Overpaid?

"I'll be back"
- Arnold Schwarzenegger, line from several movies

According to the Washingtion Times, a study based on 2009 salaries found that,

More than 77,000 federal government employees throughout the country — including computer operators, more than 5,000 air traffic controllers, 22 librarians and one interior designer — earned more than the governors of the states in which they work. ... Of those workers, 18,351 were doctors — the highest percentage. The second-highest total was for 5,170 air traffic controllers. ... In Maryland, 7,283 federal employees — about 7 percent of all full-time federal employees in the state — earned more than Gov. Martin O'Malley’s $150,000 salary. ... nationwide there were 122 park rangers, 271 environmental protection specialists, 14 chaplains and one prison guard who earned more than their governors.

The highest earning governor was California at $212,179 although Arnold Schwarzenegger did not accept the money. Still 703 federal workers in California earned more than that level of pay. Maine’s governor made the lowest salary at $70,000

Bottom Line

Is a governor's salary a reasonable cap for civil servant earnings? You decide. Are some governors underpaid or are we overpaying Federal employees?

Democracy or Mob Rule

Recent events in Wisconsin have me very worried.

“It has been said that democracy is the worst form of government except all the others that have been tried.”
- Winston Churchill

When our founding fathers created our system of government, they knew they did not want a king (monarchy). But they also did not want a true democracy like ancient Greece where all eligible voters (white-free-males in Greece) could debate and vote directly on the law.

“A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”
- Thomas Jefferson

“Democracy means simply the bludgeoning of the people by the people for the people.”
- Oscar Wilde

The people can be fickle or selfish, swayed by demagogues, swept away with the passion of the moment, etc. The founding fathers did not trust the people to govern wisely.

“The best argument against democracy is a five minute conversation with the average voter.”
- Winston Churchill (not a founding father but a great quote anyhow)

So the founding fathers created a compromise - a Representative Democracy where the people elect the legislature that makes the laws. If a lawmaker make bad choices he/she can be replaced in a few years. If the people are really displeased they can hold a recall to fire the lawmaker if a majority agrees.

What the protesters are doing in Wisconsin is NOT democracy. It is mob rule, it is anarchy. A small group (even 50,000 protesters is just 1% of the population of Wisconsin) is trying to block their elected representatives from doing the job the majority elected them to do.

The true test of a representative democracy comes not in an election, but in the aftermath of an election. If the losing party or parties recognize their loss and continue to participate in the process of governance, then representative democracy works. When the losing side refuses to participate and boycotts governance, especially in such a manner that vital legislative work is obstructed, then representative democracy itself is threatened.
- Edward Morrissey

It is shameful that teachers would claim they are practicing democracy when they lock the capital door with handcuffs, block and intimidate lawmakers from entering the capitol, make death threats, etc. Instead what they are saying by their actions is that what they want is more important than elections, more important than the state Constitution and the practice of law, more important than majority Will.

If they want to practice democracy, start a recall petition. Then elect someone to overturn the law they oppose. That is how representative democracy works in America.

(P.S. Both sides of the conflict have started recall efforts. It will be interesting to see the results.)

Bottom Line

Even if you favor the Union position and hate what Governor Walker is doing, please recognize that the protesters have gone too far. As Americans we have the freedom to criticize our leaders and to march and organize protests. We have the freedom to fire our leaders if we can get majority support in a recall. But we do not have the right to block lawmakers from the lawful execution of their duties or to threaten their lives. We do not have the right to "take over" the government because our side is losing. Those who do so are making a mockery of democracy and putting themselves above it.

Comparing Apples to Oranges

“Our progress as a nation can be no swifter than our progress in education. The human mind is our fundamental resource.”
- John F. Kennedy

I've been closely following events in Wisconsin regarding Governor Walker vs the Public Sector Unions (notably Teachers) but have resisted blogging about it because it's a hot button topic for many people. What did catch my eye that I would like to share is the battle over statistics. Both sides have their talking points and "facts" to back them up. And when "facts" are challenged, neither side is eager to cede the point and admit error. So bad "facts" persist and keep being used in arguments.

A blog post by IowaHawk takes to task Paul Krugman, Nobel Winning Economist, who writes for The New York Times. Krugman wrote,

Only 5 states do not have collective bargaining for educators and have deemed it illegal. Those states and their ranking on ACT/SAT scores are as follows:
South Carolina – 50th
North Carolina – 49th
Georgia – 48th
Texas – 47th
Virginia – 44th

This is very damming evidence and a popular statistic used by pro-Union teachers. But IowaHawk dives deeper into the numbers. He notes that a student's race is a bigger factor on SAT scores than teacher performance.

A state's "average ACT/SAT" is, for all intents and purposes, a proxy for the percent of white people who live there.

Statistically, on average, white students get higher ACT/SAT scores.This has nothing to do with innate ability or genetics or aptitude of individuals. Instead economic differences (poverty), racism, family environment, and other society biases are to blame.

Wisconsin is 4% Black and 4% Hispanic. Texas is 12% black and 30% Hispanic. Since race influences average ACT/SAT scores, to make a fair comparison, students in the two states should be compared by race.

Here are numbers from the National Assessment of Educational Progress (NAEP), an annual standardized test given to 4th and 8th graders around the country to measure proficiency in math, science, and reading.

2009 8th Grade Math
White students: Texas 301, Wisconsin 294 (national 294)
Black students: Texas 272, Wisconsin 254 (national 260)
Hispanic students: Texas 277, Wisconsin 268 (national 260)

There are more stats at IowaHawk for 4th grade & 8th grade Math, Reading and Science but the numbers displayed here are typical. Within racial groups, all Texas students are above the national average and score better than Wisconsin. In Wisconsin the White students perform at or slightly above the national average, Hispanics above the average, and Black students below the average.

So instead of showing that Union Teachers are better, a nationalized 4th/8th grade test shows that Wisconsin produces average White students and poorly scoring Black students. Is this the final answer? Perhaps not. Perhaps a better Statistician will analyze the scores a different way to show something new and revealing.

For example other blogs point out another interesting difference in the SAT scores for Wisconsin vs Texas.
In 2010 Wisconsin placed 3rd in the nation on SAT scores. But only 4% of Wisconsin students took the SAT. This is known as selection bias. When only the best take a test, of course they perform better. 67% of Wisconsin students took the ACT and this dropped Wisconsin to 13th place. Still very, very good but it shows the difference that can occur in ranking depending on which students are tested.  In Texas 53% of all students took the SAT and 30% took the ACT.

Katherine Levin, a College Board spokeswoman for SAT calls comparisons between states "invalid" since the students taking the test are self-selected.

Levin, Feb. 25: Media and others often rank states, districts and schools on the basis of SAT scores despite repeated warnings that such rankings are invalid. The SAT is a strong indicator of trends in the college-bound population, but it should never be used alone for such comparisons because demographics and other nonschool factors can have a strong effect on scores. If ranked, schools and states that encourage students to apply to college may be penalized because scores tend to decline with a rise in percentage of test-takers.

Yet another factor to consider is poverty. Texas ranks 8th in most residents living below the poverty line. Wisconsin is 38th. So instead of saying Union teachers produce better college scores, we could use WI vs TX to prove that rich kids score better than poor kids.

Bottom Line

Beware of any argument based upon comparing "averages" without knowing the population mix behind the average. For example I could compare two colleges and show that students at A are on average shorter than B; so B must be biased against short people. What I don't reveal is that A is an all-girl school and B is not. Since girls are shorter on average than boys, this will pull down the total height average for school A.

Suppose the Ivy League schools argued that they had the most talented professors because their students (on average) get more of the most prestigious and well-paying jobs. The professors would be ignoring the fact that many of the brightest students, and students from the richest and best socially connected families, attend Harvard & Yale. So teaching ability could be just average and yet selection bias and social advantages give the students a preference in hiring. Some Wall Street firms hire ONLY from the Ivy League and look what resulted - a near collapse of the Financial System in 2008.

Update

A report showing it's the student, not the college, that determines success.
http://washingtonexaminer.com/blogs/beltway-confidential/2011/03/more-evidence-going-fancy-college-doesnt-pay

Public sector jobs - not just a US problem

"It was the best of times, it was the worst of times"
- A Tale of Two Cities by Charles Dickens

Instead of two cities the Dicken's quote now applies to a tale of two working classes - a state sector awash with taxpayers' cash while the rest of the economy struggles to stay afloat. A recent study by centre-Right think tank Policy Exchange shows that Public employees in the UK work nine years less than their private sector counterparts AND are paid 30 per cent more.

Those in the private sector work 23 per cent longer - equivalent to an extra nine years and ten weeks - than public sector employees. This is thanks to a combination of shorter hours, more time off and earlier retirement for public workers. Now it used to be that these public benefits compensated for lower pay. You had to offer something to encourage talent to give up high paying private jobs and work for the state instead. But today the public sector has better benefits AND better pay. The report says that on an hourly basis, the typical public sector worker is 30 per cent better paid than their private sector counterpart.

And the retirement pensions are quite generous for public workers. Ironically when 63% of the private sector workers retire without any pension at all, they will still be taxed and paying for a comfortable retirement for civil servants.

Bottom Line

In many countries the fox is in charge of the hen house. The government pays itself well and when the money runs out it will raise taxes or just print more money. In the US I expect the problem to continue until we reach the status of Greece and Spain where public sector expenses bankrupt the nation.

Trade Schools

“College is like a fountain of knowledge - and the students are there to drink”

A Washington Post story notes that More college-educated jump tracks to become skilled manual laborers.

"They started out studying aerospace engineering, creative writing and urban planning. But somewhere on the path to accumulating academic credentials, they decided that working with their hands sounded more pleasant -- and lucrative -- than a lot of white-collar work. So bye-bye to term papers and graduate theses, and hello to apprenticeships to become plumbers, electricians, auto mechanics
and carpenters."

The poor economy has been a boon for trade schools. The electricians' union program in Washington D.C. has 2,500 applications for 100 slots. And nearly 4,000 are competing for the 300 slots at a plumbers and pipe fitters school.

Pay for trade jobs is good. Apprentices start out at half salary with raises every six months. After five years licensed journeymen can expect to be paid $65,000 to $85,000 a year, depending on the amount of overtime. That beats four+ years of college, graduating deep in debt, and with no job.

In Europe many students begin an apprenticeship at age 18 right out of high school. But in the US, high school counselors rarely recommend trade school (except for their worst students). So American youth try college first and then switch to blue collar. The average age for beginning apprentices in the US is 25.

Bottom Line

This weekend my wife and I bumped into an old friend who is moving in the opposite direction - from blue collar to white collar. He was a long-time union employee at a TV station. However with better technology and greater automation, the station was able to layoff 38 technicians. Now my friend is completing a BS degree in Labor Relations and then plans to study law so he can go back and sue the pants off big companies.

There is merit in having some real-world experience before graduating from college.

More government? More spending?

“You have to learn the rules of the game. And then you have to play better than anyone else.”- Albert Einstein

Today I’ll jump from the heat of a volcano to the heat of politics. An editorial by Radley Balko at Reason.com describes the problem I fear today – “more government is better government”.

In the private sector failure leads to obsolescence (unless you happen to work for a portion of the private sector that politicians think should be preserved in spite of failure). When government fails, … the government claims it’s a sign that we need more government. It’s not that government did a poor job, or is a poor mechanism for addressing that particular problem, it’s that there just wasn’t enough government. Of course, the same people will point to what they call government success as, also, a good argument for more government.

It’s a nifty trick. The right does it with national security. The fact that we haven’t had a major terrorist attack since September 11, 2001 proves that the Bush administration’s heavy-handed, high-security approach to fighting terrorism worked! But if we had suffered another attack, the same people would have been arguing that we need to surrender more of our civil liberties to the security state. Two sides. Same coin."

When the Benard Madoff ponzi scheme collapsed, congressman said we need MORE regulation to prevent this from occurring again. But in reality several complaints had been made to the FEC that something fishy was going on. They ignored some of the complaints and when they did bother to investigate, the FEC found nothing wrong and decided to trust the claims made by Madoff.

Because the American Primary education system is so dysfunctional, teacher unions and politicians say we need to spend MORE money “for the children”. In 2008, 23% of students failed to graduate rate from high school. But according to a 2005 report from the OECD, the United States is tied for first place with Switzerland when it comes to annual spending per student on its public schools, with each country spending more than $11,000 (in U.S. currency) per student. Yet despite spending the most, U.S. public schools lag behind other developed countries in the areas of reading, math, and science. The Washington D.C. public school district spends $12,979 per student per year, third highest in the nation, but results rank lower than the national average.

For decades now, the US has been spending ever more on education with nothing to show for the extra expense. The “children” need better education, not a more costly one. As one blogger quipped, When congress discovers a successful way to run the schools in DC, THEN it can tell the rest of the nation what to to. But don’t export a losing system.

During the 2006–2007 school year, a private school in Chicago founded by Marva Collins charged $5,500 for tuition, and parents said that the school did a much better job than the Chicago public school system. At the same time Chicago public school officials claimed that a budget of $11,300 per student was not enough.

Imagine a car company that said, “We spend more than our competitors on making each and every car but we rank last in quality. So our solution is to hire more managers and to spend even more money on each car for the sake of our customers.” Such a company would go out of business (or would have except for recent government bailouts.)

Bottom Line

Don’t buy the line that government or public service needs to spend more money for your benefit. In New Jersey the new governor, Christie, is battling the Teacher Unions to control costs. He asked voters to reject any school plan where the teachers did NOT agree to a one-year wage freeze. In an historic election last week, many voters agreed with him and half the school budgets failed to pass. The governor is receiving death threats from teachers and commercials warn that he is endangering “the children”. Baloney!

A study by the Cato Institute in 1996 found that private schools provided superior education at $3,116, per child per year, half of then national average of $6,857. Free enterprise trumps government planning every time. With government, more is NOT better.