Why Washington Wage Study Creates Brouhaha


May 10, 2010

A Washington State Department of Personnel’s survey is unproductive as a public policy tool. The recent study indicated that 82 percent of state workers are underpaid and 18 percent are overpaid. However, as an objective, scientific document it fails to be credible.

A salary survey should help insure compensation is high enough to attract applicants and correspond to the law of supply and demand. Pay and benefits should be equitable and should entice performance. At the same time, a compensation study should help prevent unnecessary costs by analyzing the relative worth of the jobs.

Compensation studies should be performed scientifically – comparing compensation in the government with what’s paid to workers in the community. That includes all benefits.

So, does the study reflect fairness to taxpayers? No.

Sixty percent of the study compared state government with local governments, which have skyrocketing payrolls in Washington state and have left the private sector behind. So, naturally, state salaries will pale in comparison with such pay scales.

More than 60 percent of the study gauged state worker salaries against other union salaries. That’s even though the majority of citizens do not have union jobs, which pay on average 15 percent higher wages.

Compared to the aggregate number of employers, the study only examined the relatively few private sector jobs at Amazon.com, Boeing and Eddie Bauer (which filed for bankruptcy in 2009).

So, the survey’s comparisons were terribly skewed. But please don’t take my word for it. Here’s the survey.

Further, the study did not even bother to include total compensation. State worker retirement pay, pensions, are the highest around; on average 74 percent higher than available in the private sector. So are the healthcare benefits. So much so, the state retiree health benefits, the last time I checked, were unfunded by $7.9 billion. (There are numerous other columns on this and related subjects in this Public Policy section.)

As we all know by now, the state lawmakers heaped $800 million in new taxes and relied heavily on federal government bailouts to offset the state’s $2.8 billion in red ink. Plus, the legislators failed to require efficiencies to prevent another looming budget crisis of the same magnitude in two years. And this means that money expended on the bloated state payroll was cut from taxpayer services.

The Washington Federation of State Employees’ union, www.wfse.org, is already using this so-called study to demand even higher salaries and benefits.

Meantime, if you want to comment, here’s the personnel office number to call: (360) 664-1960.

From the Coach’s Corner, the Association of Washington Business is contesting the wording of Referendum 52 in the Nov. 2010 election. It would allow the state to sell $500 million in bonds for green school projects.

To finance it, the recent legislative session’s new tax on bottled water would be implemented permanently. In filing the ballot title challenge, AWB is calling for transparency of the financing tool imposed by lawmakers.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.