Wage penalty in the public sector

With the recession, state and local government budgets have been buffeted by lower tax revenues and higher demand for social services. In a paper from the Center for Economic and Policy Research (CEPR), economist John Schmitt responds to arguments that "excessive pay for public employees is the real cause of the financial woes."

Schmitt found three important differences between state-local and private workforces:

1. State and local employees are substantially better educated than workers in the private sector--over half of state and local employees have a four-year college degree or more, compared to about 30 percent in the private sector.
2. State and local employees are about four years older than private-sector workers.
3. Sixty percent of state and local workers are women compared to less than half of private sector worker.

When the two sectors are compared, especially when matched by age and education, public workers earn 4 percent less on average.

According to 50-state charts in the report measuring state and local public employees, ages 18-64 in 2009, Hawaii has 70,742 such employees (55,725 state and 14,747 local) comprising 13.8 percent of all employees.


The Wage Penalty for State and Local Government Employees (pdf, 20pp/257kB), May 2010
      Press Release, May 12, 2010

Related Issue Brief: The Benefits of State and Local Government Employees (pdf, 2pp/78kB), May 2010

Safer SAFER

The Congressional Research Service (CRS) reported on the Staffing for Adequate Fire and Emergency Response (SAFER) Act that was enacted in 2003 in response to concerns about the adequacy of firefighter staffing. SAFER is administered by FEMA and is up for reauthorization.

The SAFER Act authorizes grants to career, volunteer, and combination local fire departments for the purpose of increasing the number of firefighters to help communities meet industry-minimum standards and attain 24-hour staffing to provide adequate protection from fire and fire-related hazards. Also authorized are grants to volunteer fire departments for activities related to the recruitment and retention of volunteers.

With the economic downturn and local fire departments' budgetary problems, Congress is considering easing restrictions to enable more participation in the program.

Hawaii received its first SAFER grant of $1.6 million in FY2008.


Staffing for Adequate Fire and Emergency Response: The SAFER Grant Program, RL33375 (pdf, 13pp/176kB), from Open CRS, April 30, 2010

Reimbursements to nonprofits

The Government Accountability Office (GAO) published a report on how nonprofits are reimbursed by federal, state, and local governments for indirect costs. Recognizing that nonprofits are "key partners in delivering federal services yet reportedly often struggle to cover their indirect costs," GAO reviewed six grants from the Depts. of Health and Human Services (HHS) and Housing and Urban Development (HUD) and 17 nonprofits in Louisiana, Maryland, and Wisconsin, which receive at least one of the six grants, for this study. GAO discussed the following:

• Inconsistencies in terminology lead to challenges in cost classification, which can result in uneven treatment of costs
• Nonprofits’ reimbursement for indirect costs largely depends on federal, state, and local government practices
• When nonprofits report differences between indirect costs incurred and reimbursed, they take a variety of steps to bridge gaps

NONPROFIT SECTOR: Treatment and Reimbursement of Indirect Costs Vary among Grants, and Depend Significantly on Federal, State, and Local Government Practices, GAO-10-477 (pdf, 32pp/298kB), May 18, 2010

2010 grads & jobs

"For the class of 2010, it will be one of the worst years to graduate high school or college since at least 1983 and possibly the worst since the end of World War II," according to a recent paper from the Economic Policy Institute (EPI).

Its main findings:

• The class of 2010 will be entering a labor market with the highest rates of unemployment in at least a generation; unemployment rates for both college graduates and non-graduates younger than 25 are nearly double their pre-recession levels.
• Since the start of the recession, the youth labor force (workers age 16 to 24) has contracted by 1.1 million workers.
• Since the start of the recession, an additional 1.2 million 16-24-year-olds have become disconnected from both formal schooling and work.
• Most young adults that come across hard economic times will fall through the large gaps in the public safety net.
• Contrary to arguments that higher federal budget deficits burden future generations, rising public debt that finances efforts to boost economic recovery will minimize the deep economic scarring caused by the recession and increase future earnings for young workers.

THE CLASS OF 2010, Economic Prospects for Young Adults in the Recession (pdf, 14pp/256kB), May 11, 2010

Metro stats

Considered "a signature effort" of the Brookings Metropolitan Policy Program, the State of Metropolitan America reports on demographic and social trends in large metropolitan areas, together with implications for public policy for these areas and their populations to thrive.

Chapters: 1. Population and Migration, 2. Race and Ethnicity, 3. Immigration, 4. Age, 5. Households and Families, 6. Educational Attainment, 7. Work, 8. Income and Poverty, and 9. Commuting. These nine chapters correspond to "the most important subjects tracked by the Census Bureau in its annual American Community Survey (ACS)."

The report notes five "new realities":

• Growth and outward expansion
• Population diversification
• Aging of the population
• Uneven higher educational attainment
• Income polarization

And large metropolitan areas—the collections of cities, suburbs, and rural areas that house two-thirds of America’s population—lay squarely on the front lines of those trends.

The State of Metropolitan America, May 9, 2010
      Full Report, Part One (pp 1-75) (pdf, 77pp/7.57MB)
      Full Report, Part Two (pp 76-168) (pdf, 95pp/15.6MB)
      Executive Summary (pdf, 4pp/1.65MB)

Health coverage in the recession

In a report released today, the Employee Benefit Research Institute (EBRI) examines changes in employment-based health coverage during the recession that began in Dec. 2007. It uses data from the Survey of Income and Program Participation (SIPP), up to July 2009, with emphasis on changes that occurred between Sept. 2007 and April 2009. The findings include the following:

• Between Dec. 2007 and July 2009, the percentaqe of workers with coverage fell from 60.4% to 55.9%.
• The uninsured rate rose from 12.3% in May 2007 to 16.4% in July 2009.
• Deductibles and copayments for office visits and prescription drugs have been increasing.
• Demographically, those most likely to lose coverage were younger vs. older workers, Hispanic vs. white or black workers, and part-time vs. full-time workers.

The Impact of the Recession on Employment-Based Health Coverage, May 2010
      Issue Brief (pdf, 24pp/1.5MB)
      Executive Summary
      Press release, May 4, 2010