Market Wages for Government Employees
I’m going to pick on the comment by Mpeterson under this post because… well… I can. He says:
For some real excitement, compare the double digit annual base rate pay increases among lawyers who worked for Tommy while yours truly and the rest of the UW Colleges faculty were staggering along at about 1% per year—behind the rate of inflation, I note in passing.
I’m not going to defend the pay increases of the lawyers under Tommy or anyone else, but I would point out that their pay has absolutely nothing to do with the pay of college professors. I have always been a believer in the notion that government should pay the market rate for the employees that it needs. I mean that in terms of total compensation and including the soft benefits.
Now, lawyers in the private sector make a good wage. The government needs pretty good lawyers so it should pay a market wage for them. College professors also make a pretty good wage in both the private and public sectors. But let’s get real… if a good lawyer wants to quit government and go into the private sector, he or she can expect to make several hundred thousand dollars a year. If a philosophy professor decides to quit the university system and go into the private sector, he or she can make… not much.
So the fact that Mpeterson only got a 1% raise per year is irrelevant to what other folks make. I suspect that if we cut his pay by 30%, the State of Wisconsin could still reasonably expect him to show up for work and do his job. If the State of Wisconsin cut the lawyers’ pay by 30%, I suspect that the State would only be able to employ the dregs of the legal profession.
Markets always work the same - even in labor wages for government employees.
UPDATE: Reaganite at The Crocodile Cage adds some quality elaboration on my point:
But let’s make sure people understand what is included in “soft benefits.” That is more than the significantly-better-than-market health, vacation and retirement benefits government employees receive.
It also includes some very soft benefits. Most government employees have job security that does not exist in the private sector. Many have more relaxed performance standards and lesser accountability. Few government employees need to be concerned with sales or marketing or the risks associated with bad receivables. Government employees do not need to be concerned with declining demand for their services. Few government employees work overtime or weekends. And few government employees are as qualified as their private secotr conterparts.
Owen, your inability to extend your logic is amazing. Maybe it’s because you don’t realize that faculty are in a national market.
Cut their pay, or even don’t keep up, and many will just go elsewhere . . . which is what many have been doing in the UW.
Not all, of course. Some are at a stage in their careers and lives that they won’t leave—but then you’ll have a faculty near retirement, and it will cost you a lot soon to replace them. Others will retire sooner than planned, and ditto replacement cost. If you don’t know why, look up a process called salary compression.And yes, many can go get other jobs. You use philosophy professors, of which there are very few on any campus. Think about the biggest group, business professors, who are expert marketers, CPAs, etc. Think about economists, architects, and many others in professional schools because they are professionals who can go right back into . . . the professions.
Hmm, think about law professors. There are a lot more of them, who fit your example, than there are philosophy professors. Actually, you could use what they teach: logic.
And then there are all those other fields no doubt useless in your view—like English and history—that teach another useful skill you could use: research. Look up those average faculty salary levels elsewhere. Heck, you can even look here, since private universities in this state now pay better. So some faculty wouldn’t even have to leave; they could just cross town.
And then all the taxpayers have to do is send their kids there. Tuition at those schools is averaging over $20,000 a year now,
Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 0130 hrs
Come on, freefall, that’s total BS. Can some of those professors make more in the free market, sure, but not all.
I went to U.W. Madison, and in so many classes over a wide spectrum of classes, I found few who could make it in the real world. That especially goes for special education and education professors. In my liberal arts classes, there even fewer professors who could make it in the real world.Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 0148 hrs
Dan, how did you do in college with those reading comprehension skills?
Reread. Rinse. Repeat. I also said “some, not all.” I also specifically wrote about the (vast majority of) faculty teaching in professional schools, most of them coming from the professions—not the librul arts profs (although many also came from other workplaces first).
As for education profs, most also have been teachers. But in that area—which I specifically did not include—you’re probably correct. Who would go back into that job, with all the thanks it gets from the likes of you?
Now: Reread. Rinse. Repeat.
Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 1103 hrs
And to make it more clear, Dan, what also is missing from Owen’s comparison here is the presumption that the faculty marketplace is entirely public sector. As I noted, what the UW is facing now is not just competition from the many private campuses elsewhere with better pay scales in the usual national marketplace. Now, the pay is better at many private-sector campuses in this state, sometimes even in the same cities.
And the benefits are better at some private campuses here now—and the stability definitely is better than in states that can’t pass budgets on time.
For parallel situations, and in the Midwest, see what happened in cities like St. Louis, Chicago, Minneapolis, and Detroit when private campuses could pick off faculty from public campuses, without the cost or family upheaval for faculty having to move.
Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 1112 hrs
And we averaged 3% raises at my company and had to also pay more for our health insurance premiums….
The profs got a 1% raise from the public teat while keeping cadillac bennies and getting more time off than anybody else can possibly imagine. Those last two points are why they will NOT leave academia - they would end up with a total C&B;loss if they did.
<sniff> my heart is bleeding…..
Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 1254 hrs
Lesson: I need to spell check even when I post late at might (“secotr conterpoints”?). It becomes even more clear when someone quotes me!
Posted by Crocodile Cage on August 18, 2007 at 1330 hrs
In response to rc’s comments, let me clear something up about “getting more time off than anybody else can possibly imagine.” This holds true for both K-12 teachers and the typical college professor in most disciplines. K-12 teachers and professors work on 9 or 10 month contracts. They do not get paid for their summers. Many of you are saying that I know teachers who get paychecks in the summer. You are right. They have negotitated to have their 9 month salary paid to them ~24 times a year. That doesn’t mean they are getting paid for working the summers. In my discipline, chemistry, let me give you some numbers for professors. At a UW university like Eau Claire, new professors start at $50,000 for 9 months. Summer salary of up to 2/9th of the 9 month salary must be obtained by the professor through external funding to fund their research program for the summer. If they are unable to find funding, they still must work the summer doing research if they want to stay at that school since as the chair of that department told me last week, “It is impossible to get tenure without working the summers.” At UW-Madison, new professor start at $70K for 9 months. I would argue that both of those numbers are very nice salaries, but the minimum requirements to be considered for either of those jobs is 4 years for an undergraduate degree, 5-6 years of graduate school, and 2-3 of postdoctoral experience. Thats 11-13 years of experience before you even are qualified for a faculty position. Salary for graduate school during chemistry is $20K/year with a bump to ~$35K during the postdoc years.
In comparison, former labmates of mine have been offered private salaries from $65K to $100K to start.
I give these numbers certainly not to complain or boast about the salaries. I give them just to provide some real numbers rather than the teachers and professors make millions and never work. I think that K-12 teachers are adequately compensated and professors are as well. Soft bennies are a big consideration for taking those jobs. But for chemistry, even the best qualified superstar candidates are 29 years old when they start their first real job.
Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 1505 hrs
Thanks, Floyd. That’s helpful.
As I said, I support paying (in total compensation and intangibles) what it takes to attract the talent that we think we need. Chemistry is a discipline with a valuable private sector market.
My point with this post is that one can’t evaluate the worth of one’s own job by comparing it to the value of a completely unrelated job. Each job operates in its own market.
Posted by Owen on August 18, 2007 at 1520 hrs
Each job operates in its own market.
True, which is why the analogy to Tommy’s lawyers isn’t that valid. But Freefall’s original rebuttal is also accurate: cut the salary of UW professors (or fail to give them raises in line with what professors elsewhere are getting), and those professors will look for jobs at other universities. It’s already happening, as the UW system lags behind many of its peer institutions in salaries. Professors do respond to the market like everyone else…
Of course, not everyone will be able to “trade up,” but guess who will? The most talented ones. Who will stay? Those with other reasons for staying…and “the dregs.”
Floyd is also right: Professors may be on a 9-month salary system, but those who don’t work over the summer do not get tenure, promotions, and/or good merit raises.
Like Floyd, I’m not writing this to complain about the salaries—no one goes into academia to get rich, and the intangible benefits are high. I just want to reiterate the point that not giving competitive raises can have consequences, even in the public sector.
Posted by .(JavaScript must be enabled to view this email address) on August 18, 2007 at 1543 hrs
But let’s get real… if a good lawyer wants to quit government and go into the private sector, he or she can expect to make several hundred thousand dollars a year.
Hah! There are many types of attorneys, many types of jobs.
Payscale.com says median 20 years, $109K.
A grain-of-salt WisBar self-selected survey.
From Marquette:
The average starting salary for a public interest attorney in Wisconsin is $33,669. The average Marquette University Law School graduate in 2003 had $68,427 in student loan debt resulting in a monthly payment of $850, with forty-five percent (45%) of his/her salary committed to student loans.
Posted by John Foust on August 18, 2007 at 2342 hrs
LOL. You are as always, Owen, welcome to try.
I was really only trying to point out that some of the biggest increases in the cost of state spending during the last 15 years were not in faculty salaries but in the governor’s administration.
I was not trying to argue that the pay scales should be equivalent. Nonetheless, the pay increases were not equivalent and that’s the point.
While the state did cut my benefits by $1500 a year in the last budget—and that stung a bit—if they cut my salary by 30% I’d probably leave. :^) But then I don’t work here because the money is good—I work here because I like it.
(Floyd! You’re killing me. The Colleges are the poor rural relations to all you big shots in Madison. ;^) I think our new starting salaries for assistant profs is about $40k. Still, a lot of us are refugees from industrial education. I didn’t like lecturing to 500 students at a shot. Now I get course caps of around 30.)
Business assumptions about ‘value’ are grounded in economics, not in “life”. Professors often fall outside the paradigms of a market economy because money is not the basis for the decisions we make about what will make our lives good. If we aren’t making decisions based on economic values, but on human ones, then market economics doesn’t apply axiomatically.
Whenever I see these discussions I remember that: “To a man with a hammer, everything looks like a nail.”
Market economics is a big hammer these days. It’s no surprise that everything will look like a nail to those swinging it.
Ranting continued and augmented over at The Motley Cow.
hiho
MarkPosted by Mpeterson on August 19, 2007 at 0039 hrs
Right now, the state pays prosecutors $46,000 a year coming in the door—and with no step system (like teachers, police officers and other public employees have) it doesn’t improve with years of service (except for across the board percentage hikes).
Those lawyers could make 2-3 times that in the private sector.
We owe them appropriate salaries and staffing.
Will that happen? Nope.
The finest governor money can buy forgets that he was once a prosecutor—or maybe he remembers and is scared of what having an adequate stable of prosecutors might do…like prosecute more corrupt politicians.
Posted by RAG on August 19, 2007 at 0223 hrs
This study compares the cost and production between public and private agencies providing child welfare (foster care) services for Milwaukee County Children. It shows that public workers provided twice the production than private agencies. Currently, the privatized system is about 50% higher than it was just a few years ago, now that the County isn’t allowed to help their own children. And the services are just as bad, if not worse, than they were under public administration, and no accountablility between the many agencies.
Posted by .(JavaScript must be enabled to view this email address) on August 19, 2007 at 2055 hrs
Capper, I think that Owen was discussing private service providers in the private market - not private companies living at the public trough. As soon as you add government to the equation, true market forces are curtailed and everyhting is thrown out of whack. Often, government contractyors act like government employees. Why? Because they can. That is not to disparage all government employees - there are some great ones (just as there are some great contractors). But the dynamic is very different than the dynamic in the private marketplace.
Posted by Crocodile Cage on August 19, 2007 at 2216 hrs
Fair enough point, Croc. I do know that the state had to order the private agencies to give their workers a raise due to the high level of turnover. People were leaving at a rate of over 50%, which added to the overall cost.
I’d also point out that there are some functions that the private market can’t and/or shouldn’t be allowed to do, such as child welfare, etc.
Posted by .(JavaScript must be enabled to view this email address) on August 19, 2007 at 2246 hrs
Owen, again—you’re not getting that you’ve got apples and oranges here, with the difference between UW faculty, which you picked up about from MPeterson, and other state government employees.
Almost every point in your update simply does not apply to UW faculty, the original point of your post. Again, faculty are in a national marketplace putting us in competition with other states, while most other state agencies compete only within this state or even within their cities and towns for employees—including fulltime nonfaculty who are more of the teachers in the UW, not including even more parttime nonfaculty teachers.
As for benefits, first, fulltime teachers—faculty and others—in the UW do not get vacation. period. They get laid off annually, every summer—and don’t qualify for benefits for that, either. (They are classified as “seasonal employees,” like migrant field workers:-). But as has been pointed out, they better work through the summers and “breaks” for free to be able to stay on at all after six years, or they have to go—to be replaced by new hires who cost a lot more by then.
As for health benefits, you really have to look again at what has happened in recent years; see MPeterson’s point about the in-effect cuts in pay, etc. As for retirement benefits, you also really have to look again at the difference between the WWII generation and those hired for the last 20 years in the UW.
Etc., etc. And Wisconsin entirely lacks a major benefit that keeps pulling UW faculty away, since every other state and even all private campuses in this state offer it: free or at least discounted tuition for family members, which doesn’t cost those states and campuses anything for a seat in a class here, a seat in a class there. And it helps to keep some of the best and the brightest—and most likely to graduate and contribute to their economies—in those states there, as Wisconsin could do here.
So your statements simply do not help to suggest solutions about most government employees’ pay and benefits. Why keep ignoring differences in the marketplace that you claim to be addressing in MPeterson’s post? Why continue to claim that benefits here can compete in that national marketplace for that (very small) group of state employees? Or, if instead you’re really talking a different group of state government employees—the ones who get paid vacation, get collective bargaining to get better raises, etc.—then you really can’t use MPeterson’s apples as your starting point and try to reply with oranges.
That you continue to do so would suggest willing ignorance, but most of your other comments suggest willingness to learn and to focus on facts to find solutions. So what’s going on here in unwillingess to deal with the simple fact, pointed out again and again, that there are different types of government employees with different legal rights and thus different pay packages and different benefits in this state? Why suggest that the larger situation can be fixed by bashing a few thousand of them who work in a far different markeplace—and work for free in summers, with no paid vacation, to keep their jobs because they are so committed to teaching, like MPeterson?
Posted by .(JavaScript must be enabled to view this email address) on August 20, 2007 at 1410 hrs
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