Right-wing Alaska group claims state could save $1.3 billion on workforce. Don't believe it.

The column posted by the Anchorage Daily News by Robert Griffin makes the case that state employees are lazy, overpaid and a lot of their jobs should be eliminated.

Griffin is a board member of the Alaska Policy Forum, a right-wing group that got started with support from a group backed by the Koch Brothers network. The Donors Capital Fund provided $192,000 in 2009-2010.

The Alaska Policy Forum claims on its website that “right-sized government” in Alaska means cutting state wages and the number of employees to reduce spending by $1.3 billion or $1.7 billion. Don’t believe it.

As evidence, the group offers a recycled document that has been peddled for more than a decade, with slight revisions, to residents of Oklahoma, New Mexico, Maine, Illinois and other states as a cure-all.

Oklahoma taxpayers have no direct way to judge whether or not they are getting a good ‘bang for the buck’ for the goods and services provided by the public sector,” J. Scott Moody wrote in 2008.

To no one’s surprise, he wrote in 2017 that, “Alaskan residents have no direct way to judge whether or not they are getting a good ‘bang for the buck’ for the goods and services provided by the public sector.”

In just about every state where this retread appears, Moody ends with this advice: “Policymakers must pursue pro-growth economic policies—such as lower regulations, lower taxes, and secure property rights—that will promote economic development by allowing private sector businesses to better compensate and hire additional employees. Such policies are a win-win for both the private and public sectors.”

In the ADN column, Griffin claims that according to the Alaska edition of Moody’s paper, the “average Alaska government employee was compensated $105,759 in 2016. A worker in the private sector doing the same kind of work was compensated $68,152.”

But even Moody’s recycled paper doesn’t make that claim. Moody made no attempt to compare workers ”doing the same kind of work.” It would be hard to do that.

About Alaska, Moody wrote, “In 2016, state government compensation was $105,759 per job while private sector compensation was $68,152 per job. In other words, the average state government job paid 55 percent higher than the average private sector job—hereafter referred to as the “compensation ratio”—and is the highest ratio in the country.”

Moody, who writes that he has a master’s degree from George Mason University, picks a few federal and state statistics from a small set of tables and claims to have discovered the truth about government excesses in any state you choose to name. He lives in New Hampshire, according to his Twitter account.

All of his papers comparing private and state wages feature the same slipshod analysis.

From his writing, there is no clue that he has ever set foot in Alaska or even flown over the state. It is worrisome that he is held up as a sage by the Alaska Policy Forum, a group closely aligned with Gov. Mike Dunleavy.

Moody says Alaska could cut its spending to the national average in every category and save up to $99 million on administration, $86 million on courts, $111 million on jails, $35 million on police, $82 million on welfare, $141 million on natural resources, $196 million on roads, $26 million on health, $80 million on higher education, $9 million on “other education,” $62 million on financial administration and $3 million on parks and rec.

His finest discovery, for which he deserves the Nobel Prize, is that Alaska can save $169 million on “other and unallocable” expenses.

I forwarded my criticism of Moody’s recycling effort to Gunnar Knapp, who is an authority on the Alaska economy and state spending, and asked for his analysis.

Knapp, who is retired from the University of Alaska Anchorage and the Institute of Social and Economic Research, replied in detail:

Mr. Griffin’s column in the ADN, and the article which he cites (“Right-Sizing Alaska’s State Government Workforce,” by J. Scott Moody), grossly simplify the issues related to what might be an appropriate size and level of compensation for state government employees.

The article compares the ratio of average compensation in state government with average compensation in private sector jobs. This is absurd. It only makes sense to compare compensation in similar types of jobs. Suppose two states had identical levels of state government compensation, but one had a lot of high-paying private sector jobs (say in high-tech industries) and another had a lot of low-paying private sector jobs (say in fish processing). The higher-paid the private sector jobs, the less “overpaid” the public sector will appear, even if the compensation is the same.

The paper, of course, takes no note of the many contributing factors to why, in comparison with other states, state government employment in Alaska is a higher share of total employment and why average state government compensation is higher.

These include, for example, higher costs of living, the various things that Alaska government does that other state governments don’t do (such as operating airports across the state and managing vastly higher land acreages and fish resources per capita), the greatly higher costs of medical care, and so on.

The study and the ADN op-ed piece totally ignored the detailed study done in 2017 by Mouhcine Guettabi and Andrew Bibler of ISER on “Public and Private Sector Earnings in Alaska.” That study showed that the question of whether public or private sectors earn more is complex, and varies depending upon occupation, sex, and years working. It does not show anything like the dramatic gross difference suggested by Mr. Griffin.

I can’t help but notice that the author of the article cited by Mr. Griffin doesn’t appear to have any direct Alaska experience or understanding. (J. Scott Moody, M.A., George Mason University, is a Founding Partner at Key Policy Data, www.keypolicydata.com, and Director of the Family Prosperity Initiative, www.familyprosperity.org.)

Why should Alaskans pay more attention to simplistic comparisons by someone at George Mason University than careful studies by professors at their own university? And why should anyone pay any attention to an op-ed writer who doesn’t give any indication of having read the ISER study and tried to at least review the available evidence on this complicated subject?

Dermot Cole8 Comments