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Fun with numbers

Tuesday, Aug 20, 2019

* Illinois Policy Institute

Illinois’ public sector employees are some of the highest paid in the nation and earn wages up to 60% higher than their private sector counterparts.

As you might imagine, there are some red flags with this study. They don’t show their statistical model and they don’t control for union membership, for example.

* And this is from Appendix A

Using the American Community Survey (ACS), we restrict our sample to white males, heads of households, prime-working age (25-55) only.

I asked Frank Manzo IV from the Illinois Economic Policy Institute how many state and local government employees were white males between the ages of 25 and 55 during the time period studied. The answer is 22 percent…

…Adding… From Dr. Orphe Divounguy…

“All academics restrict their sample sizes to omit as much bias as possible from their analysis.

“As we say in the body of the paper, we don’t just analyze white households: ‘The analysis compares only employed, male heads of households from the ages of 25-55 in order to remove wage disparities resulting from gender, school enrollment or semi-retirement.’ We have over 1.4 million observations for 50 states and 63,800 in Illinois that are male, 25-55, reporting to be heads of households. With the use of sampling weights, that represents 32.3 million U.S. male heads of household and 1.4 million Illinois male heads of household.

“The model used is referred to as an Oaxaca-Blinder decomposition. We refer to it in the appendix and cite the papers that first introduced it. It decomposes log hourly wages into the effect of observable factors such as age, age squared, educational attainment, marital status … all factors that explain wage differences between two groups — and the rest — the wage gap that remains unexplained by observables.

“As for the second part of the paper, the model is fully detailed in the appendix. We control for demographics with year fixed effects. The methodology comes from Behar and Mok who have published a similar paper with the International Monetary Fund looking at whether public employment crowds out private employment in developing countries. We also find that labor market freedom improves labor market outcomes. Another paper published this year => here shows the same relationship: labor freedom is associated with lower unemployment rates.”

- Posted by Rich Miller        

39 Comments
  1. - RNUG - Tuesday, Aug 20, 19 @ 1:28 pm:

    Not to say there aren’t both underpaid and overpaid people in government jobs, but this line popularized by Mark Twain comes to mind:

    Liars, damn liars, and statistics …


  2. - Demoralized - Tuesday, Aug 20, 19 @ 1:29 pm:

    ==we restrict our sample to white males, heads of households, prime-working age (25-55) only.==

    Huh? Why don’t they just say we restrict our sample to those individuals that allow us to validate the conclusion we wanted.

    The Illinois Policy Institute is going to continue to beat this drum because they are anti-public employee. I would love to know what the people at the Illinois Policy Institute make because I can guarantee you it’s way too much money for the level of work they do there.


  3. - btowntruthfromforgottonia - Tuesday, Aug 20, 19 @ 1:29 pm:

    Pure jealousy from the IPI.


  4. - Oswego Willy - Tuesday, Aug 20, 19 @ 1:30 pm:

    “If you look at white males, born on a Tuesday, that are first born in their families and have sandy brown hair with green eyes, we are right”

    - IPI, maybe.


  5. - Demoralized - Tuesday, Aug 20, 19 @ 1:36 pm:

    I encourage people to read their article. They make the claim that hiring people in the public sector and/or giving those public sector workers raises causes unemployment. Words fail me.


  6. - Cheryl44 - Tuesday, Aug 20, 19 @ 1:39 pm:

    These are the anarchists who clutch their pearls at a whiff of socialism from the left.


  7. - Joey Twoshoes - Tuesday, Aug 20, 19 @ 1:40 pm:

    The cherry pickers union would like a word with the IPI.


  8. - Jibba - Tuesday, Aug 20, 19 @ 1:40 pm:

    Garbage in, garbage out.


  9. - JoanP - Tuesday, Aug 20, 19 @ 1:42 pm:

    For IPI, only white male heads of households matter.


  10. - NIU Grad - Tuesday, Aug 20, 19 @ 1:44 pm:

    “white males, heads of households, prime-working age (25-55) only.”

    Otherwise known as the average IPI workforce?


  11. - Huh? - Tuesday, Aug 20, 19 @ 1:45 pm:

    “some of the highest paid in the nation”

    I took a 40% cut in salary and cash benefits to go back on the public payroll. I am so far down in the salary bracket, that if the State increased the bottom of the bracket by a few percent, I would fall out the bottom.


  12. - Skeptic - Tuesday, Aug 20, 19 @ 1:46 pm:

    “AFSCME workers are scheduled to receive a [..] 12% raise [..] while Illinois currently has an unemployment rate of 4.4% that leaves 285,000 Illinoisans [..] unemployed.” That’s funny, I thought the conservatives were crowing about record low unemployment. I guess I misunderstood.


  13. - DoingHumanThings - Tuesday, Aug 20, 19 @ 1:46 pm:

    Ran the numbers for myself (Hey Willy, I’m a white male, born on a Tuesday, first born in my family with brown hair…brown eyes though), and it looks like their 60% is correct for me. I work for the state of IL and make 60% of the average for private-sector employees in my line of work. That’s what they meant, right ;)


  14. - Skeptic - Tuesday, Aug 20, 19 @ 1:46 pm:

    “For IPI, only white male heads of households matter.” “As a white male…”


  15. - thoughts matter - Tuesday, Aug 20, 19 @ 1:48 pm:

    I notice they didn’t really want to highlight this comment -
    ==Public sector employees with a college degree in the management, professional and related occupations, such as accountants, compliance officers and computer scientists, actually face a wage penalty of 10.5%==

    must not fit into their theme of the day


  16. - Oswego Willy - Tuesday, Aug 20, 19 @ 1:48 pm:

    ===…brown eyes though===

    While I’m happy you count yourself, under the IPI criteria they maybe support, you don’t count. Green eyes are a must.

    I’m sorry.


  17. - TheInvisibleMan - Tuesday, Aug 20, 19 @ 1:56 pm:

    ===I encourage people to read their article===

    Hard pass.

    The past few months they have gone off the rails and are nothing but a parody of themselves. I don’t think they are self-aware enough to notice yet though.


  18. - Publius - Tuesday, Aug 20, 19 @ 2:02 pm:

    Sadly most people only read the headline.


  19. - NoGifts - Tuesday, Aug 20, 19 @ 2:03 pm:

    IPI depends on ignorance. “annual raises whose compounded value will be a nearly 12% pay raise for the average worker, along with increased family leave. ” How many years of raises are we talking about? 5 years of 2.2% raises? That doesn’t seem outrageous. I don’t know the contract, but this statement is intended to mislead. Increased family leave too? From what baseline? Paid or unpaid?


  20. - City Zen - Tuesday, Aug 20, 19 @ 2:06 pm:

    This is why Cousin Jeffrey works for the Parks Department.


  21. - Blue Dog Dem - Tuesday, Aug 20, 19 @ 2:06 pm:

    Well that settles it. No wonder we are a trillion or so in debt.

    Is this what is meant when the term ‘evidence based’ or ‘data driven’ is thrown out there?


  22. - Skeptic - Tuesday, Aug 20, 19 @ 2:07 pm:

    They also make a big deal about the right to strike. So, when was the last State employee strike?


  23. - Blake - Tuesday, Aug 20, 19 @ 2:12 pm:

    Rich, I’d like to see what IPI says is responsible for the gender wage gap. If it’s about career choice & if the claims of Illinois public sector employees being paid more than their private sector counterparts are accurate, we can expect the percentage of those public sector employees being male (40%) to be higher than their private sector counterparts. I doubt those counterparts are under 40% male.


  24. - Moby - Tuesday, Aug 20, 19 @ 2:14 pm:

    My wife works in the private sector, and a couple of years ago she was recruited by a state agency to interview for a position for which perhaps only a handful of people in Sangamon County are qualified. She was offered the job, but was going to have to take a 33% reduction in salary. The hiring deputy director was embarrassed, but his hands were tied. She politely declined.


  25. - Norseman - Tuesday, Aug 20, 19 @ 2:15 pm:

    Liars are going to lie and haters are going to hate. You don’t need this phony report to justify your antipathy toward government and it’s employees.


  26. - Fixer - Tuesday, Aug 20, 19 @ 2:43 pm:

    IPI, where the numbers are made up and facts don’t matter.


  27. - R A T - Tuesday, Aug 20, 19 @ 3:01 pm:

    ” … wages up to 60% higher …”

    I once went to buy a car at a lot with this kind of lingo. Almost all cars were less then 5% off and the one car that was 60% off was initially overpriced by 80%.

    Hard to think of a more meaningless statement.


  28. - Tommydanger - Tuesday, Aug 20, 19 @ 3:11 pm:

    Seems like the same survey completed in 1790.


  29. - Tommydanger - Tuesday, Aug 20, 19 @ 3:13 pm:

    Ahh, don’t all of us land owning adult white males pine away for the good old and white days.

    /s


  30. - DarkDante - Tuesday, Aug 20, 19 @ 3:32 pm:

    I am white male between the ages of 25-55 and a state worker. I can confirm that I am paid at least 10-15% less than my private sector friends of similar education level. It’s a real problem for me financially, as I want to stay in the public sector, but could do way better going private. /personalanecdote


  31. - Notorious R.B.G. - Tuesday, Aug 20, 19 @ 3:54 pm:

    Yeah, those prison barbers are really so vastly overpaid. /s


  32. - Vader - Tuesday, Aug 20, 19 @ 5:05 pm:

    Demoralized - IPI salaries for key employees are listed in their 990 filed with the IRS and can be found at the link below. In 2017, Tillman made $384,500 in salary. https://projects.propublica.org/nonprofits/organizations/412057028


  33. - lakeside - Tuesday, Aug 20, 19 @ 5:13 pm:

    ==we restrict our sample to white males, heads of households, prime-working age (25-55) only.==

    Absolutely barking with laughter. Bananas.


  34. - MyTwoCents - Tuesday, Aug 20, 19 @ 5:29 pm:

    Not that I’ve read the papers the IPI expert cites, but he is seriously trying to compare the economies of developing countries with the economy of the United States and saying that the public employment practices of those countries are comparable to the employment practices of the United States? That seems a bit far-fetched, even for the IPI, which has the reputation of conclusion first, data second.

    Also, sure, only analyze men to eliminate gender disparities, fine, but when you’re looking at a workforce that is 60/40 women, you’re still looking at trying to draw conclusions on a minority of the workforce, which seems problematic.


  35. - Pelonski - Tuesday, Aug 20, 19 @ 6:05 pm:

    When you include the amount of government healthcare, food, and related subsidies that go to the private sector employees working in the service sector, I would expect the 62% gap goes down quite a bit. To learn that the State does not participate in the poverty wage economy is a good thing in my view.


  36. - Whatever - Tuesday, Aug 20, 19 @ 6:56 pm:

    Notorious RBG’s mention of prison barbers caused a light to go off. Prison guards put in a ton of overtime because of hiring freezes, etc., leaving prisons grossly understaffed. Blago, Quinn and Rauner did their best to keep their agencies understaffed, too, leading to a lot of overtime. I wonder how much of the 60% is attributable to overtime pay?
    I also note that the professional/managerial workers, who are the highest paid, are paid less than private sector. If the study mixed them in with the general service providers, the 60% number would come down, perhaps substantially.


  37. - Roadrager - Tuesday, Aug 20, 19 @ 9:59 pm:

    “labor freedom” = “the freedom to treat the labor however we see fit”


  38. - Anon Y - Wednesday, Aug 21, 19 @ 8:28 am:

    However it needs to be said that they deselected the employees of color and women cause they continue to be underpaid.


  39. - efudd - Wednesday, Aug 21, 19 @ 9:07 am:

    Guess I know what Greg Bishop will be “reporting” on the next couple of days.


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