In the comments to my previous post, people raised a very valid question: Maybe the difference between the public and private sectors reflected the difference in the composition of the workforce.
So I did the same exercise for managers and professionals in the public and private sector. Here is the chart.
The lines are bouncier because I had to use data that was not seasonally adjusted. But the basic trends are the same–since early 2005, real compensation gains for public sector managers and professionals have outstripped the compensation gains for private sector managers and professionals. The gap is somewhat smaller than in the previous post, but it’s still there.
Now, let’s agree what this chart does not say. It doesn’t say whether public sector workers are paid more or less than their private sector counterparts, especially after adjusting for age and education (a thank you to Dean Baker who pointed this out to me). It also doesn’t say whether private sector pay will rebound faster in the recovery. But it does help suggest why states and cities are struggling financially.