Public vs. private pay round II: reader comment and more

I got an interesting letter from a reader last week who wanted to comment on my previous post exploring the merits of public vs. private employee pay and benefits.

She wasn’t able to post a comment on the story at the time, so I am taking the liberty to post her letter here. Enjoy.

I work as an accountant in the private sector, but have also worked in public sector. I see all the salary information, pension agreements, I can see personal files, level of education. I built excel sheets where I import salary data against level of education, and guess what, Ted? (Note: My friends from high school call me Ted. I hate it. My name is Daniel. UPDATE: I was not implying Allison is my friend. She isn’t. She accidentally called me Ted, which, sadly, isn’t uncommon) If you get an education, you make more than those who don’t, across the board. The real losers in this game are the people that believe that they suffer from outlier syndrome, and think that showing up for work everyday on time with no education beyond high school is going to make them a millionaire. We have raised, in my opinion, two generations of individuals that live under the entitlement system, they feel underpaid because they are so out of touch with reality.

The reality is that an employee is an expense and a liability to an employer, public and private. The people that get paid well, understand their place on the balance sheet and income statement. They are involved with the business more than just 9 to 5. They seek out new business, bring ideas about cost reduction. They don’t use up every hour of their sick allowance or personal days. In short, they minimize their expense to the company and maximize their
ability to contribute to income. Have you ever met a dedicated employee that also takes every single paid day off that they can? Is this in the best interest of the company to have an employee out on personal leave, sick leave, and also vacation 20 to 30 business days a year? It’s work, not get paid to feel important while your at home playing with your G4 phone.

If I went to our CEO and started telling that person I was underpaid and deserved a COLA adjustment, there’s a high probability that I would be laid off, because that request is not rooted in reality. Human beings are priceless. Employees are expenses that must be managed for a business to remain profitable, or for a public service agency to maintain funds for appropriate

In the coming decade, we are going to have the crap taxed out of business and individuals, so we are still in a trend where there are going to be fewer and fewer resources. The time for belt tightening is here, and won’t have any real upward movement for several years. We will have a better economy and better pay when the indicators start perking up, new home starts, jobless
claims, CPI, etc. Those indicators are very real, and are the reason everyone
can’t “make bank” like we did in the 90’s.



I don’t want to dissect this in depth, but I do want to offer up a couple comments.

First, I think her initial hypothesis is right and wrong. I went to college and I have plenty of friends with degrees who are underpaid and overworked. In fact, much of the empirical data (and here) out now suggests a college degree doesn’t exactly mean you are going to be swimming with Scrooge McDuck. That may contribute to people’s perception of being under paid, i.e., they believe they should be paid more because their worth – based on education, intelligence, experience, etc. – is more than their value – actual job duties.

As for the paragraph on valuable employees who go beyond what is asked, I think the conundrum a lot of people face today is motivation and priorities. For career driven individuals whose work is their life, this statement makes sense and the ends justify the means.

For the average worker, they believe the basic 9-5 aspects of their job, done well, are credit enough to earn a wage that allows them to provide for their family, live somewhat comfortably (I’m not talking Mariah Carey comfortable) have security, the ability to continue their way of life past retirement, and – the big change in today’s world – the opportunity to have a life outside work that provides fulfillment. Is that possible when – in order to get a raise, better pay, have job security – you are actually not asked to do your job, you are asked to do your job and someone else’s? Is that fair? Does fair matter?

Last, I want to address this statement: “Human beings are priceless. Employees are expenses that must be managed for a business to remain profitable, or for a public service agency to maintain funds for appropriate programming.”

Employees hate to hear they are a dime a dozen. Even more, they hate to be looked at as mules, there to be worked to provide for someone else’s riches. But Allison’s point can’t be overlooked. Businesses have to do what is necessary to survive at times. What is difficult is being able to tell when it is survival and when it is greed. (On both sides of the coin, employees and employers)

In the end, what is the more successful business? One where managers are able to boost production and profit at all costs and keep a select group of executives highly paid and successful or one where the mass of employees are happy and successful and the profit margin is marginalized?

Depends on your definition of success.

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