Tuesday, February 28, 2017

Fact Check: Rauner Says AFSCME Is Highest Paid in U.S.

FACT CHECK: Rauner Says AFSCME Highest Paid Workers in the U.S.

A now-timely cartoon in the UTNE Reader years ago showed a grim-faced human resources manager behind a desk strewn with resumes and looking down on prospective applicant in a small wooden chair sitting before him.

HR Manager: You will be given an unbearable workload, your colleagues will harass and abuse you, any materials provided will be insufficient, there is no time off, you’ll never find advancement, vermin will bite your ankles, and you get health care.

Applicant:  Health care?  I’ll take the job!

So, what actually makes a job a worthy exchange for your labor?  Is it just the pay?

Novice Governor Bruce Rauner, who is girding up for his forced strike with the 38,000 AFSCME employees would drew a line in the sand concerning pay:  We have the highest paid state employees in America.  We need a fair system.” 

We can debate the beginner Governor’s concept of “fair” later, but do we really have the highest paid state workers in the country?  That’s an interesting claim.

According to a recent American Enterprise Institute for Public Policy released by Andrew Biggs and Jason Richwine, the answer is “not so much.”

The research “Overpaid or Underpaid?  A State-by-State Ranking of Public Employee Compensation” provides a detailed review of how the cumulative packages of benefits, salaries, pensions, security, and sundry other elements add up in the fifty states which utilize public unions to provide for the general welfare of their people.  It is clear from the onset that “highest paid” is a vague and nebulously emotional term. 

According to the authors, to say unequivocally that one state’s employees receive a higher or highest compensation is overly simplistic: “The compensation premium is not uniform across the nation. Many states pay government employees at market levels. Others pay huge premiums, and still others fall somewhere in the middle. Because there are large differences from state to state, broad generalizations and national-level analyses are not especially useful to the policymakers who must make budgetary decisions for their own states.”

Indeed, public sector workers like AFSCME in Illinois do not hold a “highest” or even “most expensive” position in terms of workplace benefits.

First, when we look directly at salary (Figure 1, p. 62) – as the Governor would adjure us to do – we will find as we always suspected that the dollar and cents premiums we provide our state workers fall significantly behind those working comparable jobs in the private sector.  Well, that is, unless you happen to reside in Connecticut.   Illinois does not lead the way, but public sector workers in Illinois certainly fare better than our neighbors in Indiana – a state that provides a model for Rauner’s Turnaround Agenda demands.  Indeed. There exists an almost 10% differential in Illinois wages in contrast to Indiana state employees.

But if you have job security (think tenure or due process), doesn’t that move the advantage needle for workers in the public sector?

We find also Illinois still does not outpace other states.  Note that in Fig. 13 – p. 74,  “Total Compensation differential versus comparable Private Sector Workers – Connecticut, New York, and Pennsylvania lead the way in double digit numbers when contrasted with Illinois.  We’re not only NOT the highest paid in Illinois; public sector workers like AFSCME fall significantly behind other states. 

In another later graph, throw in the added value of “Job Security” and those same states accelerate past Illinois, along with California, Michigan, New Jersey, and Rhode Island.

Finally, when we look at the same data but add in the values of a Defined Benefit, a Defined Contribution and/or a Pension, Illinois still does not exceed other states (Figure 3 – p. 74) .  In fact, the states in which public sector employees receive a greater or same “integrated value for a year’s work” include the following 19 other states: Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Louisiana, Missouri, Montana, New Hampshire, New Mexico, New York, Oklahoma, Pennsylvania, South Carolina, Texas, Utah, Vermont, and Wyoming. 

So, why the hyperbole?

Rauner’s long-standing beef with AFSCME (which he refers to as Af-Scammy) is not with their overpriced salaries, not at all.  It is the simple fact that they are a union, and especially a public sector union.  That is what aggravates him to blindness and pushes his administration into an unrelenting refusal to negotiate with the leaders of AFSCME – no different than with the state budget and the General Assembly.

The researchers went on to “show that state government employees in most states receive greater total compensation than similarly educated and experienced private-sector employees who work for large employers.

“Public-employee wages in nearly all states fall below those paid in the private sector, but fringe benefits – in particular health and retirement benefits – are significantly more generous in government than in the private sector. In addition, public employees in every state have greater job security than they would likely enjoy outside of government.”

As you may already know, Rauner believes the Illinois Labor Board’s unanimous November ruling of an impasse in contractual talks between his administration and the union renders additional discussion unnecessary.  Rauner expects only the implementation of his “last” offer. “The time for talking is over.”

AFSCME (the American Federation of State, County, and Municipal Employees) is seeking a court ruling, and has taken a membership vote on a job action, receiving an over-80% willingness to strike. 

Areas of disagreement included length of a work-week, increased health insurance coverage costs, freezes in salaries for four years, a merit pay system, and the administration’s plan to outsource work to private companies competing with the workers’ union through competitive bidding. 

In fact, reports indicate that Rauner and his staff are working feverishly to identify replacement workers when and if a strike does occur. 

Executive Director AFSCME Roberta Lynch
Executive Director of AFSCME Roberta Lynch is hoping that her rank and file’s strike response to Rauner’s intractability will serve some measure of incentive to the administration’s reconsider hammering out some commonalities. 

I personally hope a strike can be avoided, but it seems very doubtful to me.  Rauner is a man whose obdurate leadership, or lack thereof, has veered a state through half a dozen investor bond downgrades and an Everest of unpaid bills reaching beyond $12 billion.  His non-involvement in the Senate negotiations is an indication of his inability to lead, to embrace the concept of compromise, and to the toxicity he brings to any civil discussions.

Like his current business counterpart in the White House, he leads by generating conflict and crises.

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