Government workers very well-paid: no kidding

David Denholm, who is the president of the Public Service Research Foundation, recently analyzed data from the U.S. Bureau of Labor statistics and reported his findings in the Heartland Institute’s Budget & Tax News.

All those who labor under the current high tax burden are not shocked at this sentence: “Growing evidence shows government employees are highly compensated as compared with their counterparts on private payrolls.”

This is stunning – but again, not surprising: Emphasis is ours.

The U.S. Bureau of Labor Statistics reports that in 2005 median weekly earnings for full-time government workers averaged $758, compared to $625 for those in the private sector. Those figures are from the Current Population Survey.

Another view can be seen in the Bureau of Labor Statistics National Compensation Survey, which reports that in the first quarter of 2006 the cost of compensation per hour worked for state and local government employees averaged $36.97 compared to $25.09 for private industry workers.

That’s an overall difference of 47.3 percent. The difference in costs of benefits is much greater than the difference in wages and salaries.

Denholm elegantly outlines how the game works as taxeaters seek ever more dollars from taxpayers (note – the words in that last sentence are ours – as we said, Denholm’s writing is elegant, not street-brawler).

Instinctively we know these facts – but thanks to David Denholm and the Heartland Institute we can see the math nicely illustrated.  Again, the emphasis is ours.

High Taxes, Higher Raises

Consider two households–one with a private-sector worker and one with a local government employee–with equal incomes of $40,000. Assume state and local taxes are approximately 10.5 percent of income.

If the local government imposes a 4 percent tax increase to fund a 5 percent pay increase for government employees, both families face an increased tax burden of $168 ($40,000 x .105) x .04 = $168.

But the government employee’s household would also anticipate a $2,000 pay hike ($40,000 x .05 = $2,000), for a net gain of $1,832. A $1,832 gain likely would provide greater motivation to walk precincts, stuff envelopes, contribute money, and turn out on Election Day than the expected $168 increase in taxes.

Let us wrap up this short political science lesson: next time you are solicited for a campaign contribution by a useless Republican officeholder running for reelection, or for that matter, by a Republican candidate who is running for office for the first time who has the endorsement of public sector unions like ASCME, the IFT, or the IEA, say “no.”

Let the taxeaters send checks to those Republicans who are just a part of the problem.