An unsustainable disparity in wages
By
Rory Ryan-hcpress@cinci.rr.com
It has been, to the best of my knowledge, three years since any Highland County medium published the salaries and wages of some of the higher-paid public officials in Highland County.
In 2008, with the assistance of local auditors, school treasurers and various public finance officials, Brandy Chandler and I compiled these labor statistics for the 2007 calendar year. Much has happened, economically speaking, in the ensuing three-year period, not only in Highland County, but across the state and nation. Most of it has not been good.
Just this week, The Associated Press reported that “Not since World War II has the federal budget deficit made up such a big chunk of the U.S. economy. And within two or three years, economists fear the result could be sharply higher interest rates that would slow economic growth.”
And, as pointed out by Congressman Mike Turner, President Obama has sent Congress a budget proposal that projects a record deficit of $1.65 trillion this year, almost 11 percent of the country’s $14 trillion economy — “the largest proportion since 1945, when wartime spending swelled the deficit to 21.5 percent of U.S. gross domestic product,” the AP reported.
In a recent town-hall meeting with Sen. David Daniels and Rep. Cliff Rosenberger, the lawmakers noted that it would behoove all those in public office to be prepared for potential cuts in state funding. While the private-sector has made significant reductions in payroll and many jobs have altogether disappeared, the local public sector has, relatively speaking, remain unscathed. In recent conversations with some public department managers, they have acknowledged as much. “It’s just the system,” some have said.
Not always. Sometimes, it’s just abuse and lack of oversight within the system.
Consider: In 2007, the unemployment rate in Highland County was 5.6 percent. In 2010, the jobless rate peaked at 19 percent and closed the year at 14 percent (and these numbers do not reflect those whose unemployment benefits have expired). Meanwhile, many public servants on the local, state and federal levels kept right on enjoying pay raises, great benefits and tremendous retirement packages. Something’s got to give. (Besides the taxpayer.)
In his column this week, Ohio Rep. John Carey said “Ohio has to save money. There is no other option. With a 17-percent decline in revenues and an $8 billion budget hole to fill, our state needs to provide services in a more efficient manner.”
The same applies across all levels of government.
In looking at the local public wages, we will leave it to readers and taxpayers to determine if the overall system is working as intended, or if it’s time to modify “the system.”
As always, and as I wrote a few years ago, collecting the public information was a bit of an exercise in and of itself. The last time we made this request no less than three public entities in Highland County asked us to put the request in writing. Ohio law does not require such requests to be in writing. Moreover, Ohio law does require public officials to make that point clear. (In one instance, we learned that a public official dispatched a mass e-mail about our request. Again, Ohio law strongly suggests that that is not the appropriate course of action.) Simply put, state law supports that these records are ours. They belong, not to the specific government office, but to the public. Yes, there are standards for making public records requests and for dealing with what may best be described as “nuisance” requests. But our public records request to each office was very simple: Please disclose the annual earnings for 2010 for your respective public employees.
We collected the salaries for city, county, school and college employees. We did not seek requests for state or federal workers employed in Highland County, nor did we request payroll records from public libraries, hospitals or any other “quasi-public-private” agencies. We’ll leave that for another day. (However, if any such agency feels slighted and wishes to release their respective records, we would be happy to publish them.)
The last time we examined the records, the criticism from the usual areas was fast and furious. Many cited their respective education and experience as justification for their incomes. Good arguments, indeed. However, there are many former private-sector employees with similar education and experience who are now among the nation’s unemployed. Thus, the insistence that one with education and experience is immune from the unemployment line is, at best, a weak argument.
Others, though relatively few, insist their respective wages are none of our business. To that, I can only suggest that in the private sector, the person paying the employee certainly knows what he or she is paying. Since taxpayers are paying these public wages, it is my opinion that taxpayers are entitled to know what the wages are. Thus far, the Ohio Revised Code agrees. And, yes, the usual critics will clamor about the Wall Street CEOs and their lucrative incomes. Clamor away. If their respective boards can’t see the waste of a $100 million CEO, not even Lasik eye surgery can help them.
This is about what can be better controlled on the local, state and federal levels.
To move on, now that we’d received the requested numbers, we knew we needed a cutoff point. In 2007, we initially thought of publishing all salaries at $50,000 or more. That listing, however, would have been quite lengthy; well into the hundreds. There was discussion then of cutting the list at $60,000 and above; and a final decision was reached to publish those earning $70,000 or more.
This year, given the dismal southern Ohio economy and near-record unemployment, we felt that a threshold of $60,000 was reasonable. To bolster this decision, we can reference the county’s per-capita income ($19,332) and average household income ($40,138). Furthermore, at a recent Highland County Board of Commissioners’ meeting, the executive director of a local agency pointed out that the per-capita income in Highland County is the 26th lowest in Ohio and some $10,000 less than the state average. For many in the private sector, that is no real surprise.
It is important to note, too, that at no point in our story was a reference made to the justification or nonjustification of these publicly funded salaries. The point was to present evidence of the rising disparity between private-sector wages and public wages – a disparity that is not only evident in Highland County, but also across Ohio and the nation. USA Today and other national publications have reported on this alarming trend.
Private-sector job growth has been the issue across the state and nation since the last time we visited this topic. Private-sector job growth was central to the campaigns of former Ohio Govs. Taft and Strickland, and to U.S. Senate candidates Lee Fisher and Rob Portman.
Prior to last November’s general election, we heard from one candidate after another who said “The only issue is job creation.”
Yet, nothing changes.
The reality is that Ohio is a low-wage, high-tax state for its private sector, while spending on almost all levels of government has increased. (The city of Greenfield and the Highland County Board of Commissioners, who have reduced their budget by roughly 25-30 percent in the last three years are exceptions.)
Not only is there a growing disparity in wages between public and private workers, there’s also a growing disparity in retirement benefits. For each public employee’s annual income, it’s a safe estimate to add another 22 percent in retirement benefits, some of which is funded by the taxpayers, who have precious little for their own retirements.
Many in the private sector can work the majority of their lives only to look forward to a Social Security “retirement” that is capped at $28,000 per year. Meanwhile, many public workers can work less than half of their lives and enjoy much more lucrative retirements, some of which total in the millions of dollars.
Think about it. Some public workers can start at an early age, say 18 or 19, work 30 years, reach a maximum annual salary of $150,000 or more, and retire around age 50 and are set to receive $3 million or more in retirement. (Trust me, it happens.) For comparison, a private-sector worker can start at the same age, earn $50,000 a year (good work, if you can get it) for 40 years and receive $2 million for actually working, and still not be eligible for Social Security for another seven years.
Let’s look at some other numbers.
An hourly worker paid $8 an hour, times 40 hours per week, earns an annual income of $16,640. Now, for the sake of argument, let’s assume that $8-an-hour employee agrees to work 20 hours of overtime each and every week of the year, forgoing all vacations and personal days, and let’s assume he is paid time-and-a-half for each 20 hours of overtime. That would generate another $12,480 in earnings, making the worker’s yearly income $29,120.
That’s still a far cry from the $60,000 minimum used in our story. And it’s a far cry from the public averages which exceed $50,000 a year in many public sectors.
If $8 an hour is too insignificant for some to comprehend, let’s use the same simple arithmetic based on a $10-an-hour job. A $10-an-hour worker, who works all 52 weeks of the year at 40 hours, plus another 20 hours per week at time-and-a-half for all 52 weeks, he has a total annual income of $36,400, or approximately the average household income in Highland County. And that’s with no vacation, no sick days, no personal days, no holidays and no snow days.
It’s still a long way from $60,000.
There’s another caveat in the private-sector arena. The federal minimum for a salaried employee is $23,660. That’s what happens in the private sector if you start turning in too much overtime. You become “salaried.”
According to the Ohio Department of Job and Families Services, the per capita income for Highland County was $24,270 in 2005. It has since declined. Two of our neighboring counties are now listed as “economically distressed.” If things don’t change, Highland County could very well join Adams and Pike counties on this list.
The ODJFS labor statistics by occupation for 2005-06 showed the majority of Highland County private-sector jobs in the annual pay range of $25,000 to $50,000, with many occupations paying below $20,000. Many of these workers were college educated, with professional experience. And many of their jobs are gone.
The assertion that some public employees put in a lot of overtime may be legitimate. But their implication that private-sector workers make less because they work fewer hours is a direct insult to the very taxpayers whose wages help pay their public salary. There are many, many private-sector workers in Highland County putting in long hours and paying taxes who do not earn anything close to $50,000 a year.
Not all public employees were critical of our reporting. In fact, two have told me point blank that they are overpaid. They said it; I didn’t. A few others have admitted “It’s pretty good work if you can get it.”
The bottom line is this: A system in which everyone works for the government cannot sustain itself. We need a strong private-sector, instead of the one where Ohio’s private-sector workers can no longer keep pace with inflation.
I think I have a fair idea of the going rates in private business. A few years ago I received a resume from someone who has worked in five Hillsboro businesses since 1999. This person has a degree. Her earnings ranged from $5.75 an hour to $8.15 an hour. This week alone, I have received four resumes from experienced workers seeking any type of position. And I’m not advertising for help. That’s just the reality of our employment situation.
It is time for public employees and their respective unions to share in the current economic recession. It is time for the local, state and national elected and appointed officials to take considerable measures to reduce the burden on those in the private sector.
Ohio Gov. John Kasich has taken some initial steps that indicate he’s serious about real reform. But those aforementioned unions are working overtime to derail his efforts. Of course, they have the triple advantage of time, money and organization. While their professional time is spent lobbying our lawmakers, most of the rest of us are too busy working – or looking for work – to realize our ox has been sired, until the calf arrives.
Last week, hundreds of union representatives packed the Ohio Statehouse to oppose legislation that would change the collective bargaining rules for state workers. Sen. Shannon Jones testified in support of Senate Bill 5, which would eliminate collective bargaining for certain state employees and base future pay rates and increases on merit. Senate Bill 5 may or may not be the answer, but it certainly has to be a consideration.
Two HCP columnists this week referenced the People’s Uprising in Egypt. If the ongoing disparity in wages, benefits and retirements in this nation continues, it wouldn’t be altogether surprising to see a similar case of civil disobedience on the home front.
The question all of must answer is this: Barring a change from a historically great republic to a new socialist state, is our present arrangement sustainable without a strong private-sector economy? And, can we revitalize the private-sector under the present arrangement?
Rory Ryan is publisher and editor of The Highland County Press.[[In-content Ad]]
In 2008, with the assistance of local auditors, school treasurers and various public finance officials, Brandy Chandler and I compiled these labor statistics for the 2007 calendar year. Much has happened, economically speaking, in the ensuing three-year period, not only in Highland County, but across the state and nation. Most of it has not been good.
Just this week, The Associated Press reported that “Not since World War II has the federal budget deficit made up such a big chunk of the U.S. economy. And within two or three years, economists fear the result could be sharply higher interest rates that would slow economic growth.”
And, as pointed out by Congressman Mike Turner, President Obama has sent Congress a budget proposal that projects a record deficit of $1.65 trillion this year, almost 11 percent of the country’s $14 trillion economy — “the largest proportion since 1945, when wartime spending swelled the deficit to 21.5 percent of U.S. gross domestic product,” the AP reported.
In a recent town-hall meeting with Sen. David Daniels and Rep. Cliff Rosenberger, the lawmakers noted that it would behoove all those in public office to be prepared for potential cuts in state funding. While the private-sector has made significant reductions in payroll and many jobs have altogether disappeared, the local public sector has, relatively speaking, remain unscathed. In recent conversations with some public department managers, they have acknowledged as much. “It’s just the system,” some have said.
Not always. Sometimes, it’s just abuse and lack of oversight within the system.
Consider: In 2007, the unemployment rate in Highland County was 5.6 percent. In 2010, the jobless rate peaked at 19 percent and closed the year at 14 percent (and these numbers do not reflect those whose unemployment benefits have expired). Meanwhile, many public servants on the local, state and federal levels kept right on enjoying pay raises, great benefits and tremendous retirement packages. Something’s got to give. (Besides the taxpayer.)
In his column this week, Ohio Rep. John Carey said “Ohio has to save money. There is no other option. With a 17-percent decline in revenues and an $8 billion budget hole to fill, our state needs to provide services in a more efficient manner.”
The same applies across all levels of government.
In looking at the local public wages, we will leave it to readers and taxpayers to determine if the overall system is working as intended, or if it’s time to modify “the system.”
As always, and as I wrote a few years ago, collecting the public information was a bit of an exercise in and of itself. The last time we made this request no less than three public entities in Highland County asked us to put the request in writing. Ohio law does not require such requests to be in writing. Moreover, Ohio law does require public officials to make that point clear. (In one instance, we learned that a public official dispatched a mass e-mail about our request. Again, Ohio law strongly suggests that that is not the appropriate course of action.) Simply put, state law supports that these records are ours. They belong, not to the specific government office, but to the public. Yes, there are standards for making public records requests and for dealing with what may best be described as “nuisance” requests. But our public records request to each office was very simple: Please disclose the annual earnings for 2010 for your respective public employees.
We collected the salaries for city, county, school and college employees. We did not seek requests for state or federal workers employed in Highland County, nor did we request payroll records from public libraries, hospitals or any other “quasi-public-private” agencies. We’ll leave that for another day. (However, if any such agency feels slighted and wishes to release their respective records, we would be happy to publish them.)
The last time we examined the records, the criticism from the usual areas was fast and furious. Many cited their respective education and experience as justification for their incomes. Good arguments, indeed. However, there are many former private-sector employees with similar education and experience who are now among the nation’s unemployed. Thus, the insistence that one with education and experience is immune from the unemployment line is, at best, a weak argument.
Others, though relatively few, insist their respective wages are none of our business. To that, I can only suggest that in the private sector, the person paying the employee certainly knows what he or she is paying. Since taxpayers are paying these public wages, it is my opinion that taxpayers are entitled to know what the wages are. Thus far, the Ohio Revised Code agrees. And, yes, the usual critics will clamor about the Wall Street CEOs and their lucrative incomes. Clamor away. If their respective boards can’t see the waste of a $100 million CEO, not even Lasik eye surgery can help them.
This is about what can be better controlled on the local, state and federal levels.
To move on, now that we’d received the requested numbers, we knew we needed a cutoff point. In 2007, we initially thought of publishing all salaries at $50,000 or more. That listing, however, would have been quite lengthy; well into the hundreds. There was discussion then of cutting the list at $60,000 and above; and a final decision was reached to publish those earning $70,000 or more.
This year, given the dismal southern Ohio economy and near-record unemployment, we felt that a threshold of $60,000 was reasonable. To bolster this decision, we can reference the county’s per-capita income ($19,332) and average household income ($40,138). Furthermore, at a recent Highland County Board of Commissioners’ meeting, the executive director of a local agency pointed out that the per-capita income in Highland County is the 26th lowest in Ohio and some $10,000 less than the state average. For many in the private sector, that is no real surprise.
It is important to note, too, that at no point in our story was a reference made to the justification or nonjustification of these publicly funded salaries. The point was to present evidence of the rising disparity between private-sector wages and public wages – a disparity that is not only evident in Highland County, but also across Ohio and the nation. USA Today and other national publications have reported on this alarming trend.
Private-sector job growth has been the issue across the state and nation since the last time we visited this topic. Private-sector job growth was central to the campaigns of former Ohio Govs. Taft and Strickland, and to U.S. Senate candidates Lee Fisher and Rob Portman.
Prior to last November’s general election, we heard from one candidate after another who said “The only issue is job creation.”
Yet, nothing changes.
The reality is that Ohio is a low-wage, high-tax state for its private sector, while spending on almost all levels of government has increased. (The city of Greenfield and the Highland County Board of Commissioners, who have reduced their budget by roughly 25-30 percent in the last three years are exceptions.)
Not only is there a growing disparity in wages between public and private workers, there’s also a growing disparity in retirement benefits. For each public employee’s annual income, it’s a safe estimate to add another 22 percent in retirement benefits, some of which is funded by the taxpayers, who have precious little for their own retirements.
Many in the private sector can work the majority of their lives only to look forward to a Social Security “retirement” that is capped at $28,000 per year. Meanwhile, many public workers can work less than half of their lives and enjoy much more lucrative retirements, some of which total in the millions of dollars.
Think about it. Some public workers can start at an early age, say 18 or 19, work 30 years, reach a maximum annual salary of $150,000 or more, and retire around age 50 and are set to receive $3 million or more in retirement. (Trust me, it happens.) For comparison, a private-sector worker can start at the same age, earn $50,000 a year (good work, if you can get it) for 40 years and receive $2 million for actually working, and still not be eligible for Social Security for another seven years.
Let’s look at some other numbers.
An hourly worker paid $8 an hour, times 40 hours per week, earns an annual income of $16,640. Now, for the sake of argument, let’s assume that $8-an-hour employee agrees to work 20 hours of overtime each and every week of the year, forgoing all vacations and personal days, and let’s assume he is paid time-and-a-half for each 20 hours of overtime. That would generate another $12,480 in earnings, making the worker’s yearly income $29,120.
That’s still a far cry from the $60,000 minimum used in our story. And it’s a far cry from the public averages which exceed $50,000 a year in many public sectors.
If $8 an hour is too insignificant for some to comprehend, let’s use the same simple arithmetic based on a $10-an-hour job. A $10-an-hour worker, who works all 52 weeks of the year at 40 hours, plus another 20 hours per week at time-and-a-half for all 52 weeks, he has a total annual income of $36,400, or approximately the average household income in Highland County. And that’s with no vacation, no sick days, no personal days, no holidays and no snow days.
It’s still a long way from $60,000.
There’s another caveat in the private-sector arena. The federal minimum for a salaried employee is $23,660. That’s what happens in the private sector if you start turning in too much overtime. You become “salaried.”
According to the Ohio Department of Job and Families Services, the per capita income for Highland County was $24,270 in 2005. It has since declined. Two of our neighboring counties are now listed as “economically distressed.” If things don’t change, Highland County could very well join Adams and Pike counties on this list.
The ODJFS labor statistics by occupation for 2005-06 showed the majority of Highland County private-sector jobs in the annual pay range of $25,000 to $50,000, with many occupations paying below $20,000. Many of these workers were college educated, with professional experience. And many of their jobs are gone.
The assertion that some public employees put in a lot of overtime may be legitimate. But their implication that private-sector workers make less because they work fewer hours is a direct insult to the very taxpayers whose wages help pay their public salary. There are many, many private-sector workers in Highland County putting in long hours and paying taxes who do not earn anything close to $50,000 a year.
Not all public employees were critical of our reporting. In fact, two have told me point blank that they are overpaid. They said it; I didn’t. A few others have admitted “It’s pretty good work if you can get it.”
The bottom line is this: A system in which everyone works for the government cannot sustain itself. We need a strong private-sector, instead of the one where Ohio’s private-sector workers can no longer keep pace with inflation.
I think I have a fair idea of the going rates in private business. A few years ago I received a resume from someone who has worked in five Hillsboro businesses since 1999. This person has a degree. Her earnings ranged from $5.75 an hour to $8.15 an hour. This week alone, I have received four resumes from experienced workers seeking any type of position. And I’m not advertising for help. That’s just the reality of our employment situation.
It is time for public employees and their respective unions to share in the current economic recession. It is time for the local, state and national elected and appointed officials to take considerable measures to reduce the burden on those in the private sector.
Ohio Gov. John Kasich has taken some initial steps that indicate he’s serious about real reform. But those aforementioned unions are working overtime to derail his efforts. Of course, they have the triple advantage of time, money and organization. While their professional time is spent lobbying our lawmakers, most of the rest of us are too busy working – or looking for work – to realize our ox has been sired, until the calf arrives.
Last week, hundreds of union representatives packed the Ohio Statehouse to oppose legislation that would change the collective bargaining rules for state workers. Sen. Shannon Jones testified in support of Senate Bill 5, which would eliminate collective bargaining for certain state employees and base future pay rates and increases on merit. Senate Bill 5 may or may not be the answer, but it certainly has to be a consideration.
Two HCP columnists this week referenced the People’s Uprising in Egypt. If the ongoing disparity in wages, benefits and retirements in this nation continues, it wouldn’t be altogether surprising to see a similar case of civil disobedience on the home front.
The question all of must answer is this: Barring a change from a historically great republic to a new socialist state, is our present arrangement sustainable without a strong private-sector economy? And, can we revitalize the private-sector under the present arrangement?
Rory Ryan is publisher and editor of The Highland County Press.[[In-content Ad]]