Public/Private Sector Compensation Bakeoff (David Leonhardt Edition)

New York Times columnist David Leonhardt has weighed in on the public/private salary rumpus triggered by the Wisconsin union- busting campaign, and he delivers a customarily level-headed verdict:

[A]cademic papers spanning more than 30 years have found that government workers receive compensation that is similar — with somewhat lower salaries and somewhat better benefits on average — to that of private sector workers with similar qualifications. One study went so far as to include workers’ scores on an intelligence test, to ensure the comparison was apples to apples. Over all, government workers are modestly underpaid or overpaid, depending on which technical accounting assumptions are used to value their pensions.

Either way, modestly is the crucial word. There is no good case that government pay is a major cause of the budget problems now facing states.

The major cause, Leonhardt says, is that pesky kicking-the-can-down-the-road inclination of local, state, and federal governments:

The delaying of costs is obvious. Both politicians and union leaders have decided that generous future benefits offer the easiest way to hold down spending and still satisfy workers. The result is government pay that’s skewed too heavily toward pensions and health insurance.

To be clear, I’m making an argument that’s different from “Government workers are overpaid.” I’m saying that they are paid in the wrong ways — in ways that make life easier on union leaders and elected officials, at least initially, but that eventually hurt both workers and taxpayers.

The solution, Leonhardt says, is not to cut the pay and benefits of public workers, but to “get rid of the deferred benefits that make no sense — the wasteful health plans, the pensions that start at age 55 and still let retirees draw a full salary elsewhere, the definitions of disability that treat herniated discs as incurable.”

Then again, what’s really incurable is the partisan instinct not to solve problems, but to exploit them.

Everything – and everyone – else is just caught in the crossfire.

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