Report: State and local government employees making more than private

Michael P. Tremoglie Sep. 17, 2012, 1:00pm


WASHINGTON (Legal Newsline) - The Department of Labor's Bureau of Labor Statistics issued a report Tuesday titled "Employer Costs for Employee Compensation - June 2012."

The quarterly BLS report compares the costs private employers spent on employee compensation with that of state and local government employees.

For the quarter ending June 2012, government employees received more in salary and benefits than their private-sector counterparts.

According to the report, private industry spent an average of $28.80 per hour worked for employee compensation in June 2012. The combined wages and salaries accounted for 70.4 percent of these costs - an average of $20.27/hour. Benefits averaged $8.52.

Private industry employer costs for legally required benefits (Social Security, Medicare, unemployment insurance, and workers' compensation) averaged $2.37 per hour worked (8.2 percent of total compensation), insurance benefits (life, health, and disability insurance) averaged $2.34 (8.1 percent), paid leave (vacation, holiday, sick leave, and personal leave) averaged $1.97 (6.8 percent), and supplemental pay (overtime and premium, shift differentials and nonproduction bonuses) averaged 82 cents (2.9 percent).

But the total compensation costs for state and local government workers averaged $41.10/hour. Federal employees were not included in this report. According to the BLS, the federal employees' costs are maintained by the Office of Management and Budget.

Retirement and savings benefit costs were higher, the BLS said, both in amount and as a proportion of total compensation, for union workers ($2.89 and 7.4 percent of total compensation) than for nonunion workers (83 cents and 3.0 percent of total compensation). Defined benefit plan costs were significantly higher for union workers ($2.11 and 5.4 percent of total compensation) than for nonunion workers (26 cents and 0.9 percent of total compensation). Defined contribution costs for union workers were higher (78 cents) compared to nonunion workers (57 cents).

"There's no doubt that unionism raises the cost of labor, both in the public and private sectors. Those extra costs get passed on to consumers in the private sector as higher costs and fewer jobs; in the public sector, the high cost of unionized labor can lead to higher taxes and/or reduced government services," said Matt Patterson, Senior Fellow at the Competitive Enterprise Institute's Center for Economic Freedom.

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