Cleveland Plain Dealer...
Ohio Business Roundtable study finds compensation gap favors public workers
By Henry J. Gomez 

CLEVELAND, Ohio -- As Ohio’s public-employee unions fight to keep collective-bargaining power, a group of executives from the state’s largest corporations is pushing a study that depicts less lucrative compensation in the private sector. 

The study, conducted by the conservative American Enterprise Institute, found that based on wages alone, public workers earn about 2.5 percent less than comparable private employees. 

But when factoring in benefits, including pensions, and when valuing guarantees of job security, researchers concluded that public workers make 43 percent more than private workers. 

The report (PDF), released Wednesday by Ohio Business Roundtable, comes amid a fervent battle surrounding the November voter referendum on Senate Bill 5, which weakens public unions’ negotiating power. The Republican-backed bill will appear on the ballot as Issue 2. 

In a meeting with The Plain Dealer’s editorial board, Richard Stoff, president and chief executive of Ohio Business Roundtable, said his group commissioned the study at the request of members seeking more information on the matter. He said he has not consulted with political leaders behind the pro-Issue 2 campaign but wanted to release the report to the public. 

“It is important to put forth research,” Stoff said. 

The report’s findings differ greatly from a study done earlier this year by a Rutgers University professor. That study, released in February, showed Ohio’s public employees earning about 6 percent less annually than private-sector counterparts. 

In the Roundtable’s study, while authors Andrew Biggs and Jason Richwine noted that wages were “comparable” between both sectors, they determined that incentives, such as publicly funded pensions and health insurance, helped give public workers a 31.2 percent edge in nonwage benefits. 

Under current law, public workers contribute up to 10 percent of their paychecks toward their pensions, and their employers must pay 14 percent. SB 5, if upheld, would bar employees from negotiating pension pickups, a practice by which employers agree to pay a portion of the 10 percent contribution. But the new law would not increase the standard 10 percent contribution. 

Biggs and Richwine also calculated the value of job security, theorizing that public-employee unions often negotiate terms that limit an employer’s ability to fire poor performers. That security, according to the study, gives public workers another 10 percent edge. 

Biggs, who also met with the editorial board, said he and Richwine used U.S. Bureau of Labor Statistics numbers and other data from 2006 to 2010 to complete their study. Public workers were compared with private workers of similar educational background, not necessarily a similar job. 

He acknowledged his organization’s conservative reputation but stood by his numbers. 

Amy Hanauer, executive director of Policy Matters Ohio, a liberal think tank in Cleveland, took issue Wednesday with the study. 

“They did a bunch of things to mix up the numbers that don’t make a lot of sense,” Hanauer said in a telephone interview. “And in the final analysis, what they’re really admitting is that public-sector employees make a little less in wages than private-sector employees do.” 

Read it at the Cleveland Plain Dealer