Statement from Yankee Institute President Carol Platt Liebau on the Economic Policy Institute's critique of our work:
We are flattered that a year after Yankee Institute released Unequal Pay: Public vs. Private Sector Compensation in Connecticut, the Economic Policy Institute, a national left-wing group, felt it necessary to attack our study. It is clear that the study's findings -- particularly that state workers in Connecticut earn an average of 25 to 46 percent more than their private sector counterparts -- has ruffled some feathers.
Given EPI's union ties, perhaps it's entirely predictable that it would try to rebut the study. Indeed, before joining EPI, the author of this article, Ms. Monique Morrissey, actually worked for the AFL-CIO. In any case, her objections lack merit.
The author of Unequal Pay, Andrew Biggs, is a respected economist. He was appointed by President Barack Obama to serve on the Financial Oversight and Management Board for Puerto Rico. He has a Ph.D. from the London School of Economics, and is an expert in the field of public vs. private sector compensation.
The study is restricted to state workers – not local workers – as Ms. Morrissey says. To be clear, 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. In this study, Dr. Biggs controlled for education and years of experience, which is the only way to get an "apples to apples" comparison, since jobs in the public sector are so different from those in the private sector. His methodology and credentials are impeccable.
Census data backs up our assertions – Connecticut has the second highest payroll per state employee in the nation, behind only California. Our average state employee earns $6,000 more than state employees in New York, and $11,000 more than state employees in Massachusetts. That is even before benefits are factored in.
Finally, the claim that state employees are underpaid is inconsistent with the experience of Connecticut taxpayers. Do you collect a defined benefit pension? Will your employer provide healthcare after retirement? Will you receive a raise each year even if you stay in the same job? State employees answer "yes" to all these questions -- and this, along with a host of other factors, result in their occupying a privileged place in our state. In Connecticut, state worker benefits are unfair and unsustainable. Period.
Study author, Andrew Biggs, responds at length on the American Enterprise Institute's website.