There has been a lot of back and forth on whether or not government workers are overpaid. If I were a good blog citizen I would track down the links for you.

Instead, I am just going to throw in my two cents. Causal empiricism would lead many professionals to scoff at the idea government workers are overpaid. Who ever says, “man I want to go into the public sector where the bucks really start rolling in.”

The problem is that this has a significant observation bias. Many public sector workers are not professionals and its precisely among the non-professional staff that allegations of overpayment are targeted.

Underpayment of public employees would be hard to measure. It wouldn’t mean, as some have suggested, that government workers would be better off fired. It would mean that the government would be better off replacing its current workers with higher quality workers who demand higher salary. It means the government is currently scraping the bottom of the barrel.

Overpayment could take two forms. It could mean that many government workers are overqualified; that there is no reason to put a person so highly sought after in such a low return position. It could also mean that the current workers are being paid more than their market price.

Luckily the second is easy to tell as it presents itself as oversupply, workers beating down the doors to get these jobs. There is undoubtedly some of this in the public sector given the existence of collective bargaining. However, when its really out of whack we can tell because we get stories like this:

By Associated Press  |  August 19, 2004

LOS ANGELES — Hundreds of thousands of applicants are competing for 3,000 temporary jobs at the ports of Long Beach and Los Angeles, hoping for lucrative wages in an otherwise weak labor market.

The jobs, which pay $20 to $28 an hour, were created to handle a record amount of cargo coming through both ports.

A Long Beach post office spokesman said Tuesday that a conservative estimate put the number of mailed-in applications at 220,000 to 250,000.

”This is almost like going to the horse track and betting on the long shot," said Raymond Sheets, a 47-year-old tree trimmer from San Diego who hopes to land a job at the harbor.

The point isn’t that $20 to $28 is more than these workers could possibly be worth. We aren’t even asking what the qualifications are. We are simply noting that there is enormous evidence of a failure of this labor market to clear. Lots of people want this job – only 1 in 100 will get it.

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