Our Economic Pain Is Coming from Big Industry CEOs, Not Public Employees’ Unions

John Schmitt:

Conservative think-tanks and politicians like New Jersey Gov. Chris Christie and Wisconsin Gov. Scott Walker have been leading an attack on public-sector workers. The crux of their argument is that the economy is a mess and a large part of the reason is that public employees are overpaid.

On closer inspection, the evidence suggests a different culprit: private-sector employers. The problem is not that public-sector pay and benefits are out of control. The problem is that pay in the private sector has been stagnant or falling, health insurance coverage has been dropping, and traditional pensions have all but disappeared.

…

Public-sector workers were more successful in holding onto their health care and other benefits for two reasons. First, taxpayers generally value the work performed by public school teachers, police, food inspectors, medical researchers, air-traffic controllers and other public workers. We also know what it takes to maintain a middle-class standard of living and want to ensure that our neighbors meet that standard.

Second, public-sector workers are better organized than their private-sector counterparts. As private-sector unionization rates fell from about 20 percent at the end of the 1970s to just 7 percent in 2010, the share of public-sector workers in a union held steady at over 35 percent. Public-sector unions played an important role in protecting their members against declines in health and pension benefits seen in the private sector.

[Source: CEPR Feed]