The State Worker

Chronicling civil-service life for California state workers

October 19, 2010
Studies disagree about California public employee compensation

The title of a new study released on Monday by UC Berkeley's Institute for Research on Labor and Employment says it all: "The Truth about Public Employees in California: They are Neither Overpaid nor Overcompensated."

Cal economist Sylvia A. Allegretto and Jeffrey Keefe, an associate professor of labor and employment relations at Rutgers University, found that state and local government employees are paid about 7 percent less than private sector employees when adjusting for factors such as education and experience.

The Berkeley report opens with this comment:

Recently, there has been a great deal of debate and consternation over the compensation of public-sector employees across the U.S. It has been asserted that state and local government employees are overpaid compared to workers in the private sector. In California government workers have been vilified as scandals and anecdotes pass as confirming evidence of exorbitant pay ...

While anecdotes that stem from public-sector corruption capture much attention, it is a data-driven analysis of public-sector pay and compensation that is needed to answer the question: How do the pay and benefits of public sector workers compare to those in the private sector? This is a legitimate question that should not be answered anecdotally. The research in this paper investigates empirically whether California public employees are overpaid at the expense of California taxpayers.

Then there's the recent report, by Lanny Ebenstein, a UC Santa Barbara economist, head of the California Center for Public Policy and president of the Santa Barbara County Taxpayers Association. "Reforming Public Employee Compensation and Pensions. Here's the opening paragraph:

It is time to reform public employee compensation in California. Public employee compensation is out of line with the private sector in every area. There are thousands of individual government agencies in the state, employing almost 2 million individuals. Whether the standard is salary, working conditions, benefits, or especially pensions, public employees in California receive compensation far in excess of what workers in the private sector do. It is illiberal and unjust, and no true liberal or progressive should support current public employee compensation.

Ebenstein figures that compensation for public employees, "considering all factors of remuneration, may approach 80 to 120 percent more" than private employees'. His conclusion: "If all public employees were paid fair compensation in California, public services could be increased substantially and taxes could be cut. This is the policy goal to seek."

Read the dueling studies for yourself. Click here for the Berkeley report and click here for the UCSB professor's report.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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