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December 12, 2016

Think tanks clash on state, private-sector pay disparities


Do Connecticut state employees receive significantly higher pay than similarly qualified private-sector workers?

The answer was yes, according to a 2015 study by Connecticut's conservative Yankee Institute for Public Policy, but the group's findings are now being challenged by a left-leaning Washington, D.C.-based think tank.

In Oct. 2015, the Yankee Institute released a report entitled, “Unequal Pay: Public vs. Private Sector Compensation in Connecticut,” by Andrew Biggs, a resident scholar at the American Enterprise Institute. In it, Biggs said total compensation for Connecticut state employees, including pay and benefits, exceeds compensation for similarly qualified non-government workers in the state by at least 25 percent.

But last week, in a report entitled, “Unequal public-sector pay in Connecticut? Yes — taxpayers are getting a bargain!”, the Economic Policy Institute's Monique Morrissey takes the Yankee study to task, saying its findings don't square with research that shows public-sector workers typically receive compensation lower than or equal to comparable private-sector workers. Those lower salaries, however, may be offset by better benefits, she said.

The EPI report argues that Biggs' findings are “cherry-picked,” excluding larger groups that receive less compensation, such as teachers and local government employees. Public-safety personnel are also excluded from the Yankee study, Morrissey says.

The Connecticut AFL-CIO, which represents approximately 200,000 union members in the state, quickly seized on the EPI report findings. About half of its members are public-sector workers and half work in the private sector, a union spokesman said.

“Connecticut legislators don't need Wall Street and corporate bias to build a fair economy that works for everyone,” said Lori J. Pelletier, president of the Connecticut AFL-CIO. “What they need is reliable information, and once again the Yankee Institute has failed miserably.”

Biggs disputed the EPI report's interpretation of his study and defended his methodology. Including public-safety workers, whose dangerous jobs require higher pay, for instance, would skew results, he said.

“There's no cherry picking there,” he said. “What I'm doing is pretty clearly laid out. They are throwing the kitchen sink at this. There may be honest differences but on these issues I am confident on the results.”

Carol Platt Liebau, president of the Yankee Institute, added:  “The purpose of this report was to look specifically at state employees, rather than local ones, because Connecticut is in a desperate budget mess. We are seeking common sense ways to address that mess; state-employee compensation is an obvious place to start — especially when state pension payments alone consume 10 percent of the state budget.”

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