September 3, 2006
The Flush Are Working for the Public
By MARY WILLIAMS WALSH
FOR years it has been a workplace truism: jobs with fat paychecks are
found in the private sector, while jobs with ho-hum pay but rock-solid
benefits are found with the government. But research by the Employee
Benefit Research Institute suggests that the truism has not been true
for some time.
As of June 2005, overall compensation costs were 46 percent higher for
state and local governments than for private-sector employers,
according to the institute's research analyst, Ken McDonnell.
And when Mr. McDonnell separated the cost of providing current pay
from the cost of providing benefits, he found that government
employees were doing better on both counts. An hour's worth of their
work cost governments $24.17 in wages and salaries, plus $11.29 in
benefits. An hour's worth of work in the private sector cost employers
$17.21 for wages and salaries, plus $7.03 for benefits.
The $11.22-per-hour compensation gap reflects big differences in the
composition of America's work force. Roughly half of all state and
local workers are employed in education — teachers, university
professors and others who tend to be well educated and to belong to
unions. The cost of compensating workers in that group was $37.99 per
hour, Mr. McDonnell found.
By contrast, the biggest block of jobs in the private sector is in
services — a mixed bag that includes both lawyers and hotel
chambermaids, few of them in unions. Even at the high end, $27.93 per
hour, this group's total compensation cost fell short of what the
educators could command. At the low end, it was just $10.84 an hour.
(Of course, the services group includes about 47 million people and so
the relatively few mega-earners don't do much to raise the average.)