A look behind Maine’s salary spread.

A thousand years ago, William the Conqueror heard the gripes, too.

Barons complained the English king overpaid his sheriffs. They may not have complained too loudly – his other nickname was William the Bastard – but it shows that wages for government employees have been a source of angst for an awfully long time, said economist Charlie Colgan.

Flash forward to present-day Maine, where the average person makes 76 cents for every $1 pulled in by a state worker. Only four other states in the country have a gap that severe.

Scott Moody of the Maine Heritage Policy Center says state workers not only earn more, but he points to numbers that show they receive, on average, benefits that are nearly twice as generous as those in the private sector – also one of the biggest divides in the country. He titled a policy center brief last fall a “State Government ‘Gravy Train’ Update.”

“We found a lot of positions where a lot of people were earning more than the governor,” Moody said. “There’s a fundamental problem with the way we pay our state workers.”

However, state workers’ biggest union touts figures that show the opposite. It’s hoping an ongoing study of 7,500 union members’ wages will show workers deserve more money, not less.

While Moody has his figures, Chuck Hillier, an assistant negotiator for the Maine State Employees Association SEIU Local 1989, has his own. He gave sample salaries to the Legislature this winter to prove Maine state workers were actually underpaid compared to the private sector. Three years ago, when a small review showed nearly all 2,500 union clerical positions earned less than like jobs in the private sector, the state agreed. Everyone eventually got a raise.

That could certainly happen again.

So who’s right? Are state workers overpaid or underpaid?

Pick an average, any average

Here’s what is known:

Numbers from the U.S. Census and federal Bureau of Economic Analysis comparing state workers to everyone else in Maine with a job show that state workers – from the governor to a janitor – earn an average of $43,291; private workers – from a CEO to a part-time clam digger – average $33,048.

The first number puts Maine solidly in the middle of the pack for average state government pay compared to other states (rank: 26th); the second number puts Maine close to the bottom nationally compared to average private pay (rank: 45th).

Only in Maine, Montana, Wisconsin, Vermont and Iowa did private workers earn 76 cents or less on the dollar compared to state workers. In eight states, Massachusetts and New York among them, private sector workers actually brought home more.

Asked about the difference, some state wage experts cautioned that broad comparisons of state and private worker pay in Maine are tricky; averages can swing wildly depending on the figures chosen.

Colgan, a former state economist now at the University of Southern Maine’s Muskie School, said an apples-to-apples comparison is tough, and not necessarily even appropriate. One big hitch, he says: Some people in the private sector farm, fish or sell lanyards out of the basement; the state doesn’t have jobs like that.

Exclude the self-employed, farmers and the military, Colgan said, and the Bureau of Economic Analysis figures for Maine show the average private sector job pays $46,082 versus an average $43,000 for state and local government.

Part of the reason that average bounces up: Maine has the second-highest rate of self-employment (read: lower-paying jobs) in the country, according to the Census. One of every 11 people here works for himself. Only Vermont had a higher rate.

Other reasons for a pay difference, Colgan said, include a more educated workforce in state government, less seasonal employment for state workers and the need for incentives, in some cases, to entice skilled workers into longer commutes.

Unions are also a recognized factor. Last year, the MSEA negotiated for 10,000 employees in the executive branch a $700 lump sum payment, a 2 percent raise this July and a 4 percent raise come January – boosts that most in the private sector aren’t seeing.

“I frankly suspect that outside of unionized workplaces and Wall Street, people aren’t getting raises or they’re very modest, in line with 1 or 2 percent,” Colgan said.

But even if, after factoring in all the exceptions, state pay is higher than private pay in Maine, “Does this reflect the strength of state and local wages or the weakness of the private sector?” Colgan asked.

Cut state worker pay, and private pay won’t automatically buoy up, he said.

Christopher St. John, at the Maine Economic Policy Center, agreed with Colgan’s assessment: A comparison of averages “does not adequately address the range of jobs in the private sector.” He added his own concern: If the state pays its employees so little that they qualify for state aid, “that would be ironic and bizarre.”

But Tony Payne, executive director of the Alliance for Maine’s Future, found irony in the fact that the legislative staff this past winter negotiated 3 percent raises retroactive to October, and another 3 percent next October, all while the state was in the middle of a $190 million budget shortfall.

Adding up the benefits

Payne’s reaction to the state and private divide: “What it tells me, the question that needs to be answered is … position to position, how do these state workers stack up?” Secondly, “what’s the ability of state (residents) to pay for a pay-and-benefit package that’s better than their own?”

After a Taxpayer Bill of Rights failed two years ago, Moody, vice president of policy and chief economist at the Maine Heritage Policy Center, said his group was asked, “Well, what would you cut? Where’s the fat in state government?”

It found two spots: Medicaid and compensation to state workers.

Using figures confirmed by the Bureau of Economic Analysis, Moody found the average benefits package for state workers was $12,979, almost double private sector’s $6,727. The comparison excludes farmers and the self-employed, which, when included, make the disparity greater.

By statute, Maine covers 100 percent of state employees’ health insurance premiums. In negotiated contracts, it also covers 100 percent of dental insurance premiums. A proposal on the House floor this winter to have state workers pick up some of the tab didn’t go anywhere, but $2 million was cut from the health-care budget, said Bruce Hodsdon, president of Local 1989. Faced with cuts before, deductibles and co-payments have gone up.

That sort of full coverage is in the minority.

The National Association of State Personnel Executives’ 2006 health care white paper found that big private employers, on average, paid 80 percent of workers’ health-care premiums. States typically paid more. Maine was one of 16 to cover the whole bill for its employees.

The state will spend roughly $434.7 million on personnel services this year, everything from overtime pay to retiree health care, according to Maine’s Bureau of the Budget.

Of concern to Moody are the state salary and benefit packages being offered and keeping up with the state retirement benefits already promised. There’s a multibillion-dollar gap between what will be due and what’s been budgeted, Moody said.

With pensions going by the wayside in the private sector, Payne favors a slow move to worker 401(k)s, with employees bearing more cost. “I’m sure there’s a way to do it that it won’t be a shock to the system.”

In Vermont, where trends run similar to Maine, Jeffrey Carr at Economic & Policy Resources Inc., said state workers are experiencing greater job security and a rise in pay that’s exceeding that of private workers. “At some point, something’s going to give here. I don’t know when that’s going to be.”

Carr, a New England Economic Partnership economist like Colgan, said there hasn’t been a public outcry, but added that it’s not a state union negotiation year. That comes next year for Vermont.

Ongoing review

According to Hillier, with the Maine union, a comprehensive state wage study hasn’t been done since the 1970s. In the first step toward that, in 2002, representatives from the state and the union began reviewing the state’s 2,500 clerical positions, ultimately revamping the pay scale and updating job descriptions, in some cases, scraping outdated references to “typing pools” and “onion paper.”

Comparisons were made with private-sector jobs using Maine Department of Labor averages, when available. Results were plotted and assigned points, resulting in a new eight-step pay scale. It took 17 months to adopt.

Union president Hodsdon said most state wages paid less than the private sector, anywhere from a few pennies to a dollar an hour less. “I was a little surprised.”

In regard to benefits, “We believe strongly that everyone should have health insurance,” he said. “Years ago, when I started working, the state had really good health and dental coverage, then everyone caught up to us.” But with cutbacks in the private sector, state benefits are looking attractive again.

Hillier said three new pay studies covering the 7,500 state employees in Operations, Maintenance and Support Services (plow drivers, plumbers); Professional and Technical Services (crime lab, accountants, auditors); and Supervisory Services (supervisors) were begun last year.

“We’re finding that there’s wide disparity between these jobs and their private counterparts,” Hillier said, with state workers in those groups averaging on the low side.

When the pay gets too low, recruitment becomes an issue, he said. In the 1990s, nurses could earn more by working one weekend in Boston than one week at a state hospital. There’s still a crisis in keeping nurses at the two big mental health facilities, Hillier said.

Any belief that state workers have it good, or too good, is “just not accurate,” he said. “There are forces at work behind Maine’s standard of living – lowering Maine employee benefits is not the answer.”

Moody’s in line for a copy of the new pay studies. He allows that some state workers may earn below the private-sector average. Figures could be skewed for another reason: “It might turn out to be it’s just a couple hundred (state-employed) folks are earning much more than six figures.”

One of the three pay studies is hoped to wrap at the end of this year, the other two in 2009.

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