Monday, February 28, 2011

USA Today Lies with Statistics; Falsely Claims Public Employee Pay is Higher than in Private Sector

Forget about whether you're liberal or conservative, pro-union or anti. A simple question: in either the public or the private sector, would you not expect a college grad who has worked his or her job for 4 years to be paid significantly more than someone with a high school diploma who's had his or her gig for 2 years?

And if the college grad were in fact paid more, would that be unfair somehow? Would it be cause for jealousy and resentment? Apparently, USA Today thinks so.

The tabloid lies with statistics through the first 7 paragraphs of this 8-paragraph "analysis." Here's the lede:
Wisconsin is one of 41 states where public employees earn higher average pay and benefits than private workers in the same state, a USA TODAY analysis finds. Still, the compensation of Wisconsin's government workers ranks below the national average for public employees and has increased only slightly since 2000.
Graphs 3 and 4:
The analysis of government data found that public employee compensation has grown faster than the earnings of private workers since 2000. Primary cause: the rising value of benefits.
They could have mentioned that 37 percent of public workers belong to a union, versus 7 percent in the private sector, but that's just a quibble.
Wisconsin is typical. State, city and school district workers earned an average of $50,774 in wages and benefits in 2009, about $1,800 more than in the private sector. The state ranked 33rd in public employee compensation among the states and Washington, D.C. It had ranked 20th in 2000.
And very careful readers only get a dose of reality -- a limited one -- in the final graph:
Economist Jeffrey Keefe of the liberal Economic Policy Institute says the analysis is misleading because it doesn't reflect factors such as education that result in higher pay for public employees.
That's right, their analysis just compared average wages, and didn't adjust for different job requirements, age, education or experience. It's not misleading, it's entirely meaningless. Unless, of course, you think that high school grad with less experience should be paid the same.

As I wrote last year, Public sector workers have, on average, more experience and higher levels of education than their counterparts in the private sector (they are twice as likely to have a college degree). Economist John Schmitt found that when one controls for those factors -- comparing apples to apples --state and local employees earn almost 4 percent less than their brethren in corporate America. (Even accounting for their greater benefits, state and local employees still make less in total compensation than they would doing the same work in the private sector.)

The thing that I find so egregious about this is that the reporter, Dennis Cauchon, spoke with an economist who told him this, but didn't include any of the numbers I cite above. This is how people are being mislead to believe that public workers are the new welfare queens.

Here's an email for corrections and clarifications:, and here's an editorial feedback form. If you're sick of this kind of distortion passing itself off as unbiased journalism, let 'em know.

1 comment:

Susan Templeton said...

Mr. Holland, thank you for addressing my community last night. I have recommended your blog and book to this international trading community: I think you would also enjoy reading Mr. Bill Cara's daily comments and in particular his Week in Review.