A report release by the Iowa Policy Project Tuesday says when you compare public and private sector workers with similar education — public sector workers make less in pay and benefits than the private sector. (report story)
Iowa State University economics professor, Peter Orazem says the new report doesn’t account for some factors that determine what a public employee truly makes over a lifetime.
“People are willing to pay potentially more than dollar-for-dollar for benefits. And the reason is benefits aren’t taxed,” Orazem says, “and the benefit of having much more secure employment status is something that people are willing to pay for in the form of lower compensation.” Orazem says the stability of public sector jobs is important.
“There’s a lot of people in the private sector who aren’t earning very much because they’ve lost their jobs and are having trouble finding one. And that’s why that benefit of having a much more secure employment status is something people are willing to pay for in the form of lower compensation,” Orazem says.
Still, Orazem says the report is correct that public employees aren’t making more than their private sector counterparts — but they may just be compensated differently.