, the study found that public employees earn less than private sector counterparts. On average, total compensation is 6.8 percent lower for state employees and 7.4 percent lower for local employees than for comparable private sector employees.

If one national study isn't convincing, how about recent findings from the conservative Wisconsin Taxpayers Alliance? It concluded Wisconsin has 8.2 percent fewer government employees per capita than the national average. Further, salaries for local public employees lagged 4.9 percent below the national average. Salaries and benefits combined were 2.9 percent below the national average for local public employees.

Ultimately, shouldn't the market tell us if things are wildly out of whack? A recent survey of government hiring managers by the Center for State and Local Government Excellence found most are finding it difficult to fill vacancies for highly-skilled positions, even in today's tough economy.

Public employees are not immune to an economic crisis they did not create. They face frozen pay, furloughs and layoffs and are doing more with less as they fill gaps for laid off and retiring colleagues who are not being replaced.

Still, streets need to be repaired and plowed. Schools can't turn away students. Buses need to run. House fires and police calls can't be ignored. If overtime costs for these vital services are deemed excessive, perhaps it indicates that staff cuts have gone too far.

Focusing on one area of employee compensation without considering the entire package doesn't provide a fair or accurate picture. Hardworking public employees who are fighting the tide to maintain quality public services deserve better.

Badger is executive director of AFSCME Council 40, the largest union representing city of Madison employees, though not Metro Transit bus drivers.

joe (Tue Aug 24 08:49:39 2010)

Please all of us greatly appreciate the dedication, at times dangerous, and hard work our public safety employees do for us 24/7.Please realize there are private sector employees performing the same duties ie., EMT,nurse,fireman,polic officer etc.for a whole lot less in their hourly rate,much less in benefits,less vac/sick leave/PTO/holidays,no public pension,no driving govt vehicle to & from home,or the firetruck to Copps for food, etc. etc.All we are saying from a public standpoint and our elected officials hopefully see the light too?
its now time to come back to the real world....with the worst economic downturn since the great depression; today public safety & public employees need to return to the average pay w/benefits of private sector employees
performing the same duties. We can no longer afford the status quo; the bank is broke.

Dave (Tue Aug 24 08:56:42 2010)

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