If you look at the New York State Department of Labor website, wages in New York appear to have been rising steadily for years, even during the recession.
But in reality, most workers have seen the real value of their weekly wages decline. Because the department no longer adjusts wage data for inflation, workers appear to be earning more, even though they are not.
In its annual “State of Working” report, the Latham-based Fiscal Policy Institute found that median wages have declined upstate, with one exception: women in managerial/professional jobs saw a small increase, 2 percent, in their median wages. In contrast, managerial/professional males saw their wages fall by 6.8 percent. Men and women in non-managerial/non-professional positions saw their median weekly earnings drop 5.9 percent.
In last year’s report, the Fiscal Policy Institute found that real median wages have not risen since 1990, “despite considerable productivity growth over this period”; between 1990 and 2008, the median wage in New York, when adjusted for inflation, grew only 3.4 percent.
James Ross, a labor market analyst with the state Department of Labor, said that workers in education, government and health care are most insulated from the effects of the recession because there’s always a demand for the services workers in those areas provide.
According to the conservative Empire Center for New York State Policy, private-sector wages dropped 4.2 percent from 2007 to 2009, while the average state and local government wages rose 5.7 percent. In 55 of New York’s 62 counties, the average salary for state and local government jobs is higher than the private-sector average.
“Government jobs are not only virtually recession-proof — on average, in the majority of New York communities, they pay more, too,” the organization writes in a 2010 report titled “New York’s 21st Century Jobs Slump.”
“While New York’s private-sector economy has yet to fully recover from its latest downturn, state and local government remains at an all time high. Government workers remain more secure, and generally better compensated than private-sector workers.”
The report notes that the latest estimated statewide average salary for all jobs in state and local government is $51,520, which is 88 percent of the private sector’s $58,850 salary average. “However, the private-sector figure is inflated by a large concentration of highly paid jobs in Manhattan’s financial sector,” the report says.
Last year the left-leaning Economic Policy Institute, based in Washington, published a paper, called “Debunking the Myth of the Overcompensated Public Employee,” saying that public-sector workers, on the whole, earn less than those in the private sector.
The paper, by Rutgers University professor Jeffrey Keefe, found that, after controlling for a number of factors, including level of education, hours worked and non-cash compensation, full-time state and local employees are undercompensated compared to “otherwise similar private sector workers.”
Keefe found that private-sector workers earned average annual wages of $55,132, compared to the $49,072 earned by public-sector workers. When he looked at benefits the gap narrowed, but private-sector workers still earned $2,001 more per year than public-sector workers. Overall, Keefe found that state and local employees are substantially more educated than their private-sector counterparts; about 54 percent of state and local full time employees hold a bachelor’s degree, compared to 35 percent in the private sector.
In the Capital Region, the average state worker earned $55,442 in 2009, according to the Empire Center, while the average local government worker earned $41,215. Combined, state and local government workers earned an average salary of $48,397, according to data from the New York State Department of Labor. In comparison, the average private-sector salary was $41,596.
Tim Hoefer, director of the Empire Center for New York State Policy, said there was once a perception that public employees were underpaid, but that over the past 10 to 15 years public employee salaries have been rising.
“There’s been a change in the tide,” Hoefer said.
Hoefer said private-sector salaries have dropped “because the private sector is controlled by the market. You can only pay employees as much money as you have.”
Mark Rank, the Herbert S. Hadley Professor of Social Welfare at Washington University in St. Louis, said that overall wages have remained fairly flat over the past two or three years, with the average wage for people working full time dropping about 4 percent.
But he said longer-term wage trends suggest that most American workers have not made substantial wage gains since about 1973, and are actually earning slightly less money than they did back then. Most gains have been concentrated in the top 20 percent of earners — those earning $85,000 or more.
“For the last 35 years, the typical worker has not been getting ahead,” Rank said.
Men, in particular, have not fared well. In 1973, the median wage for men was $48,000; when adjusted for inflation, the median wage for men in 2009 was $47,000.
Women, he said, have made some progress, but they still earn less than men.
In 2009, the average median wage for women was $36,000, when adjusted for inflation, compared to an average median wage of $28,000 in the early 1970s.
“The gap between men and women has narrowed, but the reason it has narrowed is because male earnings have been flat,” Rank said.