Overtime for state employees jumped 12% last year under a system that allowed dozens of employees to more than double their pay by routinely working long hours.
The state spent $80.9 million on overtime in 2018, or $8.7 million more than the $72.2 million it spent in 2017, according to a Milwaukee Journal Sentinel analysis of payroll data released under the state’s open records law.
More than three-fourths of the overtime—$63.6 million—was rung up at the Department of Corrections and Department of Health Services, which have struggled to keep employees at facilities that must be staffed around the clock.
That meant big paydays for employees willing to work long hours week in and week out, including a nurse who made nearly $217,000 last year.
In all, 40 state workers doubled or more than doubled their pay by working overtime. There were 418 state workers who made $25,000 or more in overtime last year.
Overtime costs for the state have been on a steady rise for years. Last year’s outlay was 64% higher than the $49.4 million the state spent a half-dozen years ago, in 2012.
Wisconsin and other states for years have had trouble hiring and retaining correctional officers and health-care workers amid a growing economy. The staffing shortage has forced Wisconsin officials to rely on overtime to cover essential shifts.
State workers receive their normal hourly wage for the first 40 hours they work in a week. In most cases, they receive one and a half times that pay rate for the hours they work beyond that.
Some employees in prisons and other state facilities are putting in twice as many hours as a typical American worker.
“Working that much overtime every single week is really quite unsafe—definitely not what I think any administration or any correctional facility would recommend,” said Jeff Mellow, a professor who specializes in correctional policies at John Jay College of Criminal Justice in New York.
Prison officials should put more limits on overtime to ensure workers are well rested enough that they can do their jobs properly, he said.
“Corrections is already a stressful environment, so you really do need to have your cognitive abilities,” he said. “And being fatigued, being sleep deprived, will definitely impact that.”
Daniel Meehan, a retired sergeant at Waupun Correctional Institution, blamed the worker shortage and rising overtime on Act 10, the 2011 law that all but eliminated collective bargaining for most public employees. Raising wages won’t fix the staffing problem on its own, he said.
“In corrections, the job is undesirable,” said Meehan, who worked for the Department of Corrections from 1981 to 2015. “Nobody wants to do it anymore. Nobody’s applying for the job, and the ones that do, quit.”
“You’re just a piece of meat,” he said. “Managers do whatever they want. There’s no repercussions for treating staff poorly.”
The worker receiving the most overtime last year was Sook Bae, a nurse at Central Wisconsin Center who earned nearly $217,000. Bae made more than $122,000 in overtime alone, allowing her to more than double her pay by working 80 hours a week on average.
The next highest overtime earner was Kevin Streekstra, a Dodge Correctional Institution sergeant who made more than $180,000 last year. Nearly $112,000 of his income came from overtime.
In third place was Karl Kronau, a State Patrol inspector who logged 76.6 hours of work a week on average in 2018. He made nearly $168,000 last year.
Some of Kronau’s long hours were spent protecting Paul Ryan, the speaker of the U.S. House from Janesville who did not run for re-election in November.
Five others made more than $75,000 each in overtime alone last year. They are Department of Health Services physician Loyda Loria and correctional officers Charles Ribbke, Christopher Ewerdt, Robert Lutzow and Todd Wetzel.
In total, last year Loria was paid more than $306,000 and each of the correctional officers made between $128,000 and $140,000.
Also among the top earners was State Patrol Sgt. Eric Dante, who serves on the governor’s security detail. Last year he earned nearly $143,000, including nearly $72,000 in overtime. That’s just a few thousand dollars less than the state pays the governor.
The data the Journal Sentinel analyzed included payroll information for 41,688 full-time, part-time and seasonal employees paid by the state in 2018. The data does not include employees of the Legislature, courts or the UW System.
Bae and Streekstra were also among the top five overtime earners in 2017, as well. Bae, Streekstra and the others mentioned in this article did not respond to requests for interviews.
State workers can boost their pensions by putting in long hours as they near retirement. Pensions are based on employees’ highest years of pay, and some employees work nonstop at the ends of their careers.
There is a personal cost to that approach. Some of those employees are working twice as much as normal, which colleagues say causes fatigue and strains relationships with friends and family.
While some prison employees opt to work long hours, many more are forced to work overtime with little notice. That adds stress to those workers and their families, Meehan said.
Jennifer Miller, a spokeswoman for the Department of Health Services, said state health-care facilities are required to adhere to set staff-to-patient ratios and have to fill shifts using overtime when they are understaffed. The labor market for health-care workers is tight, making it hard to fill jobs, she said.
Gov. Tony Evers said he believes he can reverse the overtime trend set by his predecessor, Scott Walker. By paying workers more, the state will be able to hire and keep more employees, allowing it to cut back on overtime, he said.
As it stands now, the state is “competing with McDonald’s” for workers at health-care facilities, Evers said.
“People who work can’t continue to be on top of their game if they’re doing overtime all the time,” he said. “I’m sure there are some people that like the additional pay, but I just think it’s an issue of being able to work effectively if you’re doing overtime.”
So far, the Evers administration has not made any changes to overtime policies at the health facilities, she said.
The Department of Corrections has offered $2,000 signing bonuses and other incentives at institutions with the most challenging staffing problems.
“The DOC and Governor Evers believe that paying our employees a competitive wage will increase their safety by reducing overtime, attract more employees who want to serve their communities, and help staff morale as a whole,” Department of Corrections spokeswoman Clare Hendricks said in a statement.
Starting pay for correctional officers is $16.65 an hour.
Hendricks said the agency does put some limits on how much an employee can work.
The worries that hung ominously over the U.S. economy early this year appear to have lifted. And that sunnier picture has helped bolster confidence in the stock market—driving the benchmark S&P 500 index to another record high Friday.
The latest dose of encouragement came in a report Friday that the U.S. economy grew much faster than expected in the January-March quarter, suggesting that the nearly decade-long expansion still has a ways to go.
Other recent signs have fed a growing view among many analysts that the economy faces little risk of slipping into a recession anytime soon as some had feared when the year began. Retail sales jumped in March. And with hiring solid and wages rising at a decent pace, consumer spending will likely strengthen in the coming months.
In Friday’s report, the government said the economy grew at a 3.2% annual rate in the first quarter. That’s much better than the 1% or below rate that was forecast in the early weeks of 2019.
Though the economy is widely expected to slow in the current quarter to a roughly 2% rate or less, such a pace would still produce annual growth for the first half of the year of roughly 2.5%. That would be a solid gain. And it would be in line with the modest but steady growth that has prevailed for most of the expansion.
It’s also a far brighter scenario than the one envisioned late last year and early this year. A 35-day partial shutdown of the government remained in effect through most of January. Global growth was sputtering in the midst of the U.S.-China trade war. Stocks plummeted in December as the Federal Reserve raised short-term interest rates for the eighth time in nine quarters and signaled that further tightening was likely. Mortgage rates rose, discouraging many would-be home buyers.
American households also cut back: Retailers’ sales were weak in January and February, adding to the bleak outlook.
Share prices, though, began to rebound in January after the Fed signaled that it had put any further rate increases on hold, likely for the rest of the year. That emboldened investors, who have become increasingly confident that the economy will avoid the worst-case scenario of a recession.
After falling nearly 20% at the end of last year, the S&P 500 has now recouped all its losses since late September. Though few Americans have substantial stock holdings, rising share prices can help boost consumer confidence.
Economists cautioned that first quarter growth was driven mostly by several factors that should reverse themselves in coming months. Retailers and other companies, for example, sharply increased the stockpiles of goods in their warehouses and on store shelves. Those additions added nearly 0.7 percentage point to the quarter’s growth figure. And the trade deficit narrowed sharply, adding an additional percentage point.
“We know this is not going to be sustainable,” said Joe Brusuelas, chief economist at RSM, a tax consulting firm.
Businesses won’t likely order as many new goods as they wait for consumer spending to reduce their stockpiles. That will probably restrain growth. And the improvement in the trade deficit last quarter occurred partly because imports fell sharply after many companies ramped up their buying from China last year in advance of potential tariff increases the Trump administration had scheduled for Jan. 1.
The White House ended up delaying those tariffs. As imports return to normal, the trade deficit will likely widen again.
Exports also rose in the January-March period, with China stepping up its purchases of U.S. goods, which some economists attributed to a temporary goodwill gesture by Beijing amid high-stakes trade talks between the two countries. Those negotiations are ongoing.
State and local government spending also rose last quarter, mostly to build more highways, which added 0.4 percentage point to growth and might also prove short-lived.
“Taking out the oversized boosts from net trade, inventories and highways investment, which will all be reversed in the coming quarters, growth was only around 1%,” said Paul Ashworth, an economist at Capital Economics. “Under those circumstances, we continue to expect that GDP growth will slow this year.”
Larry Kudlow, head of President Donald Trump’s National Economic Council, said the administration is sticking by its estimate that growth will top 3% for all of 2019. He argued that low unemployment and solid wage gains will lift consumer spending, thereby boosting auto and home sales.
“I think the prosperity cycle is intact,” Kudlow told CNBC. “I think the Trump policies are working to rebuild America.”
Whether the stock market can continue to march ahead—without additional evidence of corporate or economic strength—is far from clear.
“It’s important to note investors already knew the U.S. economy was the strongest in the world,” said Alec Young, managing director of global markets research at FTSE Russell.
Dyllon C. Baker
Derek Donald Kangas
Gas prices might continue inching up over the next few weeks, possibly rising about 15 cents a gallon by June, experts say.
The highest gas price in Janesville on Friday was $2.79 a gallon, and the lowest was $2.67 a gallon. Those prices could jump 5 to 15 cents over the next four weeks, said Patrick DeHaan, head of petroleum analysis at GasBuddy.com.
Seasonal refinery maintenance is expected to cause the spike, DeHaan said. As refineries prepare for the summer driving season by performing inspections and facility upgrades, gasoline supplies likely will be lower, he said.
Additionally, southeastern Wisconsin uses a different gasoline in the summer than the rest of the state, which also could contribute to the increase.
The region is required by the U.S. Environmental Protection Agency to use reformulated gasoline, a higher-quality fuel that helps mitigate smog and generally is more expensive.
DeHaan said northwestern Indiana and the Chicago suburbs also must use reformulated gas because they are part of a large population center.
Refineries and stations currently are in the midst of seasonal maintenance and are transitioning to the new gasoline. Stations are required to sell the reformulated gas by June 1, DeHaan said.
“It’s the transition to the summer gasoline that happens basically the same time refineries are doing maintenance that generally pushes prices up quite notably,” he said.
Oil prices also have been incrementally rising over the past several months. In December, West Texas Intermediate crude oil was selling for $43 a barrel. It currently is selling for $63 a barrel, DeHaan said.
Motorists could see some relief in June, he said.
Recent sanctions against Iran, imposed by the Trump administration, might push prices up slightly in the future, DeHaan said. The administration recently announced it would move to stop nations from buying Iranian oil.
Over time, Iranian sanctions could cause greater price spikes, but it’s not an immediate problem, he said.
Iran exports more than 1 million barrels of crude oil a day. Since the sanctions have recently been reinforced—and as the global market increasingly loses those barrels—the results will accumulate over time, DeHaan said.
U.S. allies such as Saudi Arabia and United Arab Emirates have promised to fill in the gap caused by the recent sanctions, DeHaan said. But those results have yet to be seen.
“The future is a little murky” on Iranian sanctions, he said.
For summer trips, DeHaan suggested travelers shop around for the lowest gas prices, especially if crossing state lines. Between Illinois and Missouri, he said, prices can fluctuate 30 to 50 cents a gallon because Illinois has a higher gas tax.