A story in the Times today covers the ongoing attempts by politicians to decrease the pay and power of unions:
State officials from both parties are wrestling with ways to curb the salaries and pensions of government employees, which typically make up a significant percentage of state budgets….
But in some cases — mostly in states with Republican governors and Republican statehouse majorities — officials are seeking more far-reaching, structural changes that would weaken the bargaining power and political influence of unions, including private sector ones.
A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers.
An important note about these public sector studies is that I don’t believe that any of their authors are claiming that there is no public sector union wage premium. Just like in the private sector, being in a union raises your wages by over 10%.
Of course some of these studies explicitly control for union membership, which then tells you that public sector workers aren’t overpaid once you take their union premium into account. Not all studies control for unionization, which is an attempt to provide a measure of the overall wage premium for public sector workers, but I doubt that those authors would deny that there is still a public sector union wage premium.
So are public sector workers overpaid? It’s a tough question to answer because there are many perks for occupations, and also probably some selection bias. But I think we can say with a fair degree of certainty that , just like in the private sector, those in unions receive a substantial wage premium above market rates.