NCPA - National Center for Policy Analysis


February 1, 2008

State and local government workers are enjoying major gains in compensation, pushing the value of their average wages and benefits far ahead of private workers, a USA Today analysis of federal data shows.

  • The gap is widening every year, rising by an average $1.02 an hour last year and $2.45 an hour over the past three years; the better pay and benefits for public employees come as private-sector workers face stagnant wages and rising unemployment.
  • State and local government workers now earn an average of $39.50 per hour in total compensation, reports the Bureau of Labor Statistics (BLS); private workers earn an average of $26.09 an hour.

Benefits are a big reason for the gap.  Companies have trimmed pension benefits and asked employees to pay a greater share of medical costs.  Few governments have imposed similar cuts on teachers, snowplow drivers, lawyers and other civil servants.

  • From 2000 to 2007, public employees enjoyed a 16 percent increase in compensation after adjusting for inflation compared with 11 percent for private workers.
  • The nation has 20 million state and local government employees while about 116 million people work in the private sector; the 2.7 million federal workers are not included in the BLS compensation data.

Traditional pensions and medical coverage for retirees are among the benefits making it more lucrative to work in government, says Ken McDonnell, program director of the non-partisan Employee Benefit Research Institute of Washington, D.C.

Source: Dennis Cauchon, "Public jobs see pay gains," USA Today, February 1, 2008.

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