The American Federation of State, County and Municipal Employees Council 72 (AFSCME), a big government union representing various health, service, and maintenance personnel employed by the state government, is complaining about state employee compensation. The claim that Missouri ranks 50th for state worker pay is at the crux of their argument. This point is wildly misleading.
Missouri has nearly the lowest cost of living in the country. Each dollar I spend in Missouri goes quite a bit further than it would in a high cost-of-living state, such as California or Maryland. As a result, residents of low cost-of-living states, even if paid less, might be able to afford more than people working the same job in a high cost-of-living state. A comparison of pay among the states that does not adjust for regional differences in the cost of necessities like rent, food, and gas is not very meaningful.
A better way to determine whether state employees are underpaid would be to compare state employee compensation with the pay of people performing similar jobs in the private sector. How much do maintenance workers, office clerks, and lawyers make working for the government versus working for a private business located in Missouri?
Andrew Biggs and Jason Richwine of American Enterprise Institute looked at state employee compensation this way. They found that in Missouri state employees often make more—by an average of 7 percent—than comparable private-sector workers when the value of benefits is factored in. In other words, Missouri state workers are not in urgent need of an across-the-board pay increase; in fact, they’re often compensated more generously than their private-sector counterparts.
Perhaps we shouldn’t fault AFSCME for using misleading information to suggest that Missouri state employees are underpaid. It’s not AFSCME’s job to conduct a serious study of the adequacy of public employee pay; AFSCME’s job is to get more for its members. Members of the public should keep this in mind any time a government union issues a statement on public policy.