Wisconsin Fringe Benefits Above Normal

Ouch… for the taxpayers of Wisconsin.

State-local government employees in Wisconsin received an average of $12,171 in fringe benefits in 2005, exceeding benefits for private sector workers by more than 50%. Public benefits cost Wisconsin taxpayers $4.62 billion in 2005, or an average of more than $800 per person. These are the key findings of the latest Wisconsin Taxpayers Alliance (WISTAX) study, “Public and Private Benefits in Wisconsin.” Celebrating its 75th anniversary, the nonprofit WISTAX keeps Wisconsin citizens informed through nonpartisan public-policy research.

In every state, public benefits are greater than those in the private sector. However, Wisconsin’s gap (50.1%) was much larger than the nation’s (34.9%). It was also larger than the gaps for all states bordering Wisconsin: Illinois (34.5%), Iowa (45.8%), Michigan (18.4%), and Minnesota (30.1%). The largest gap was in Oregon, where public benefits were nearly triple those in the private sector. If Wisconsin’s state-local employees received the same level of fringe benefits as the state’s private workers, Wisconsin governments would have spent $1.54 billion less in 2005, WISTAX said.

In addition to costing more, public benefits have also grown faster than private ones. From 2001 to 2005, Wisconsin’s public benefits per worker climbed 41.6%, or an average of 9.1% per year. Private benefits have also grown quickly (up 34.8%, or an average of 7.8% per year), but at a slower rate than public benefits.

1. Explain to me why our public employees have better benefits, pensions, salaries and vacations then their employers: Us?

   Posted by on April 30, 2008 at 2042 hrs




2. Our health care costs are above average too.  Could there be a direct correlation?

   Posted by on April 30, 2008 at 2044 hrs




3. Explain to me why our public employees have better benefits, pensions, salaries and vacations then their employers: Us?

   Because their employers, us, are being ripped off by our employers, them. 

   The business owners get richer while the average worker loses their benefits and the state worker enjoys their union protection.  The private sector employees carry the biggest burden in the system.

   Posted by on April 30, 2008 at 2100 hrs




4. 3rd Way talks about part of it, but the bigger part is that public employees make a heck of a lot less than their private sector counter parts.  That release tries to fool you into thinking they are on par with public employees because their wages have risen by 4% over the last 5 years while private employees have seen and average increase of 3.8%.  But that 4% is on a much lower average wage, and is in large part to public employees catching up after having to hold the line with 1 and 0 percent increases earlier in the decade,

   Local and state governments have been more than happy to pony up to feed public employee pensions because public employees in turn have agreed to take less in wages now.  It is actually the result of smart government and smart bargaining on the employees part.  Securing pensions for 30 cents as compared to having to ante up a dollar for wages now makes more sense for their constituents time and again.

   It is kind of sad that this report by the “non-partisan” Wisconsin Taxpayers Alliance is allowed to put out the results of their report without anyone taking a critical look at the total numbers behind the compensation packages they are talking about.

   The one area of some intellectual honesty that is there however, is the strain of health care increases on the cost of public employees on state and local government.  But I’m sure their solution is to just have public employees race to the bottom with the private sector and screw working people over even more by picking up a larger percentage of a ballooning tab.

   Posted by on April 30, 2008 at 2140 hrs




5. There has never been a study that shows that public employees are compensated at a lower rate than private employees.  To be polite, that is baloney.

   Posted by on April 30, 2008 at 2156 hrs




6. Lefty,

   I can’t imagine why anyone would choose to work for the poor pay and working conditions found in government when there are so many better opportunities to make more in the private sector.

   LH

   Posted by on April 30, 2008 at 2157 hrs




7. Yes and this goes to show there is no fat in the government budget everything is “trimmed to the bone” to quote one government official.
   What a joke.

   Posted by on April 30, 2008 at 2242 hrs




8. Never let it be said that WTA is non-partisan or unbiased.  Todd Berry has some definate shortcomings in those areas.  And no, that is not a joke about his height.

   Posted by on May 01, 2008 at 0750 hrs




9. Bottom line - what is going to be done about it? Absolutely nothing...like everything else.

   Posted by on May 01, 2008 at 0809 hrs




10. what is going to be done about it? 

    What do you think should be done about?  Lower the standard of living for more Americans?  How about we demand the same benefits from our legislators that we afford to them?

    Private sector employers in this country should catch up with the standards of the rest of the industrialized world and start providing health care for their employees.  If they are too greedy with their profits the government should make them.

    Share holders and business owners make conscience decisions; summer homes and maseratis or health care for their janitor’s kids.  Sales of maseratis are up and more and more kids go without healthcare.

    Posted by on May 01, 2008 at 0847 hrs




11. The lower annual pay argument for public employees doesn’t really apply for the majority of jobs available in society.

    Certainly as a State worker you are capped out from making ridiculous salaries like CEO’s make.  And you don’t have stock options etc.  But those type of things aren’t available to most private sector employers either. 

    The average guy who can work at a factory or work at the DNR probably are in the same pay range.  The difference is that the DNR is going to allow him to have tremendous health benefits and a lifetime pension.  Those lifetime defined benefit pensions have just about been completely eliminated in the private sector. 

    My relative is a retired MPS administrator who has a pension that guarantees him about $70,000 annually here in retirement with COLA adjustments.  Do you guys know how much after tax dollars you need to save in a private sector job to accumulate enough money to guarantee yourself $70k a year for as long as you live?  It is a crazy number.  Add in the gold plated health care benefits and it is an amazing package.

    General Motors is going down right now because of the amazing defined benefit and health packages they promised all their workers.  Those lavish benefits don’t stand up in todays competitive economy.  They can’t afford them and stay in business.

    The State of Wisconsin will be the same here in the coming 10-15 years.  It would be wonderful if all workers public and private could get these huge benefits.  But the market doesn’t work that way.  This issue is going to be the single largest problem holding back the State of Wisconsin from economic growth compared to our counterparts.

    Posted by on May 01, 2008 at 0849 hrs




12. People attracted to government service want to either change things, ususally more pro-gvoernment, or have little amibition to be entrpreneurs or have their own business.  They like the womb.
    Bascially in government you have two types of people serving: the big government liberals and the big government Republicans.  The lobbyists are always intereted in spending more money on their projects.
    As one state sentor told me on night, late at night, at a state convention for the GOP: “I always vote for the special interests cause they never forget.  The taxpayers forget in two months”.  Occasionally you will have leaders come by like John shabaz, Harodl Froehlich and a few other over the last 40 years that fight that mold.  They get hammered like Tom Reynolds did, the GOP to lose the state senate for possibly a decade, cause of the back stabbers that run it.
    if we point out the difference in pay for the private sector and the public sector, every study shows the public sector much better, eventually the people will rebel.
    For example, a WPRI study showed that teachers with bachelors degrees get about the same pay as other people in private jobs with the same education.  Compare nurses salaries to teachers salaries and they are very close.  But, nurses have to work lousy hours do not have pensions, they have 401k’s, have far less vacations and have to pay for their own beneifts partially.

    if we keep hammering on this the worm always turns.

    Posted by on May 01, 2008 at 0850 hrs




13. 3rd way has no concept of what is happening in a global economy.  Those forces far supercede the power of any goverment to regulate.
    Look at where most of our industrial plants are going, world wide business, worldwide maufacturing.  A product is desgined in one country, financed in another, parts are made all over the world, assembled in another country and then shipped to all countries.
    To think that you can wave a magic wand and stop this is only the idiocy believed by Barack Obama. Why do you think that maufacutring jobs are leaving Wisconsin?  Look at Harley, Briggs etc.  The fairy tale legislators in our state beleive that we can tax our way to prosperity and spend more on welfare like Badger Plus and we will thrive.  Sorry gang, it doesn’t work.

    Posted by on May 01, 2008 at 0909 hrs




14. I have a damn good understanding what is happening in America and the rest of the world.  The American worker is getting screwed while the moneyed class is laughing all the way to the bank.  The chasm between rich and poor is growing at an alarming rate.  Your solution is to bring down the standard of living of all americans to make the American work force competitive with that of the worker in a third world country. 

    I have worked in China and seen the standard of living for an average teacher and lived in Europe and seen what sort of standard of living is provided when a government works for the people instead of for the corporations.  We have more wealth and opportunity than both of those areas, yet you want to bring the standard of living for the worker down to the level of China when we can demand more and bring it up to the level of the Europeans.

    I don’t think you understand how swayed our system is towards the top 1%.  The amount of wealth held by the people running this system is staggering.

    Posted by on May 01, 2008 at 0926 hrs




15. 3rd Way said; “I don’t think you understand how swayed our system is towards the top 1%. “

    I’ve been reading “The Trillion Dollar Meltdown” by Charles Morris.  It is a hard read (the quote below gives you an idea how hard), but I was just at the page where he discusses that 1%.  Sorry about the length and detail, but I this is what 3rd Way is getting at.

    (Somewhere else I read that the distribution of incomes used to be like a bell curve with the middle class being the “hump” but with current trends, it will look more like a boa constrictor -it will be a pretty flat curve until you get to the mouth that is swallowing a large mammal.)
    
    

    One of the most striking developments over the past quarter-century is the dramatic shift of taxable incomes towards the wealthiest people.  Between 1980 and 2005, the top tenth of the population’s share of all taxable income went from 34 percent to 46 percent, an increase of about a third.  The changing distribution within the top 10 percent, however, is what’s truly remarkable.  The unlucky folks in the 90th to 95th percentiles actually lost a little ground, while those in the 95th to 99th gained a little. Overall, however, income shares in the 90th to 99th percentile were basically flat (24 percent in 1980 and 26 percent in 2005).

    Almost all the top one-tenth’s share gains, in other words, went to the top 1 percent, or the top “centile”, who doubled their share of national cash income from 9 percent to 19 percent.  Even within the top centile, however, the distribution of gains was radically skewed.  Nearly 60 percent of it went to the top tenth of 1 percent of the population, and more than a fourth of it to the top one-hundreth of 1 percent of the population.  Overall, the top tenth of 1 percent more than tripled their share of cash income to 9 percent, while the top one-hundreth of 1 percent, or fewer than 15,000 taxpayers, quadrupled their share to 3.6 percent of all taxable income.

    Posted by on May 01, 2008 at 1054 hrs




16. Thanks for the statistics mht.

    Of that top one-hundreth of 1 percent the vast majority of their income is acquired as capital gains and taxed at a lower rate than the earned income rate most of us pay. 

    I don’t understand how anyone can defend the interests of billionaires over the interests of children without healthcare.

    Posted by on May 01, 2008 at 1202 hrs




17. Children without healthcare would have healthcare if their parents had jobs or we had jobs coming into the state instead of leaving.
    The choice is clear, adopt polices that grow Wisconsin and create jobs or create more welfare and see a declining tax base.

    Posted by on May 01, 2008 at 1332 hrs




18. I think Lefty nailed it way upstream.  What the article doesn’t say is that higher benefits are usually a negotiated item in exchange for lower wages.  I’m a little surprised to find so many people here dismissing the idea out of hand.  I thought it was common knowledge that government employees often make less than their private counterparts, but have great benefits.

    That certainly was the case when my ex-wife worked for the state of Wisconsin.  Great benefits there, but when she left she walked into a 30% pay increase for the same job.

    Posted by scott on May 01, 2008 at 1402 hrs




19. One job change means nothing, studies hve shown them, public emploees, to be above compensation for the same level of education

    Posted by on May 01, 2008 at 1413 hrs




20. I think you can get a better perspective by looking at the whole article.  The bold emphasis is mine.

    The rapid growth in the cost of fringe benefits has important consequences. One, according to WISTAX, is that it limits salary increases. From 2001 through 2005, total compensation per worker rose at similar rates in Wisconsin’s public (4.0% per year) and private (3.8% per year) sectors. However, while public benefits per worker rose 9.1% per year during these years, private benefits rose less—7.8% annually. The faster growth in public benefits led to slower increases in public wages and salaries (2.4% per year) compared to those in the private sector (3.0%).

    In this vein, WISTAX researchers noted that rising health insurance costs have had a negative effect on Wisconsin teacher salaries. State law requires school districts to increase total compensation at least 3.8% annually. When benefit costs rise 9% or more, there is little room left for salary growth.

    Posted by on May 01, 2008 at 1418 hrs




21. We can agree that tax reform is necessary, and that we need to have a business friendly tax structure.  But we are approaching the problem from two different angles.  I look at the solution being based in what is going to create the most good jobs that will create the best quality of life for the most people, you seem to look at it the solution being based in whatever will create the most profit.

    I would prefer to see taxes on business at or near zero and for the the lost revenue to be made up on the capital gains income brought home by individuals.  We should encourage business owners to leave their profits in their businesses where it can be used to grow the business and hire more people.  This will never happen because it will result in less after tax income for the people that take the most home. 

    adopt polices that grow Wisconsin and create jobs or create more welfare

    I haven’t seen anyone proposing more welfare.  You guys seem to be suggesting public employs don’t deserve the benefits they recieve.  If I was a policeman or fireman I would resent your characterization of my well deserved benefits as “"welfare".

    Posted by on May 01, 2008 at 1425 hrs




22. studies hve shown them, public emploees, to be above compensation for the same level of education

    Really?  I’d like to see those studies. 

    I suppose it may vary depending on the kind of work you do, but I’m betting state-employed accountants don’t make what private accountants make.  And I’m betting that state-employed computer programmers don’t make what private ones make. 

    It’s the same way in my industry.  I work in higher ed.  People who do what I do for, say, the banking industry, probably get paid 20-20% more than I do. 

    But I get free tuition at the university for me, my spouse and all my kids.

    Posted by scott on May 01, 2008 at 1428 hrs




23. Do some research and you will find a million studies.  The crocodile tears of the teachers and the public employees are pure baloney.  The cost of their beneifts is rising and forcing out their salary raises cause they want the Cadillac health plans.  They refuse to pay into their pensions like the rest of us do with 401k’s and they refuse to give up the myriad of holidays and big vacations that none of us get anymore.  It’s all BS.
    Everyoe sites some person that they know in some indivudiual case and that doesn’t hold water.
    Check the WPRI study on teachers salaries and quit being crybabies.

    Posted by on May 01, 2008 at 1436 hrs




24. Translation of the above comment: I don’t have any such studies or links. 

    Teachers are an entirely different ball game, which is why I specifically didn’t mention them.  K-12 education is a largely publicly financed operation, nationwide.  There simply isn’t a private enterprise of similar scale to compare it to. 

    I’m sorry, but it’s a fact that public employees have--for good or ill--usually negotiated concessions on salary increases in exchange for those other benefits that you decry so loudly and frequently.

    Posted by scott on May 01, 2008 at 1448 hrs




25. Anyone who haas even the slightest knowledge of computers can google Public empolyee salaries, then public employee benefits.  There are a million studies.
    If you want Cadillac pensions, benefits and vacations you should not also get top salaries and I’m afraid they do except at the top most levels.

    Posted by on May 01, 2008 at 1528 hrs




26. yone who haas even the slightest knowledge of computers can google Public empolyee salaries, then public employee benefits.  There are a million studies.

    Sweet!  So it’ll be no problem for you to find us, say, three of them that back up what you’re saying.

    Posted by scott on May 01, 2008 at 1536 hrs




27. Mark Belling (http://www.belling.com) has a link that enables one to look up any public school teacher/administrator salary. A small niche, but a niche notwithstanding.

    Posted by on May 01, 2008 at 1600 hrs




28. I think i’ve already conceded that educators are a different case.  Next?

    Posted by scott on May 01, 2008 at 1604 hrs




29. Sweet!  So it’ll be no problem for you to find us, say, three of them that back up what you’re saying.

    He probably doesn’t want to be anyone’s “Google Bitch"… right?

    Posted by on May 01, 2008 at 1617 hrs




30. I’m willing to back up my claims, Jason --as long as the other party is acting in good faith, and is willing to be swayed by evidence.  If they’re not at least in principle open to being swayed by evidence, then there’s no point in bothering. 

    Me, I’m wiling to be swayed.  Show me I’m wrong and I’ll admit it.

    Posted by scott on May 01, 2008 at 1630 hrs




31. Two follow up points to a good debate:

    Even if the government worker makes say $60,000 in a job where the private sector guy makes 25% more or $75,000, the private sector employee only gets a 401(k) with minimal employer contributions. 

    It is a tall order to use that extra $15,000 in pay after taxes are accounted for to accumulate enough savings to produce a retirement portfolio that will allow for a $50,000 to $90,000 a year in guaranteed earnings similar to what the State workers get with their pensions. 

    And because the State workers have the great health insurance that carries into retirement (unlike the $75,000 a year private sector guy above) they usually can’t afford to retire before age 65 for insurance cost reasons until medicare kicks in. 

    Think of all the State employees who we hear about retiring at age 53, 55, 60.  You just can’t do that if you are that private sector guy. 

    The arguments by 3rd Way and MHT are important discussions.  I have no great arguments with their points about the disparity of incomes being a major social problem now and in the future.  But the horse is out of the barn with global trade.  It is a global economy and we have to either compete with it or turn to the socialism of Europe and start with major protectionism. 

    The State of Wisconsin will be left behind in the dust if we don’t figure out how to encourage competitive business here that produces real jobs that can support families.  Otherwise the only jobs left will be Wal-Mart greeters for our northwoods tourists or State employees.

    Posted by on May 01, 2008 at 1834 hrs




32. Screw Mark Belling and his link to education salaries, go to MJS “Data on Demand” for links to City of MKE, MKE Co, State of WI, & Suburban Municipal Employe wages.:

    http://www.jsonline.com/index/index.aspx?id=200

    Problem is, doesn’t do much good for comparative purposes, until they start posting private sector positions, which isn’t going to happen.

    Posted by on May 01, 2008 at 1835 hrs




33. Dohnal opined,

    People attracted to government service want to either change things, ususally more pro-gvoernment, or have little amibition to be entrpreneurs or have their own business.  They like the womb.

    Bascially in government you have two types of people serving: the big government liberals and the big government Republicans.  The lobbyists are always intereted in spending more money on their projects.

    In what industry do you work Dohnal? I ask so that I may follow your example and make unfounded assumptions about people who enter it, as you do mine.

    There are a lot of different reasons to enter government work. Plenty of people with no entrepreneurial spirit enter the private sector and remain stuck in lower tier jobs until they’re show the door.

    I for one entered government service because it’s challenging. It’s more interesting to see how to make a program work with limited resources than I imagine it would be to figure out how to make more profit by selling useless plastic crap that people don’t really need. You might even say I am entrepreneurial in my job, as I am constantly seeking new ways to do things with the limited resources we have, which is rewarding because as a fiscally conservative taxpayer I want that challenge.

    Oh and like a lot of other public sector employees I’ve moved between private and public and likely will again.

    I’ll just add this proclamation to others you’ve made that had no basis in fact. Remember when you claimed Waukesha County has an equalized value nearly equal to Milwaukee? You never have backed that up.

    For the rest of you, our guaranteed benefits are, in my opinion, excessive. As a non-represented employee I don’t get all the benefits and all the protections; and as a relatively new employee I’m not entitled to what older employees were able to secure. However, I believe on average us public workers’ salaries have now matched those in the private sector because globalization has depressed private sector wages to the point we’ve caught up. And yes, that’s because we don’t really have to worry much about our revenues because our customers don’t have a lot of choice.

    A great source on this is the Employee Benefit Research Institute (EBRI). Lots and lots of statistics.

    Posted by on May 01, 2008 at 2051 hrs




34. Think of all the State employees who we hear about retiring at age 53, 55, 60.  You just can’t do that if you are that private sector guy.

    53?  Shit… Become a cop.  Full pension after 20 years.  And you can start the clock ticking at 18 even though you can’t be a cop til 21, but if you are doing some other jr.work with the department your service counts to your 20.

    There are cops retiring at 40 years old with a FULL pension who are idiots if they continue to work.  They quit, get their full pension and take another job and work their next 20 years collecting a full pension and another full time salary.  I personally know cops who are retired in their 40’s making over $150,000 a year with their pension and their regualr job,

    I didn’t ask, but I think they get social security too when they reach age.  Good gig eh?  I wouldn’t begrudge anyone anything they could garner on the open market, but given the taxpayers are footing the bill for this shit… I have an issue with it.

    The American worker is getting screwed while the moneyed class is laughing all the way to the bank. 

    I don’t buy this. 

    The chasm between rich and poor is growing at an alarming rate.

    This is a bullshit statistic.  Yes the really rich are getting ‘really richer’.  There’s a lot of people getting richer.

    But the middle class is not shrinking.  In fact, most people are moving up in the middle class. 

    The standard of living and income of middle class americans is in good shape.  Not withstanding the economic slow-down of the past year, the middle class is alive and well, and in fact, has never had it so good.

    So stop the class warfare and stop tossing around conjecture.

    Yes, the wealthy class is growing, but its not at the expense of the middle class.

    If you’ve got some kind of evidence to support the middle class ‘struggling’ or losing people to poverty, please post it here.

    Your solution is to bring down the standard of living of all americans to make the American work force competitive with that of the worker in a third world country.

    Posted by on May 01, 2008 at 2057 hrs




35. oops, that last paragraph was part of a quote that i cut and pasted and forgot to delete.

    Posted by on May 01, 2008 at 2121 hrs




36. And because the State workers have the great health insurance that carries into retirement (unlike the $75,000 a year private sector guy above) they usually can’t afford to retire before age 65 for insurance cost reasons until medicare kicks in.

    Don’t the State employes who retire early have to pay for their health insurance, unless they have unused sick leave to credit against it?  I thought that was the issue with the elected state reps accumulating 100% of their sick leave credits & never showing any taken.

    This is one thing I found related to health insurance for State employes - anyone know how these charges compare State versus private?

    http://etf.wi.gov/publications/et8902.pdf

    EMPLOYEE SHARE OF PREMIUM
    • The employee share of premium contributions for most employers is based on the following tiering
    structure:
    • State: (not including UW graduate assistants and short-term academic staff)
    Single Family
    Tier I $27.00 $68.00
    Tier II $ 60.00 $150.00
    Tier III $143.00 $358.00
    • State: UW graduate assistants and short-term academic staff:
    Single Family
    Tier I $13.50 $ 34.00
    Tier II $30.00 $ 75.00
    Tier III $71.50 $179.00
    • Retirees: No employer contribution. State employees’ sick leave credits can offset premium

    Posted by on May 01, 2008 at 2129 hrs




37. Shoot, this isn’t news. In Brookfield the staff screeched about “public sector wages” but would never own up to a comparison that included pension, health care and vacation benefits.

    It’s a scam all across the system, from “educators” to mayors who slander opponents to be vested in the state plan.

    Posted by Cindy on May 01, 2008 at 2213 hrs




38. Well, in my private sector job my salary has increased about 1.8% per year for the last 5 years and my benefits have gone down every year.

    Posted by on May 02, 2008 at 0834 hrs




39. As has been pointed out earlier, Erich, the plural of anecdote is not data.

    Posted by scott on May 02, 2008 at 0840 hrs




40. XX - You are being combative for the sake of combat.  My comment about lowering standards of living for the American worker is in the context of people claiming state workers recieve benefits they don’t deserve.  The logical extension of their argument that we are paying too much for their benefits would be that we need to repeal them.  Call me crazy, but I believe that if someone works forty hours a week they deserve healthcare and sometime off.  Every other comparable industrialized country on the globe mandates this, except this one.

    It isn’t fair that we pay above average benefit costs in this state and something should be done about it.  I would be willing to wager that a big part of the reason our benefit costs are above average is due to our healthcare costs being above average.  If someone knows how we can get Aurora to stop charging more than the market rate in other states I would love to hear it.

    I agree that we shouldn’t be providing defined pension plans for any state employee.  The world has changed, if pension plans have become extinict in the private sector they should become extinct in the public realm.  We are all in this together, we can’t have 2 different classes of workers (those that can retire and those that can’t).  They should all have salary bumps and fixed contributions into 401K plans like the rest of us.  It is not fair that state employees are able to retire mid-50 while the rest of us have to work an additional 15 years to pay off their retirement package.

    As for your skepticism about the growing gap between rich and poor.  I didn’t intend to bring up stagnant wages of the middle class, but since you asked check out this article from that lefty rag, the Wall Street Journal.

    http://online.wsj.com/article/SB120856310119627911.html ?mod=googlenews_wsj

    Adjusted for inflation income of the bottom 90% of earners has fallen 4% during the Bush administration, it has risen 22% for the top .01%.  Cutting taxes for this group and keeping their capital gains taxes lower than it was during the Reagan administration is a bad idea.  McCain is going to lose because of his support for that bad idea.

    Posted by on May 02, 2008 at 0951 hrs