Restoring longevity pay for state workers is wrong

A Big Labor-backed measure to restore longevity pay to taxpayer-paid state government workers is being worked through the legislative process. Last year, longevity pay was eliminated to rein in excessive state government compensation packages to help close the budget deficit. Now, Gov. John Baldacci, supported by Senate President Elizabeth “Libby” Mitchell and the Maine State Employees Association, is proposing budget gimmicks to continue handing unionized state workers perks unheard of in the private sector.

Restoring longevity pay while Mainers in the private sector face layoffs and pay cuts is simply wrong.

For most state workers, longevity pay begins with 15 years of employment and results in a 30 cent per hour pay increase. The longer a state employee stays, the higher the longevity pay. At 20 years it increases to 40 cents per hour and at 25 years it increases to 50 cents per hour. This is not a reward for better job performance, only for marking the passage of time.

Instead of cutting longevity pay, the governor now proposes to delay payroll for state workers by three days, so the expenditure falls in the next fiscal year. By catering to the MSEA, Baldacci would perpetuate Maine’s budget crisis for the next governor and further burden Maine taxpayers.

To better understand why restoring longevity pay is wrong, consider the difference in pay between state government workers and private sector workers. According to the U.S. Department of Commerce’s Bureau of Economic Analysis, in 2008, the average Maine state worker took home $39,340 in wages while the average private sector worker in Maine took home $36,843.

Therefore, the average state worker earned 6.8 percent more in wages than the average private sector worker. Nationally, the average state worker earns 3.3 percent less than the average private sector worker. Restoring longevity pay worsens this disparity between state workers and private workers in Maine, relative to the rest of the country.

When generous state benefits such as pensions and retiree health insurance are added to wages, the gap with the private sector widens considerably. In fact, in 2008, total compensation (wages plus benefits) for the average Maine state worker was $52,789 while total compensation for the average private sector worker was $44,444.

Therefore, compensation for the average Maine state worker was 18.8 percent higher than the average private sector worker. Nationally, compensation for the average state worker is only 5.1 percent higher than the average private sector worker’s. Addressing this over-compensation would have saved state government more than $172 million in 2008. Keep in mind these statistics pre-date the current recession and the gap between public and private sector pay will grow larger in the future.

Not surprisingly, Big Labor is working to restore longevity pay. Recently, MaryAnne Turowski, legislative director for MSEA, confirmed that nearly 50 percent of MSEA’s members collect longevity pay. This exposes the blatant money-grab of our hard-earned tax dollars by MSEA to advance their members' own narrow self-interest.

Before listening to MSEA’s self-interested plea, Augusta lawmakers should first consider the plight of Maine’s private sector. Between December 2000 and December 2009, Maine’s private sector lost 20,600 jobs—the “lost decade” for private sector job growth. More troubling, Maine’s current private sector employment of 486,900 is at a level not seen since March, 1999.

On the flip side, Maine’s state government employment is virtually unchanged from a decade earlier at 27,200. Additionally, local governments employed another 59,900, also unchanged from a decade earlier. Overall, Maine’s combined government workforce was 87,100 in December, 2009—nearly 1 in every 5 Mainers in the workforce was employed by state or local government.

This stark contrast between the growth in private sector employment versus government employment should give pause to lawmakers seeking to further reward public sector workers at the expense of the private sector. It is also simply unfair to ask Mainers struggling to pay their mortgage, put food on the table and heating oil in the tank to continue shouldering this burden for a unionized government workforce whose ungrateful leaders always demand more, no matter the cost.

J. Scott Moody is chief economist at The Maine Heritage Policy Center, a Portland-based free-market think tank. Mr. Moody can be reached at jsmoody@mainepolicy.org.