The Bureaucratic Pecking Order
Dan Mitchell, a tax reform expert at the Cato Institute, has a chart at Big Government today that he says “tells you everything you need to know about state and local government pay.” He writes:
“The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.
“This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.
“Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.”
He then provides the following chart based upon data from the Bureau of Labor Statistics.
Mitchell writes this about the above chart:
“This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.”
In addition, Mitchell provides the following You Tube video produced by the Center for Freedom & Prosperity:
He points out the “video looks at all of the data and reveals a pecking order. Federal bureaucrats are at the kings and queens of compensation. State and local bureaucrats are like the nobility. And private sector taxpayers are the serfs that worker harder and earn less, but nonetheless finance the entire racket.” Mitchell closes by writing:
“The video closes with a very important point that the right pay level for many bureaucrats is zero. This is because they work for programs, departments, and agencies that should not exist."
The video is just under 7 minutes, and is well-worth watching. In addition, you may want to read this Tax & Budget Bulletin about employee compensation in state and local government (requires Adobe), written by Chris Edwards of the Cato Institute. We growled about it on January 7, 2010.