Economics, Entitlements

A Public-Sector Pay Challenge

“A foolish consistency,” Emerson said, “is the hobgoblin of little minds.” If so, the mind of Economic Policy Institute President Lawrence Mishel is a truly hobgoblin-free zone, as the Heritage Foundation’s Jason Richwine details over at the Foundry blog. In an effort to debunk the “myth” that federal employees are overpaid, Mishel cites statistics from the President’s Pay Agent claiming that federal employees are actually underpaid by 24 percent. But as Jason and I have pointed out in a number of joint articles, the Pay Agent is a total outlier—there’s a long history of peer-reviewed academic research that consistently finds that federal employees are paid 10 percent to 20 percent more than private-sector workers with the same age, education, and other characteristics. Jason and I explained here why the Pay Agent’s results are wrong.

But here’s where things get really rich: Mishel’s own institution recently released a study comparing pay for state and local government workers to that of private employees, finding that their pay is roughly comparable. I have some issues with these studies’ treatment of benefits, but their basic analysis of salaries is sound. But if you apply the exact same methods utilized in EPI’s state/local pay study to federal employees, it will show federal workers to be significantly overpaid. In other words, EPI uses industry-standard methods when those methods show that state/local government workers aren’t overpaid, but abandons those methods when it comes to federal workers and instead relies on the Pay Agent’s results, which no one except for partisan advocates and public employee unions takes very seriously.

So here’s my challenge to Mishel, one that I’m confident Jason would  sign onto as well: ask the researchers who conducted EPI’s study on state/local government worker pay to disclose what their calculations show regarding federal pay. It’s literally around a five-minute exercise, since all the numbers have already been run. I’m not holding my breath…

Comments are closed.