2012 Edition: What’s your raise this year?

[ocrenter]

[quote=sdrealtor]But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.[/quote]

ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.

[an]

I won’t know til 12/31/12, but if it’s anything like last year, I expect to see 3.5-4% raise, 15-20% cash bonus, and 15-20% equity bonus vested over 3 years.

[Anonymous]

[quote=ocrenter]ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

Getting raises when everybody else is not?

Doesn’t sound like much of a downfall.

[SK in CV]

[quote=Rich Toscano]The cost of living goes up every year (even in calendar years 2008 and 2009 the cost of living went up). So if you didn’t get a raise in a given year, your compensation has actually declined.[/quote]

Not exactly. If your pay stays the same, then your pay stays the same. The purchasing power of that compensation goes down. That’s not necessarily the same as a cut in pay.

The thing is, if an employer doesn’t raise prices (or in the case of industries like tech consulting, where rates actually have fallen), then there has been no inflation in value. Should employers in industries similarly situated be obligated to give cost of living raises? Ultimately, market conditions rule. I’m just not convinced there’s any logic to automatic raises, just because another year has passed.

[ocrenter]

[quote=pri_dk][quote=ocrenter]ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

Getting raises when everybody else is not?

Doesn’t sound like much of a downfall.[/quote]

downfall as in it being the ultimate reason why the public sector tend to fail the public it serves. not downfall for the pulbic sector employees.

[Hobie]

I think the thinking behind annual raises is to retain employees. Cheaper to pay this than to find/train/retain new hires.

That said, I am a firm believer in pay based on value returned to the employer, which is always a variable, thus a negotiable. Even with commissions, the structure is a moving target.

Now if you want to get into an argument with a public sector person, mention a performance base pay scale or a voucher system for educators. Smile.

[Rich Toscano]

[quote=SK in CV][quote=Rich Toscano]The cost of living goes up every year (even in calendar years 2008 and 2009 the cost of living went up). So if you didn’t get a raise in a given year, your compensation has actually declined.[/quote]

Not exactly. If your pay stays the same, then your pay stays the same. The purchasing power of that compensation goes down. That’s not necessarily the same as a cut in pay. [/quote]

I strongly disagree.

You are trading your labor for the ability to buy stuff. Or specifically, an hour of labor allows you to buy a certain amount of stuff. Dollars are just a medium of exchange in this transaction. If you do the same amount of work, but are compensated with the ability to buy less stuff, then your compensation has declined. The fact that you got the same amount of (now less valuable) dollars doesn’t change that fact.

For the record, I am not arguing that anyone should get automated pay increases. I’m just pointing out the fact that if your nominal pay did not increase in a given year, your real compensation actually dropped.

[Anonymous]

Is this an argument about semantics?

😉

[SK in CV]

[quote=pri_dk]Is this an argument about semantics?

;-)[/quote]

Pedantically speaking…..yes. And I resign 🙂

[kev374]

[quote=dumbrenter]I pay IT consultants for their services and always thought their rates are too high for what they do. The worst are the IT service companies.[/quote]

What exactly do you mean by “What they do”, IT is a HUGE field, some professionals are worth their weight in gold, others not so much and are indeed overpaid but that can be said for any field. Why do lawyers charge $200/hr to file paperwork? Why do real estate agents make 3-6% per deal, which amounts to tens of thousands, for work that *I* personally think is ridiculously easy. Is driving guests to a house and blabbering about it’s features worth a $15,000 commission? Exactly!

Secondly, IF you think their rates are too high then why aren’t you getting cheaper folks? It’s the open market right? You are not paying these “too high” rates because of your generosity correct?

There is an old adage…you get what you pay for 😉 I know some ignorant people in management think that Software Engineers are nothing but glorified typists and these are the folks that waste millions trying to cut costs by sourcing underqualified and cheap resources resulting in wasted efforts… bottom line, there is NO free lunch! Many learn this the hard way!

[CA renter]

[quote=ocrenter][quote=sdrealtor]But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.[/quote]

ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

I’m pretty familiar with a number of public employers and their compensation numbers. Of the ones I’m familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.

[CA renter]

[quote=CA renter][quote=ocrenter][quote=sdrealtor]But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.[/quote]

ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

I’m pretty familiar with a number of public employers and their compensation numbers. Of the ones I’m familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.[/quote]

To your point about merit-based pay, though public employees are paid on the same scale, those who work more hours, have more training, education, etc. tend to get paid more.

It depends on the particular employer and type of position, but the best employees are usually paid the most because they are also the ones who tend to get promoted. There is less nepotism/favoritism in public employment, so the ones who get promoted (not including political offices) are usually the the best employees, and are paid more as a result.

[ucodegen]

[quote Rich Toscano]I’m just pointing out the fact that if your nominal pay did not increase in a given year, your real compensation actually dropped.[/quote]
Provided that there was inflation during that year. If there was deflation, then their compensation increased – the dollar bought more.

[ocrenter]

[quote=CA renter][quote=ocrenter][quote=sdrealtor]But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.[/quote]

ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

I’m pretty familiar with a number of public employers and their compensation numbers. Of the ones I’m familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.[/quote]

But that’s looking at a short term deviation from the norm secondary to budgetary crisis at all levels of government. Overall, the government employees are significantly overpaid.

http://www.bls.gov/news.release/pdf/ecec.pdf

[CA renter]

[quote=ocrenter][quote=CA renter][quote=ocrenter][quote=sdrealtor]But if you perform below average you should fall behind. Its the private sectors way of showing you where the door is without getting sued.[/quote]

ultimately that’s the downfall of the public sector. the pay increases are all set in stone, regardless of performance.[/quote]

I’m pretty familiar with a number of public employers and their compensation numbers. Of the ones I’m familiar with, almost all have had their compensation frozen or seen net decreases in total compensation since about 2008. No net raises in the vast majority of cases. Their compensation has gone down in real terms, and in many cases, in nominal terms.[/quote]

But that’s looking at a short term deviation from the norm secondary to budgetary crisis at all levels of government. Overall, the government employees are significantly overpaid.

http://www.bls.gov/news.release/pdf/ecec.pdf%5B/quote%5D

Where does it say that?

From your link, on page 4:

“Comparing private and public sector data
Compensation cost levels in state and local government should not be directly compared with levels in
private industry. Differences between these sectors stem from factors such as variation in work
activities and occupational structures. Manufacturing and sales, for example, make up a large part of
private industry work activities but are rare in state and local government. Professional and
administrative support occupations (including teachers) account for two-thirds of the state and local
government workforce, compared with one-half of private industry.”
——————

Here are some articles and studies regarding compensation in the public vs. private sectors:

http://abcnews.go.com/blogs/politics/2011/02/working-in-america-public-vs-private-sector/

And this more “mixed” analysis from the Reason Foundation — hardly a “liberal” or “pro-union” organization:

http://reason.org/news/show/public-sector-private-sector-salary

And from Mother Jones (to get all sides in here), another “mixed” bag:

Chart of the Day: Federal Government Pay vs. Private Sector Pay

——————

One comment I have to make about the higher pay for the jobs with fewer degree requirements — many of which are public safety jobs — there are no similar jobs in the private sector with which to compare them.

Not only that, but they mention the much lower turnover rate in many public sectors jobs; this is very important to public employers. The (necessarily) bureaucratic hiring process and extensive initial, and ongoing, training required for these employees is VERY expensive. They cannot afford to have high turnover rates. IMHO, even if they were to go to defined contribution plans (as many suggest), I don’t think they’d end up saving very much (anything?) in the long run. One of the main reasons people are attracted to these jobs is the benefits packages. Take that away, and the turnover rates — and related costs — would be much, much higher.

[Author]

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