At Work

Still think public employees are underpaid? Think againšŸ¤”

According to a Bureau of Labor press release on June 28, 2019:

Employer costs for employee compensation for civilian workers averaged $36.77 per hour worked in March 2019, the U.S. Bureau of Labor Statistics reported today. Wages and salaries cost employers $25.22 while benefit costs were $11.55.

Total compensation costs for civilian workers were $12.71 at the 10th wage percentile, $27.87 at the 50th (median) wage percentile, and $72.62 at the 90th wage percentile.

State and local government worker compensation costs for employers averaged $50.89 per hour worked in March 2019. Wages and salaries averaged $31.75 and accounted for 62.4 percent of employer costs, while benefit costs averaged $19.14 and accounted for 37.6 percent. Total compensation costs at the 50th (median) wage percentile were $47.99.

Total employer compensation costs for private industry workers averaged $34.49 per hour worked ($25.21 at the 50th or median wage percentile). Wages and salaries averaged $24.17 per hour worked and accounted for 70.1 percent of employer costs. Benefit costs averaged $10.33 per hour worked and accounted for the remaining 29.9 percent. Median employer costs per employee hour worked were $17.64 for wages and salaries and $7.57 for benefits.

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5 replies »

  1. Generally speaking, I like statistics. But too often their use conceals more than reveals. The most prominent example is the one that states “women make 72 cents for every dollar a man makes.”

    Regarding the current issue of wages in state and local governments vs. wages in the private sector: there is no discussion (as in the women vs. men issue) of what type of jobs are being discussed.

    Where do state and local governments spend the most amount in labor costs? Education and public safety. Teachers, police officers and fire fighters. Not many burger flippers or Old Navy shelf stockers.

    There are legitimate concerns with total compensation for teachers , fire fighters and police. But let’s address those head on. That’s where the money is. Generic comparisons of public vs. private conceals more than it revels.

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    • I agree but the burger flippers most likely have no pensions or medical so I would expect the divide to be greater. A burger flipper compensation will be closer to their hourly wage for the lack of benefits. Therefore it still stands that public employees are paid more. But I would like to see job title vs job title comparison. There are private teachers and private firefighters, in fact contract, federal firefighters and EMTs as wells line cooks and clerical staff. But I do expect the same result.

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  2. What I think is that the average worker doesn’t know what true cost of their own benefits costs. They just know their own hourly wage, not what their employer pays in taxes on their behalf or company matches for 401K, pensions, medical, etc.

    For the workers without medical or pension benefits, they do not know the true value of what they are missing either, unless they try to get medical insurance on their own.

    The big difference with public pensions and retirement benefits is that they often come with a COLA that the private sector doesn’t get. And how do you put a future value on medical plans in addition to Medicare for retirees 10 or 20 years from now?

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    • The government state and federal pension systems are going to break the bank. By adding trillions to the government debt bomb that is coming over the next 20 to 30 years.

      I retired from the USAF in 1995 after 20 years of service, as an E-7 Master Sergeant and my monthly benefit was $1,065 per month 50% of my base pay of $2,130 and with COLAs it has increased to $1,777, $21,324 for a total benefit of $420,425 at the end of 2019. If I live to 85 Life Expectancy calculator estimate, another 21 years, I am sure my total military retirement benefit will be over $1,000,000.

      The math gets worse for the government debt bomb for current active duty military. Since COLAs for active duty is added to 100% of base pay each year, in the last 25 years E-7 Master Sergeant pay has more than doubled and is now $4,797 per month. So, an E-7 Master Sergeant retiring today because of averaging the last 36 months of base pay will receive $2,342 per month for 20 years of service, . $565 more per month than current retirees with the same years of service, who retired in 1995. Each year new retirees get a little more than retirees who left the service the year before them.

      So a Master Sergeant retiring today will receive $28,104 per year, using the same COLAs I received their benefit for the first 25 years will grow to $48,300 per year. Total benefits in 25 years equal $906,468 and well over $2,000,000 by age 85.

      This math is being repeated at state and federal levels, many workers getting thousands of dollars more per year than my example.

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