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AFL-CIO Now

Compensation in Public, Private Sector Way Behind Productivity

Opponents of working families and their unions have tried to pit public workers against those in the private sector, by fomenting an internal class warfare centered on disparate wages and benefits.

One of their real goals is to hide the uniting factor of both groups: Compensation has stagnated for ALL working people even as they produce more.

In fact, both public-sector and private-sector compensation has seen comparably modest growth: up 20.5 percent in the state/local sector, up 17.9 percent in the private sector, according to a new study by the Economic Policy Institute (EPI). In contrast, hourly productivity grew 62.5 percent between 1989 and 2010—more than three times as fast as compensation grew in either the public or the private sector.

Working people have more in common with each other, whether they work in the public sector or private, than they do with the wealthy elite. But it’s in the interest of corporate CEOs and their lawmaker puppets like Wisconsin Gov. Scott Walker and Ohio Gov. John Kasich to sow seeds of resentment and deflect the real issue: The haves are getting rich and fat at an enormous rate, at the expense of the rest of us.

Forbes’ 2011 Billionaires List released yesterday breaks two records: total number of listees (1,210) and combined wealth ($4.5 trillion). As Forbes writes:

This horde surpasses the gross domestic product of Germany….

The reality is, public-sector workers make somewhat less than those in the private sector when education is factored in. As EPI points out, the real issue for workers in this nation is that neither public- nor private-sector employees:

have seen their pay grow in tandem with the increase in the economic output that has been produced, a reflection of the continuing erosion of good jobs and the downward pressure on wages from globalization, deunionization, an eroded minimum wage, high unemployment, and other factors.   

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