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April 4, 2011

Government pay gained over private sector in 2010

The Labor Department's newest figures on employer compensation costs came out last month, showing that pay for the average state and local government worker was 45 percent more than for the average private-sector worker. That's a slight increase in the 44 percent gap from 2009. The gap has stayed pretty steady, however, in the last decade.

The average private-sector worker made $19.64 per hour in wages or salary in December, while the average state and local government worker earned $26.42 per hour. (For some reason federal worker pay isn't surveyed.) The gap between benefits for private sector workers and those for state and government workers was larger: $13.86 an hour in benefits for the government workers vs. $8.11 for the private sector folks.

All told, the government workers made $40.28 an hour while the private sector workers made $27.75.

So the benefits for public sector workers were 71 percent higher than those for the private sector. Of course this is all fodder for the raging debate over public pensions. Many argue that government workers are more highly trained and have greater skills than those in the private sector. Len Lazarick at has a good summary of where things stand on pension legislation in Maryland.

Benefits for state and government workers

state and local government worker made $40.28 an hour but the benefits were $13.86;

Posted by Jay Hancock at 9:25 AM | | Comments (6)


I believe this is more of a reflection of the sharp downturn in private pay and benefits; govt. pay used to be lower not that long ago, and balanced the compensation package with security and good benefits. Govt. does adjust slower than private companies due to the regulated nature of any changes in govt. work. In my opinion, the scary part of this is not that the government is overpaid, but rather the middle class is eroding as private sector becomes underpaid, and we are in a race to the bottom. If the working folk of America keep losing their spending power at this rate, America is on its to way to becoming a has-been economic power.

The "race to the bottom" argument might be compelling if it weren't for the fact that the standard of living of the average worker has been increasing over time.

Sure, dollars are worth less these days than they once were, but prices are also lower on lots of items that were considered luxuries before. Just walk around Best Buy to see what I mean.

This is very misleading. Is 'private' sector counting all of the minimum wage retail jobs that make up about 1/3 of the economy? The government has no such job, it's all white or blue collar work. If the private sector jobs were only looking at white and blue collar also and left out all of the retail level jobs, I'd be curious to see how close the two numbers come to each other.

Hourly wages aren't comparable because there arent any burger flippers in the government. If you compare within any educational attainment category (for example, people with masters degrees in chemistry, say) the studies say that the federal workers make slightly less than their private sector counterparts.

I agree with BB. In addition there are large numbers of part time workers in the private sector who typically don't qualify for company benefits but not a lot of part-time government jobs. This probably affects the benefit compensation figures.

The calculation, near as I could tell from the BLS source document, is just total dollars paid divided by total hours worked. Not a whole lot of analysis.

Amazing comments. Please read again that this number of 44% difference has remained steady over a decade. This is not a race to the bottom, instead it's a pyramid scheme of the government employees on top. And once the entire tax system fails because of a recession, well we have massive deficits that we ignore. Maybe we have a $1.65 trillion deficit and we spend too much on government salaries and benefits. Maybe we should do something about it.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.

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