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Home Publications Blogs Beat the Press USA Today's Government/Private Pay GAP Could be Eliminated by Hiring More Groundskeepers

USA Today's Government/Private Pay GAP Could be Eliminated by Hiring More Groundskeepers

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Tuesday, 01 March 2011 03:46

USA Today ran an article highlighting a difference in pay between government workers and private sector workers in Wisconsin and 40 other states. The methodology used in the article simply takes average compensation per worker without adjusting for their education, experience or other factors that typically affect pay. (Most people expect a cardiologist with 25 years of experience to earn more than a 20-year old counter person at McDonalds.)

The gap in compensation (pay and benefits) highlighted in the USA Today article could be eliminated if governments made a point of replacing work that is often contracted to outside businesses (e.g. cafeterias in government buildings, custodial work in government buildings and groundskeeping on government properties) with government employees. By increasing the ratio of less educated workers to more highly educated workers (e.g. teachers, nurses, and doctors) state governments can eliminate the sort of pay gap that concerns USA Today.

Analyses that do control for education, experience and other factors in ways that are standard within economics consistently find that public sector workers receive somewhat lower compensation than comparable workers in the private sector. This article does cite Jeffrey Keefe, an economist who has done such analyses, pointing out this fact, but it is unlikely that many readers will pick up this point.

Comments (2)Add Comment
...
written by izzatzo, March 01, 2011 6:55
Most people expect a cardiologist with 25 years of experience to earn more than a 20-year old counter person at McDonalds.


Not any more. The relationship between performance and pay in the USA is broke.

Cardiologists, like so many other 'professionals', coast through their careers on credentials rather than qualifications, and the informational-transactional barrier that protects them from separation of high versus low performance is so high, many of the losers are so overpaid they could easily be 'making what they're worth' at McDonalds.

So much for free markets separating losers from winners.
Cauchon
written by tgv, March 02, 2011 9:13
That USAT reporter is a serial offender. It has been explained to him many times that his public vs. private comparisons make no sense, yet he continues to write them. Worse yet, USAT continues to run them.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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