On April 28, 2010, the Center for State and Local Government Excellence (SLGE) and the National Institute on Retirement Security (NIRS) released their report: Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years. The report was co-authored by two economists from the University of Wisconsin-Milwaukee, Keith Bender and John Heywood.  Based on their analysis of data from the U.S. Bureau of Labor Statistics, the authors conclude that public-sector employees earn less than private-sector employees when earnings are adjusted for their level of education, training, experience, and other known determinants of earnings.

Key findings of the study include:

  • Public-sector positions are typically different from private-sector positions and usually require more education, training, and experience.  Moreover, some positions (such as firefighters and police officers) are unique to the public sector.
  • When adjusted for known earnings determinants, the wages and salaries of public employees are typically lower than those in the private sector.  As adjusted, the wages and salaries of state employees are estimated to be 11% lower than for private-sector employees.  Wages and salaries of local government employees are 12% lower.
  • Employee benefits comprise a slightly greater share of compensation in the public sector than in the private sector.  However, even after accounting for benefits such as retirement and health care, total compensation for public-sector employees is less than for comparable private-sector employees.  On average, total compensation is 6.8% lower for state employees and 7.4% lower for local government employees relative to private-sector employees.

The full report is available at:
http://www.nirsonline.org/storage/nirs/documents/final_out_of_balance_report_april_2010.pdf  

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