More Researchers Note Michigan’s Outsized Public Employee Compensation

For nearly four years, the Mackinac Center for Public Policy has been warning policymakers of the growing costs of public-sector workers’ salaries and pensions.

Now, it has become a popular tune.

MIRS News reported this week that the House Fiscal Agency has released a report highlighting the problems of rising public sector compensation.

The HFA report states that although the number of state employees dropped 18.2 percent since 2002, total compensation for these fewer employees has jumped from $3.9 billion in 2001 to $4.8 billion in 2010.

Donald Grimes, a University of Michigan economist, told The Detroit News: "Our private sector workers have just been killed — that's what everyone should keep in mind. The private sector just can't afford the public sector as it's structured. In 2000, they could."

In December of 2010, Mackinac Center fiscal policy analyst James Hohman wrote, “Michigan governments would save $5.7 billion if the employment benefits of Michigan’s state and local government workers were set at private sector averages.”

Michael LaFaive, director of the Mackinac Center’s Morey Fiscal Policy Initiative, brought up the issue of the rising price of state and local government in a February 2007 report.

“We are delighted that other scholars and observers are pointing out what we made public,” LaFaive said.

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