On August 4th an interesting analysis of public sector compensation was posted on the blog Inflection Point Diary entitled “How to Figure Out How Much Money a Local Government Manager Makes.” In this decidedly conservative analysis, the conclusion was that “real annual compensation [is] at least 33 percent higher than the ‘salary’ the city would have told you about if you called to ask this question.”
This 33% is typically called salary overhead, and must include the current year funding required for everything not included in straight salary – such as the value of all current employee benefits, as well as the current year funding requirements for all future retirement benefits for the employee. In the private sector, a generous overhead percentage would be about 25% – about 9% for the employer’s contribution to social security and medicare, a 6% employer contribution to the employee’s retirement savings account, and roughly another 10% for the employer’s contribution towards the employee’s current health benefits.
If only the difference between private sector employee overhead were only 33% vs. 25%, however. In reality, because public sector employees receive defined retirement benefits that are anywhere between 3x and 10x (that’s right 10x, ref. Social Security Benefits vs. Public Sector Pensions) better than someone with a similar salary history can expect from social security, and because these future benefits must be […] Read More
Working from the bottom up, it is virtually impossible to extract accurate figures to quantify just how much money public sector unions spend on political activity. For example, money spent at the state level on politics, as tracked by the National Institute on Money in State Politics, or, in California, as tracked by the California Fair Political Practices Commission, only track one subset of political spending. These figures, staggering though they may be, don’t show data for local races (every city council, county board of supervisors, water board, school board, police commission, fire commission, etc.) – and, equally significant, these databases are unable to clearly identify the source of donations that have been run through foundations or independent expenditure campaigns, or political parties – often several times – before appearing on a candidate or issue campaign’s disclosure report.
For these reasons, in order to get a good idea of what public sector unions are really spending on political activity, you have to work from the top down. Using California as an example, you can estimate how much public sector unions spend on state and local politics each year if you can accurately identify three variables: (1) How many public sector workers are members of unions, (2) what the average annual union dues payment is per worker per year, and (3) what percentage of union dues are used by the unions for political activity.
Answering the first […] Read More