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Are State Workers Overpaid?

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Are State Workers Overpaid?

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LOS ANGELES, CA - FEBRUARY 10: Unemployed construction workers demonstrate outside the district office of Assembly Speaker Karen Bass, D-Los Angeles, on February 10, 2009 in Los Angeles, California. Failure of the Legislature to pass a state budget has led to an estimated 20 percent unemployment in the industry as the California Department of Transportation (CalTrans) announced last week that it is suspending work on more than 100 projects statewide unless local agencies can find other ways to fund the projects. (Photo by David McNew/Getty Images)

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From coast to coast, state and local government elected officials have targeted civil servant pay as a cornerstone of budget deficits.

The thinking goes, there are too many and they make too much. If we just cut their pay and reduce their benefits, we'll be well on the way to balancing budgets.

Taking a budget cleaver to state employees has an intuitive appeal. What do those guys do all day, anyway? But the claims of excessive pay and bloated numbers are just not true.

According to a recent study published by two U.C. Berkeley economics professors, civil servants in California make on average of seven percent less than people with similar jobs in the private sector. Once health and retirement packages are factored in, the study continues, state employees earn about the same pay as their private sector peers.

As to the numbers of state employees, many people believe that there are way too many for what needs to be done. This also makes sense, yet two studies--one by the Census Bureau and the other by Governing magazine--find that when examined on a per capita basis, California ranks 48th in state employees. In other words, this state has the third leanest bureaucracy in the nation.

Neither of these data points will be welcome by people who simply believe that government is too costly and too wasteful. And it goes without saying that of the three hundred thousand or so state employees, surely someone must be overpaid and/or working in a position that's not needed.

But as generalizations go, the facts suggest state employees are neither overpaid nor excessive in numbers.

This is not to say that governments shouldn't revisit such issues as pension reform or health care costs; they should just as that has been done in the private sector.

But governments need to be sure that their changes to employee packages are not overdone.

Cutting state employee pay too much may feel good in the short term, but things will be even worse without adequate staffing at the DMV, forests, CHP patrols, CalTrans and the myriad other departments that serve Californians. If we take away too many of these civil servants and/or discourage their working environment, California may well write a new chapter on inefficiency. And that has its own costs.   

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