Building an Economy that Works for Everyone

Lessons from Wisconsin: Building a stronger middle class

From the Everett Herald:

john burbank

John Burbank, Executive Director

The other night I had a chance to talk to students and faculty at Seattle Central Community College. We discussed the lopsided equations of income and wealth which have become the norm in our state. The people and businesses now benefitting from the status quo are quick to promote the notion that public employees are overcompensated. They want to drive a wedge between public servants and underpaid private sector employees.

That’s an upside down conversation. What we should be doing is encouraging workers to demand better wages and benefits in the private sector. The money is there. Corporate profits are at an all-time high. Our state’s wealthy are getting wealthier.

Don’t believe me? Steve Ballmer’s net worth is $14 billion. Jeff Bezos checks in at $12.6 billion and growing. Paul Allen has $12.7 billion. These guys are dabbling in commercial space hobbies, science fiction museums, and stomping on I-phones. They also funded the campaign to defeat the initiative for a tax on the wealthy. (I wonder why?!)

Wages for public sector workers, on the other hand, are not so great. Compare a faculty member at Everett Community College to Ballmer, for example. Ballmer got a BA from Harvard, and dropped out of the Stanford business school to join Microsoft. A professor with more education — a master’s degree and 15 years teaching experience — made a little more than $52,000 last year at Everett Community College. The highest paid faculty at Everett made slightly under $65,000.

One way the state has lowered costs at community colleges is to substitute part-time faculty for full-time faculty. They don’t get the same benefits, and their pay is a notch below. A part-time faculty member working full-time (which many of these people have to do, jumping from one community college campus to another, sometimes in the same day) earned $36,000 in 2009.

But maybe, you might suppose, these faculty members have gotten big increases in pay over the past decade, unlike typical private sector workers.

Nope. In 2000, at Everett, full-time faculty members received on average a little more than $51,500 (adjusted for inflation). So over the past decade, part-timers made out a bit better — though they started at a much lower point. In 2002 they made a full-time equivalent of $31,500 (again adjusted for inflation). So their compensation has gone up by about $4,600 over six years, or about 2 percent a year.

OK, so faculty salaries are not exactly earthshaking. Maybe tuition has been kept down over time.

Wrong again. Since 2000, inflation-adjusted annual tuition has gone up 50 percent, from $2,000 to more than $3,000. And next year it will go up again, at least another 7 percent.

Salaries are flat and tuition is up. It only makes sense when you look at the state budget for community colleges. State funding per student has dropped by 15 percent in just the past two years. It is now about $4,500 a year and falling. Tuition makes up the difference.

Let’s look at compensation a little more. If you are a public sector employee, the more educated you are, the more likely you could earn a higher salary in the private sector. And conversely, the less education you have, the more likely you will get a relatively decent wage in the public sector. And that is a good thing.

For example, across the United States, janitors make about $22,500 in the private sector, $25,700 in state government, and $28,000 in local government. None of these are stellar wages. But the public janitors get a little more, and are more likely to have health and pension coverage. As their wages are pushed slightly up, the salaries of the better-paid professional public employees fall behind those of comparable workers in the private sector. In other words, instead of pulling people apart, government pay scales have helped create a larger middle class.

That’s why when you attack public employees, you are attacking the middle class. And that’s why, instead of tearing down public employee compensation packages, we should figure out how to make private-sector wages and benefits more like public sector compensation.

A little money would have to be shifted from the corporate coffers and very wealthy — not only in taxes to fund government services and public servants, but also in wage and benefit distributions to private-sector workers. That will only happen when workers find a voice and organize. When they do, it won’t be a tea party.

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