It’s Been a Good Decade: Why Public Employees Make So Much of Freezes or Minor Cuts
To those of us not in the public sector, it seems outsized when public employees and politicians make so much of temporary pay freezes or a few minor cuts (or reductions in the expected increases!). Red Jahncke adds some context that will help us understand their perspective by explaining how, nationwide, local and municipal government employee compensation has outpaced the private sector. He backs it up with two tables (6.2D and 6.5D) from the National Product and Income Accounts of the U.S. Bureau of Economic Analysis.
Table 6.2D shows that, nationally, state and local government worker compensation grew 45 percent from 2000 to 2007 — plus another 8 percent in the next two recession years, while private-sector compensation grew only 33 percent from 2000 to 2007 and — surprise, surprise — fell 3 percent in the recession. [Incidentally, the chart also shows that Federal Gov’t grew 52% 2000-07, 11.5% during the next two recession years~ed.].
Table 6.5D reveals that, during the 2007-2009 recession, private-sector employment fell by 8 million jobs to a level below its total in 2000, while state and local public-sector employment grew by 185,000 jobs, reaching 1.3 million, or 9 percent, above its total in 2000.
As Jahncke notes, public sector salaries were ahead of private before the Great Recession. He continues:
The 2007- 2009 data speak to the issue of fairness — massive job losses and pay cuts in the private sector, continued job gains and a smart compensation boost in the public sector. In 2010, relatively few jobs were regained in the private sector or lost in the public sector.
And the data for the full decade speak to the issue of sustainability: How can slower-growing private-sector income produce the taxes to fund a public-sector payroll growing at almost twice the pace?
The answer is that it can’t, and it isn’t.
So now we get even Democrats making cuts and both they and the unions think they’re making significant sacrifices. Given their experience over the last decade, I can understand why they think that. But they have to understand that the sacrifices they are making now have already been wrung from private sector employees over the last decade. So forgive us if we don’t hail them as martyrs for giving some of what they earned–even during the Great Recession–back.