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Dear Government Unions: We’re Not Making This Up

Posted By William Beach On October 25, 2010 @ 12:13 pm In Economics | Comments Disabled

[1]

We were a little taken aback the other day when Joe Davidson’s “Federal Diary” column in The Washington Post [2] quoted a top White House appointee and two union leaders attacking our research findings that federal workers get paid more than private sector counterparts as “lies,” “misinformation” and — oh my — “scapegoating.”

We got in touch with Mr. Davidson to voice our disappointment that he would print such scurrilous charges [2] about Heritage analysts — who put the cost to taxpayers at over $40 billion a year — without extending us the courtesy of an opportunity to comment or rebut. To his credit, he listened and invited us to put our concerns in writing. And so I wrote to Mr. Davidson, providing helpful links to relevant documents [3] posted at heritage.org but also asking outright: “Are you saying that Heritage’s analysts made up their results?”

After some back and forth, he was kind enough to publish as a letter in Friday’s “Federal Diary” an edited, 160-word version [4] of the 355 words I’d deployed to take issue with the quoted remarks by John Berry, director of the Office of Personnel Management, and leaders of two public-employee unions: William R. Dougan, president of the National Federation of Federal Employees, and Matthew S. Biggs, legislative director for the International Federation of Professional & Technical Engineers.

I’m thankful that Mr. Davidson chose to publish what he sees as a fair condensation of Heritage’s side of the story. It seems fitting to post the original here, though, especially since the bureaucrats and union bosses were given well over 300 words in his Oct.18 column to disparage Heritage’s work. So here it is:

Dear Mr. Davidson:

Heritage Foundation research shows that federal workers earn significantly more than private sector workers with comparable skills. We employed state-of-the-art data and statistical methods to arrive at this conclusion.

Your Federal Diary column in Monday’s editions of The Washington Post (“Dissatisfaction in federal employee pay sign of disconnect”), however, quoted government officials and leaders of public sector unions dismissing our research as “lies,” “misinformation” and “scapegoating.”  Are you saying that Heritage’s analysts made up their results?

Most discouragingly, we were not given a chance to comment even as the union leaders and government officials were given free rein to mischaracterize our work.  Had you asked us, readers would have learned that most academic economists, regardless of their politics, agree that federal workers enjoy a substantial wage premium. In fact, Alan Krueger, President Obama’s choice as chief economist at the Treasury Department, came to just that conclusion in a report [5] published in 1988.

What’s more, the authoritative Handbook of Labor Economics [6], surveying the extant literature, describes the federal premium in cash wages as between 10 percent and 20 percent.  The Heritage Foundation followed established methods for analyzing pay differences between government and private sector workers. Our analysts, primarily James Sherk and Jason Richwine of our Center for Data Analysis [7], updated that literature using the most recent data available. Our results are in line with previous findings.

Ignoring all of this evidence, the government and union representatives quoted in your column attack our findings by relying on a pay survey that examines job descriptions.  However, federal workers tend to be less skilled than private workers within the same occupation level—for example, a senior accountant in government may qualify only as a junior accountant in the private sector. This tendency makes the pay survey essentially useless for comparing federal and private workers.

As a result, economists look at workers’ skills and experience when analyzing pay—not just official job duties. These analyses show federal workers earn significantly more than their private sector counterparts. Economists have known this for years.

We’re sure you’ll agree that The Post, if not government officials and union representatives, should be up to date.

Sincerely,

William W. Beach

Director, Center for Data Analysis

The Heritage Foundation

* * *

In an earlier “Federal Diary,” incidentally, Mr. Davidson reported President Obama’s apparent admission [8] in a recent interview that less-skilled federal workers are overpaid:

Obama deflected complaints from Republicans on Capitol Hill and conservative think tanks that federal employees are overpaid. He said his team has examined pay levels, “and the data we get back indicates that high-skilled workers in government are slightly underpaid. Lower-skilled workers are slightly overpaid relative to the private sector.

“And that’s not surprising,” he added, “because it’s a unionized workforce” in government, while the private sector’s typically is not.

To check out some of the resources to which we directed Mr. Davidson, see this paper [7] by Heritage analysts James Sherk and Jason Richwine, a commentary [9] by Sherk in USA Today, an op-ed [10] in The Wall Street Journal co-written by Richwine. And we certainly hope the union reps didn’t miss Richwine’s easy-to-follow take [11] on CNBC’s “Kudlow Report.”

Ken McIntyre [12], Heritage’s Guardabassi fellow in media and public policy studies,  contributed to this post.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/10/25/dear-government-unions-we%e2%80%99re-not-making-this-up/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/federal-pay.gif

[2] The Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2010/10/18/AR2010101805719.html

[3] relevant documents: http://www.heritage.org/Research/Reports/2010/07/Comparing-Pay-in-the-Federal-Government-and-the-Private-Sector

[4] an edited, 160-word version: http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102106617.html

[5] a report: http://www.nber.org/chapters/c7910.pdf

[6] Handbook of Labor Economics: http://www.amazon.com/Handbook-Labor-Economics-3A-Handbooks/dp/0444501878

[7] primarily James Sherk and Jason Richwine of our Center for Data Analysis: http://www.heritage.org/Research/Reports/2010/09/Federal-Pay-Still-Inflated-After-Accounting-for-Skills

[8] apparent admission: http://www.washingtonpost.com/wp-dyn/content/article/2010/10/15/AR2010101504204.html

[9] commentary: http://www.heritage.org/Research/Commentary/2010/07/Government-jobs-Bloated-pay-benefits-cost-us-all

[10] op-ed: http://www.heritage.org/Research/Commentary/2010/07/The-Government-Pay-Bonus

[11] easy-to-follow take: http://www.heritage.org/Multimedia/Video/2010/07/Richwine-CNBC-7-6-10

[12] Ken McIntyre: http://www.foundry.org/?author=13

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