The Gap Between Private and Public Sector Workers Can’t Keep Growing Forever

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From the New York Times:

President Obama plans to sign an executive order requiring that janitors, construction workers and others working for federal contractors be paid at least $10.10 an hour, using his own power to enact a more limited version of a policy that he has yet to push through Congress.

I wonder how this plays out politically? On the one hand, public support for a higher minimum wage is very broad. On the other hand, this reinforces the widening gap between private sector workers and those who are paid (directly or indirectly) by taxpayer dollars. One side watches its wages stagnate and its standard of living drop, while its taxes are used to fund ever higher wages for the lucky few working for the government.

It’s not clear how this is going to play out on the broader political stage. There’s already been a backlash against unionized state and local workers, who have seen their wages and pensions increase during the recession, while the taxpayers who fund them have seen their wages drop significantly during the same period. But how does this story end? With voters rebelling against higher wages for government workers? Or with voters rebelling against the miserly wages of the private sector? I don’t know. But at some point, something’s got to give.

UPDATE: I didn’t get into the comp details in this post, so let me just add a little bit here. My read of the evidence is that, as of a few years ago, government workers at low and mid-range pay levels were generally (but not universally) better compensated than similar private sector workers. The gap was small, but real, and over the past several years it’s almost certainly increased.

The story is different at higher wage levels. Executives, doctors, lawyers, scientists, and so forth are paid quite a bit better in the private sector than they are in government jobs.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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