California’s Government Workers Make TWICE As Much as Private Sector Workers

Earlier today the California Policy Center released a study that provided facts about government compensation. It examined state and local payroll data provided online by the California State Controller and proved that the average pay and benefits for a full-time state/local government employee in 2015 was $121,843.

At the same time, the study found that the average pay and benefits for a full-time private sector worker in California in 2015 was half that much, $62,475.

Moreover, the study found that if the pensions these state/local workers have been promised were being properly funded, their actual pay and benefits in 2015 would have averaged $139,691. And that elevated figure still didn’t take into account the impact of properly pre-funding their supplemental retirement health care, nor did it normalize for their myriad paid days off – typically including 14 paid holidays, 12 “personal days” and 20 or more vacation days as they acquire seniority. And let’s not forget the “9/80” program, common in California government but virtually unheard of in the private sector, where public sector salaried professionals can skip a few lunches and show up a few minutes early or depart a few minutes late each workday, and take 26 additional days a year off with pay because, every two weeks, they worked “nine hour days for nine days, then took the tenth day off.”

If you’re not counting, that adds up to 72 days off per year with pay for a seasoned public sector professional. The study didn’t take that into account.

Similarly, the study had to assume that fully 50% of full time private sector workers in California are getting excellent comprehensive health care coverage 100% paid for by their employer, a 3% employer matching payment to a 401K retirement savings account, along with making employer contributions to Social Security and Medicare (and even that does not occur for the millions of independent contractors working full-time in California). But the study made the 50% assumption just to ensure that the average, $62,475 per year, was not understated.

Finally please note that in the public sector, the study found that the differences between “average” and “median” total compensation are negligible, with the median often actually exceeding the average. Not true in the private sector, where the impact of ultra-wealthy individuals truly skews the average well above the median.

So welcome to Feudal California, where crippling taxes and regulations are destroying the middle class, while a burgeoning dependent class pays no taxes, and hence votes for every tax proposal they see. Welcome to Feudal California, where the super rich support policies designed to create asset bubbles that make them richer, and don’t care about taxes because they’re so rich they can pay them.

It’s not enough to merely point out the fact that government workers make twice as much as ordinary workers in California, and that the gap is widening. The problem is that the unions who represent government workers control policy in California, and those policies are the reason private sector workers can’t get ahead. Every major policy in effect or being contemplated in California is designed to raise the cost-of-living, and while the private sector middle class is crushed, the unionized government workers make twice as much, which is enough to survive.

At the same time, the challenges posed by a high cost-of-living are almost entirely regressive, harming the poor disproportionately. It doesn’t matter to a wealthy person if their gasoline costs $2.50 vs. $4.50 per gallon, or their electricity costs $.04 per KWH vs. $.40 per KWH. It doesn’t matter to them if a home costs $150,000 or $650,000. They’re rich. They can afford it.

So instead of fighting to lower the cost-of-living, California’s wealthy elite makes common cause with government unions, working to create artificial scarcity. This creates asset bubbles that translate into more property tax revenue for governments, more investment returns for the pension funds, and gilds the portfolios of the wealthy. And if anyone objects, they’re “deniers.”

California’s elites – wealthy individuals and their government union allies – have cleverly employed the politics of race, gender, and environmentalism to enthrall millions. California’s citizens, by and large, have become convinced that identity grievances and extreme environmentalism matter more than the fact they are in debt to their eyeballs, living from paycheck to paycheck. In a brilliant inversion of reality, these feudal overlords have actually convinced Californians to attribute the reasons for their poverty to race and gender discrimination, rather than economic policies that have made it nearly impossible for anyone to be upwardly mobile – regardless of their race or gender.

The public sector union leadership that runs California is incorrigible. They have bribed their members, and they have convinced their victims to enthusiastically support a political agenda that itself is the real reason they are victims.

Ed Ring is the vice president of research policy for the California Policy Center.

28 replies
  1. Tough Love
    Tough Love says:

    Ed, Nice article.

    Two thoughts………

    (1) Re the 9/80 workweek for salaried PUBLIC Sector professionals……..

    There are some commentators (S Moderation Douglas comes to mind) that like to point to studies that show that Public Sector PHDs and “professionals” are “compensated” (even after pension and benefits) at a level lower than their Private Sector counterparts. The “numbers” may support than, but the Public Sector 9/80 workweek makes me wonder. While the PUBLIC Sector uses that extra early start hour and extra end of day hour to justify only being at work 9 days every 2 weeks (instead of 10 days), in the private Sector, those extra hours are called voluntary (but “expected” … to get your work done and advance in your career) unpaid overtime and are VERY VERY commonplace. What Private Sector attorney, CPA, etc. doesn’t routinely work 50/hrs/wk ? So are Public Sector PHDs and “professionals” really compensated less on an hours-actually-worked basis …. or are they compensated the same or perhaps more ?

    And taking that logic a bit further, many PRIVATE Sector “professionals” bill clients by the hour, and for obvious reasons they don’t goof off, spending time at the water-cooler or surfing the internet. I’d wager that there is a GREAT deal more “unproductive” time spent by PUBLIC than PRIVATE Sector “professionals”. So, a proper study of PUBLIC/PRIVATE Sector compensation “‘should” (although certainly not very easy to do so) measure not only the ACTUAL HOURS “worked” per week, but also the PRODUCTIVE WORK OUTPUT per hour worked. Again, I’d wager that it’s considerably higher for PRIVATE sector “professionals”.

    (2) While all of your points are good ones, I didn’t see anything that adjusts for the major difference in the Public/Private Sector jobs. As a whole, Public Sector workers have greater education and work in more responsible jobs …. eg. there aren’t many minimum (or near-minimum) wage fast-food workers in the Public Sector. While I VERY strongly support EQUAL PUBLIC/PRIVATE Sector total compensation (pay + pensions + benefits), Public/Private sector compensation comparisons should be between workers in jobs with reasonably comparable risks, and which require reasonably comparable education, experience, skills and knowledge.

    Reply
    • Seesaw Junior
      Seesaw Junior says:

      In the real world “Professionals”, such as lawyers, doctors, CPA’s, middle and senior level executives etc. are “exempt” employees and receive no overtime at all. Nothing. Very few would work a normal 40 hour work week, and in the case of highly compensated lawyers ($150K starting salary), available to only a handful few of lawyers graduating in the top half of T-14 law schools AND hired on at blue chip law firms, they will be working a minimum of 80 hours per week, but probably closer to 100+ hours per week. If the average gov employee worked that many hours per week any amount over 40 hours per week would be time and a half, and any amount over 12 hours a day would be double time; and they would make MORE than a Harvard Law Grad working at an elite law firm.

      Reply
  2. art
    art says:

    also teaching degrees are a large part of the “professional” class but they are by far the easiest degree to earn and skew the number(not to mention tenure and 180 day year). A teaching degree to a STEM degree is like the person who wins the town tennis tournament competing for the US open. Yes it is the same game but light years apart for rigor, accountability etc. Many teachers can make 90k for 500/day..I know many at age 58 whose major concern is high school sports

    Reply
  3. Tough Luck
    Tough Luck says:

    Tough Love has it right. Comparing a subset of a universe to the entire universe is always going to show a difference as the composition of the two are different. It is s statistically invalid methodology and the authors should know better.

    Reply
    • Tough Love
      Tough Love says:

      I’m ALSO correct when in many past comments I have stated that Public Sector pensions are ROUTINELY 2 to 4 times (4 to 6 times for safety workers) greater in “value upon retirement” (when factoring in not just the MUCH greater per-year-of-service “formula factor”, but also the MUCH more generous, and hence costly provisions, such as very young full/unreduced retirement ages, and COLA increase, all but unheard of in Private Sector pensions) than those typically granted comparably situated Private Sector workers who retire at the SAME age, with the SAME pay, and the SAME years of service.

      There are ZERO “solutions” to the pension mess unfolding in States and Cities across America that does not include either a hard freeze (with ZERO future growth) or VERY material (50+%) reductions in the pension accrual rate for the future service of all CURRENT workers. Anything less is just Union-supported smoke and mirrors.

      And re employer-sponsored retiree healthcare benefits ……. Public Sector workers should get Taxpayer-subsidies EQUAL to what their Private Sector counterparts typically get from their employers, NOTHING.

      Reply
  4. S Moderation Douglas
    S Moderation Douglas says:

    “A new report from the Cato Institute concludes that federal government employees are paid salaries 78% higher than the average private sector worker. That’s the number that’s generating headlines. And it’s basically wrong.”

    (Andrew Biggs, “If Women Are Underpaid By 23%, Then Federal Employees Are Overpaid By 78%”. Forbes, OCT 9, 2015)

    Biggs…
    “If I were a federal employee, I would push back *hard* on the 78% headline pay difference number.”
    ……………………
    “Government Workers Cost 45% More Than Private Sector Workers”

    (CHRISS W. STREET, Brietbart, Mar 2014)

    Also basically wrong.
    ……………………..
    “California’s Government Workers Make TWICE As Much as Private Sector Workers ”

    (Ed Ring, California Policy Center, January 24, 2017)

    That right there is what has come to be known colloquially as “alternative facts.”

    To paraphrase Kellyanne Conway: Ignore what Ed Ring actually says and ‘look at what’s in his heart’

    Reply
  5. S Moderation Douglas
    S Moderation Douglas says:

    A blast from the past…

    Posted by Tough Love on April 17, 2016 at 1:57 pm (Burypensions!

    SMD (and John ,,, see request at the bottom) ……..

    All you need to do to compare Private vs Public Sector Plan generosity assuming both have DB plans (noting that it is rare to be accruing new benefits today in Private Sector Plans today, most already having been frozen), is to compare the “formulas” (meaning the per-year-of-service “formula-factor”), and the Plan “provisions” (the material ones being … (a) are the benefits COLA-increased, and (b) what is the youngest age at which participants can retire without an actuarial reduction in the otherwise calculated pensions.

    You do NOT need to know the salary …..period ….. no matter how many time you assert otherwise. And in an example at the bottom, I won’t even use a Salary but simply an “S” as a placeholder for ANY salary you choose.

    And here’s the math (for those with an ABOVE grade-school level of math-competence). And while relationship in CA (SMD’s home State) is even WORSE for Taxpayers (because CA’s Public Sector pensions are even richer than those in NJ), I’ll stick to NJ’s situation:

    (1) Public Sector formula factors are typically 50% greater than those of their Private Sector counterparts for non-Safety workers and 100% greater for Safety workers..

    That gives us adjustment factors of 1.50 for non-Safety and 2.00 for Safety.

    (2) While now suspended in NJ, Public Sector pension Plan COLA-increases were in place for decades, and the expectation is that the COLA-suspension will be overturned (and they are still in place in CA and almost everywhere else), while it is extraordinarily rare for a Private Sector Plan to include a COLA-increase provision..

    Adding a COLA-increase provision to an otherwise identical pension typically increases the pension’s “value” by 25 to 30%, with the value being higher with younger retirement ages. That gives us adjustment factors of 1.25 for non-Safety and 1.30 for Safety.

    (3) Private Sector Plans typically have a “Normal Retirement age” (NRA) of 65, meaning that if you retire and elect to begin COLLECTING that pension before your NRA, your pension will be reduced by about 5% per-year-of age.

    If we assume (Yes SMD, a “reasonable” assumption that needs to be made … even though you will likely reference it’s use it in your “Smoothing” response sure to follow) that Non-Safety Public Sector workers can retire at age 60 WITHOUT any reduction in their pension, and Safety workers can retire at 55 WITHOUT any reduction in their pension, and that Public Sector workers do in fact retire at those ages (as MANY do), what adjustment factors do we have?

    The retiring age 60 non-Safety worker gets their FULL pension while the Private Sector worker who retires at age 60 would typically get a (65-60) x 5% = 25% pension reduction. That makes the non-safety worker’s pension worth 4/3 of the Private Sector worker’s pension or an adjustment factor of 1.33

    The retiring age 55 Safety worker gets their FULL pension while the Private Sector worker who retires at age 55 would typically get a (65-55) x 5% = 50% pension reduction. That makes the non-safety work’s pensions worth TWICE that of the Private Sector worker’s pension or an adjustment factor of 2.00
    ———————————————————–
    Lets now bring together to impact of all the apples-to-apples-appropriate adjustments factors (from (1), (2), and (3) above) …………

    The non-Safety worker’s pension with final salary “S” (the SAME as that of the Private Sector worker ….. for ANY value of “S”) is:

    1.50 x 1.25 x 1.33 = 2.49 TIMES greater in value at retirement than that of the similarly situated (in pay, age at retirement, and years of service) Private Sector worker.

    And the Safety worker’s pension with final salary “S” (the SAME as that of the Private Sector worker ….. for ANY value of “S”) is:

    2.00 x 1.30 x 2.00 = 5.2 TIMES greater in value at retirement than that of the similarly situated (in pay, age at retirement, and years of service) Private Sector worker.

    ======================================

    Lastly……….

    John, I sense you prefer to stay out of the VERY differing positions I and SMD have taken on the “value” of Public vs Private Sector pensions.

    But as the actuary-expert as well as host/moderator, how about chiming in. If you think I’m wrong please say so, but if you agree that the value-differences I’ve stated above is essentially correct (obviously noting that specific differences with vary with the specifics of the Plans being compared), please state so as well.

    I’m sure many of your readers don’t know whom to believe ……. you owe it to them to respond, given your expertise and experience.

    Thanks in advance.

    ?????????????????????? end of post ?????????????????????????
    .
    .
    .
    .

    Jan. 26, 2017, S Moderation Douglas says, again…

    GIGO… As I have stated many times, the quality of your math is irrelevant because your premise is faulty. Your statement above:

    “The non-Safety worker’s pension with final salary “S” (the SAME as that of the Private Sector worker ….. for ANY value of “S”) is:

    1.50 x 1.25 x 1.33 = 2.49 TIMES greater in value at retirement than that of the similarly situated (in pay, age at retirement, and years of service) Private Sector worker.”

    …Is incorrect for the very same reason you stated to Ed Ring…

    “Public/Private sector compensation comparisons should be between workers in jobs with reasonably comparable risks, and which require reasonably comparable education, experience, skills and knowledge.”

    Reply
    • S Moderation "denier"
      S Moderation "denier" says:

      The moral of the story is…

      If you’re going to be incorrect, you might as well be incorrect to at least two decimal places.

      Reply
    • Tough Love
      Tough Love says:

      No SMD, not GIGO, and as accurate today as it was when originally published …. although with COLA NOT being reinstated, a recalculation would make the HUGE Public Sector advantage shown above to be a bit lower.

      Perhaps if YOUR CA Public Sector worker responsibilities …… which included such things as changing light bulbs ……. were more substantive, you would understand.
      ————————————————-
      And for those who wondered why I stopped posting on BURYPENSIONS, it was Mr. Bury did not respond to my revey reasonable request to chime-in.

      Reply
    • S Moderation "denier"
      S Moderation "denier" says:

      I believe the response was revey clear. The silence was deafening.

      Have you stopped posting on Calpensions also?

      “Mr. Mendel,

      Time to stand up for what right.”

      And, no, you are comparing private and public worker with the SAME pay, not “workers in jobs with reasonably comparable risks, and which require reasonably comparable education, experience, skills and knowledge.”

      Still GIGO.

      Reply
      • S Moderation "denier"
        S Moderation "denier" says:

        Above my grade level?

        Tough Love:
        “And for those who wondered why I stopped posting on BURYPENSIONS, it was Mr. Bury did not respond to my revey reasonable request to chime-in.”

        ???

        Posted by PatB on April 17, 2016 at 11:50 pm (Burypensions)

        “Of the actuaries and accountants who must read this blog, I can remember no one defending your math. Maybe this is the time for them to come to your rescue, for the sake of truth, which there seems to be so little of in public pensions.

        So if anyone supports your math, speak now. If they agree but find fault in it, they should say so, maybe we can all learn something. And if its mostly BS, I hope you can handle the truth.”

        The silence is still deafening.
        ……………..
        If you recall, that whole dust-up began when you made a (typical) unsubstantiated statement, based, apparently, on nothing more than your own bias.

        “These workers have run-of-the-mill pensions, clearly very modest (and MULTIPLES LESS) than those granted Public Sector workers.”

        Easily fact checked and clearly refuted.

        https://m.funsubstance.com/uploads/original/46/46093.jpg

        Better check your own grade level.

        Reply
  6. S Moderation "denier" LOL
    S Moderation "denier" LOL says:

    The 9/80 workweek was not just for professionals. Most CalTRANS employees also went on either a 9/80 or 4/10 schedule. It was dictated by management, not requested or bargained by employees. The goal, we were told, was to ease traffic congestion and reduce energy usage… And, to encourage private industry to do the same. (Lead by example.)

    Ed Ring…
    “skip a few lunches and show up a few minutes early or depart a few minutes late each workday, and take 26 additional days a year off with pay because….”

    Don’t try to mask your disdain for public employees, Ed. You know we’re in cahoots with the California elites… “We saw what you did, and we know where you are.”

    TL… We didn’t have a water-cooler, and the only employee in our crew with internet access was the supervisor.

    Reply
  7. C. T. Weber
    C. T. Weber says:

    What a crock. No wonder the rich are getting richer. They can really spread it around. But let’s pretend that everything I read was true, even though its not, it seems like the case has been made to unionize the private sector workers. So, instead of dragging public sector workers down any lower than they are let’s pull the private sector workers back up to where they were before the unions were smashed.

    Reply
    • Tough Love
      Tough Love says:

      The odds of a material segment of Private Sector employers offering Traditional-style “Final Average Salary” DB Pension Plans even remotely approaching the richness of those now ROUTINELY granted Public Sector workers (by our self-serving, contribution-soliciting, vote-selling Elected Officials) is likely not much lower than my odds of winning the Powerball Lottery.

      Reply
    • Seesaw Junior
      Seesaw Junior says:

      So, instead of dragging public sector workers down any lower than they are let’s pull the private sector workers back up to where they were before the unions were smashed.
      Another trough feeder who lives on another planet and does not know the first thing about math, finances or economics. If we paid the private sector the same as the public sector we would run out of money in about 7 days and the cost of a candy bar would be $100,000. And we HAD the private sector “unionized” and guess what happened Mr Trough Feeder, the company FIRED all of the “unionized” workers and sent their jobs to another country. Any other brilliant idea from Mr Know It All…. The ONLY reason the pubic sector is making 10, 20, even 50 times MORE than what the private sector does, for the same skill set, is because there is NO COMPETITION, has ZERO to do with being in a “union”. You ride the short bus for a reason.

      Reply
  8. S Moderation "denier"
    S Moderation "denier" says:

    http://www.collectingcandy.com/wordpress/wp-content/uploads/2012/06/CC_1980s-100000-bar-wrapper.jpg

    Other than that, you got nothin’ but alternative facts. In the US, since 2000, most of the “good” (manufacturing) jobs didn’t go overseas; they went to automation.

    “10-20-30-40-50 or more? You got the lyrics to The Red Baron mixed up with real life, Puppy. In the most misunderstood data of all time, public workers make “45% more” than private. That would be the BLS comparing average employer costs for public workers to average costs for private workers (NOT “for the same skill set”). When the BLS compares public workers to private workers in large corporations, the public workers earn less. (Those private sector workers have more paid time off, too.)

    Why? Competition. Large employers (and governments are usually large employers) are much more likely to have stringent requirements, background checks, and competitive testing for entry and for promotions.

    In large corporations, higher average salaries than the public sector is the norm. When comparing total compensation, every major study says that for similar “skill sets”, lower skilled public workers make more than the private sector, and higher skilled, higher educated public workers make much less.

    If I told you once, I told you a million times… don’t exaggerate!

    Reply
  9. S Moderation Douglas
    S Moderation Douglas says:

    “Earlier today the California Policy Center released a study that provided facts about government compensation.”

    #alternativefacts

    Reply
    • Tough Love
      Tough Love says:

      Not sure if THIS is the article that you are talking about ………….

      http://unionwatch.org/orange-county-fire-authoritys-hefty-overtime-bill-bad-deal-irvine-taxpayers/#comment-17981

      which describes how Firefighter overtimes results in HUGH HUGE pensions, and recommends Outsourcing firefighting services.

      Just though I’d share my thoughts on that subject:

      ————————————–
      Short of a hard freeze (ZERO future growth) of the DB Plans of all CURRENT Public Sector workers, OUTSOURCING is indeed the logical alternative.

      When “employment” ends, so does all future growth in their pensions …. and likely any obligation for retiree healthcare benefits as well.

      Public Sector workers are NOT “special” and entitled to greater pensions and better benefits …. on the Taxpayers’ dime.

      The decades-long financial mugging of Private Sector Taxpayers by the insatiably greedy Public Sector Unions/workers, and enabled by Elected Officials whose favorable votes on Public Sector pay, pensions, and benefits were BOUGHT with Union BRIBES disguised as campaign contributions and election support must end …. now.

      Taxpayers …. get OFF your duff and DEMAND CHANGE !

      Reply
  10. Lois o'connell
    Lois o'connell says:

    How about all you bashers of public employees get a life! Strive to make your life better by doing something worth more pay and benefits yourself instead of relying on the naysayers who cite manufactured data and irrelevant statistical comparisons to make their case. Sure, some public employees are paid well, but statistics also show that the majority if public employees struggle to make it in this world too. In the end, we all need the services that public employees provide. Just try getting along without them.

    Reply
    • Tough Love
      Tough Love says:

      No Lois,

      How about an END to vastly overcompensating Public Sector workers, not (mostly) via excessive cash wages, but via pensions that are ROUTINELY 2 to 4 times (4 to 6 times for Safety workers) greater in value upon retirement than those typically granted COMPARABLE Private Sector workers who retire with the SAME wages, at the SAME age, and with the SAME years of service….. and employer-sponsored (meaning Taxpayer-funded) retiree healthcare promises TYPICALLY worth a level annual 10% of pay, while Private Sector workers TYPICALLY get NOTHING from their employers today.

      Yes, Public Sector workers have a better financial life ….. but only due to the COLLUSION between the Public Sector Unions and our Elected officials, with the former BUYING the favorable votes of the latter with campaign contributions and election support.

      And to repeat what I stated earlier ….

      The decades-long financial mugging of Private Sector Taxpayers by the insatiably greedy Public Sector Unions/workers, and enabled by Elected Officials whose favorable votes on Public Sector pay, pensions, and benefits were BOUGHT with Union BRIBES disguised as campaign contributions and election support must end …. now.

      Reply

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