NCPA - National Center for Policy Analysis

California Leads U.S. Pay Giveaway

January 3, 2013

California faces a $26 billion budget deficit, yet it gives government workers more money in wages and benefits than any other state in the United States in almost all job categories, says Bloomberg.

  • One state psychiatrist received $822,000, whereas the top earner for the same position in a state like New Jersey is $327,000.
  • Similarly, a highway patrol officer received $484,000 in pay and compensation benefits.

Another growing problem is the compensation workers receive for working long hours and accumulated vacation pay when employees leave public sector.

  • One doctor was paid for an average of almost 17 hours each day, including on-call time and weekends.
  • Furthermore, $964 million was paid in overtime to 110,000 workers -- twice the $415 million New York paid in overtime to 80,000 staff members.
  • Seventeen employees got checks of more than $200,000 for unused vacation and leave.
  • One psychiatrist who retired last year received $608,821 in unused vacation.

The generous pay and benefits that government workers receive result from several factors. First, starting with Governor Gray Davis in 1999, each successive government has steadily increased wages and benefits for their workers while promising further pension benefits. Second, union workers organized to make political gains in the state to secure their interests and lobby for more wage increases and benefits.

  • California's annual payment toward pension obligations ballooned to $3.7 billion from the $300 million when the bill was enacted.
  • Unions also pushed for the California Public Employees' Retirement System to support legislation that would increase state and local pensions.
  • For example, highway patrol officers were granted the right to retire after 30 years of service with 90 percent of their top salary.

To help curb the unsustainable rise in wages and benefits for government workers, former Governor Schwarzenegger tried to lower wages. He also ended up imposing furloughs, a mandatory unpaid day off each month. However, this resulted in depressed regular wages and increased overtime compensation.

As the budget deficit continues to grow, public employee unions have begun to loosen up and make concessions such as contributing 5 percent more of their earnings toward pensions and forgoing overtime pay for some holidays.

Source: "$822,000 Worker Shows California Leads U.S. Pay Giveaway," Bloomberg, December 10, 2012.


Browse more articles on Tax and Spending Issues