The basis of much conservative commentary in Minnesota is that overpaid government employees are causing Minnesota taxpayers to be gouged.  With this week’s news that Governor Dayton is giving 35,000 state workers a raise, we can expect to hear a lot more of that type of commentary.

I have a lot of conservative friends, and I get very concerned for their health when such news causes them to hyperventilate en masse.  Because I care for them, I want to put their minds at ease.  Here goes:

Minnesota state workers make less on average than private sector employees.  According to an analysis by the Economic Policy Institute:

• On an annual basis, full-time state and local workers and school employees are undercompensated by 11% in Minnesota, in comparison to otherwise similar private-sector workers. When comparisons are made for differences in annual hours worked, the gap remains, albeit at a smaller percentage of 7.9%.
• Minnesota public-sector workers are more highly educated than private-sector workers; 60% of full-time Minnesota public-sector workers hold at least a four-year college degree, compared to 37% of full-time private-sector workers.
• Minnesota state and local governments and school districts pay college-educated workers on average 25% less than do private employers.

Moreover, the 2% pay increase that Dayton approved for state workers is hardly extravagant.  In fact, it puts them a little further behind most workers.  Robert Half International recently made the following projections for private sector workers in 2013:

• Starting salaries are expected to rise an average of 3.3 percent for accounting and finance positions…
• Base compensation for information technology professionals is expected to increase an average of 5.3 percent…
• Salaries for administrative professionals are anticipated to rise an average of 3.5 percent…

(By the way, the average salary of an S&P 500 CEO has been increasing a little bit more than the 2% state workers are getting.  In 2010 and 2011, it increased by 23% and 14% respectively, to an average of about $13 million per year, about 380 times the wage of the average U.S. worker.)

Finally, Minnesota taxpayers are not getting mugged at the hands of our underpaid public servants.  Far from it.  The “price of government” – the sum of all state and local government taxes and fees charged, expressed as a percentage of statewide personal income – has decreased over the years, not increased.

Even the Dayton budget, which is causing my conservative friends to threaten a mass exodus to rival the Israelites fleeing brutal Egyptian enslavement, merely flattens the downward trend line.  As this graph from Minnesota 2020 shows, the Dayton budget proposal doesn’t begin to restore us to the price of government we were paying in the late 1990s, when the economy was booming.

So for my conservative friends, I have this advice:  Read this post repeatedly, breathe into a paper bag, stay away from KTLK and True North, and rest comfortably knowing that state government workers continue to fall further behind the rest of the workforce.

– Loveland