The recession and the ongoing jobless recovery devastated much of the private-sector work force last year, sending unemployment soaring, but government workers emerged essentially unscathed, according to data released Wednesday by the Labor Department.
Meanwhile, the compensation for state and local government employees continued to easily outdistance the wages and benefits for workers in private business, a separate Labor Department report showed.
Private-industry employers spent an average of $27.42 per hour worked for total employee compensation in December, while total compensation costs for state and local government workers averaged $39.60 per hour.
The average government wage and salary per hour of $26.11 was 35 percent higher than the average wage and salary of $19.41 per hour in the private sector. But the percentage difference in benefits was much higher. Benefits for state and local workers averaged $13.49 per hour, nearly 70 percent higher than the $8 per hour in benefits paid by private businesses.
Paul Booth, executive assistant to the president at the American Federation of State, County and Municipal Employees (AFSCME), attributed the pay difference to a changing government work force that has increased its proportion of higher-skilled workers during the past 15 to 20 years.
“In government payrolls, you no longer have low-wage occupations, such as janitors, whose jobs have been contracted out to the private sector,” he said. This trend has effectively increased the average wage of those higher-skilled workers who remain, said Mr. Booth, whose union represents 1.6 million workers.
Small-government advocates see it differently.
Compensation for government workers “is a gigantic problem” that will only get worse in future years, said Chris Edwards, director of tax policy studies at the Cato Institute, which advocates less government and lower taxes.
“The defined-benefit pension plans for state and local workers and their post-retirement health care costs do not include the extent to which those benefits are underfunded or overpromised,” Mr. Edwards said.
The cost of today’s benefits for government employees ($13.49 per hour) assumes that these retirement benefits are fully funded. However, Mr. Edwards estimated that the benefits are underfunded by $3 trillion.
Benefit costs eventually will soar, and taxpayers will be required to pay the difference between available resources and the overpromised benefits as government workers of the baby boom generation, who start to turn 65 next year, begin to retire en masse. Government workers also have the rare privilege of being able to retire at age 55.
With state budgets under extreme stress, the pension problem is worsening because workers are accruing future benefits that are not reflected in current data, Mr. Edwards said.
Meanwhile, private-sector workers who are unemployed or working part time are not paying as much in taxes.
Fifteen states and the District of Columbia reported double-digit unemployment during January, the Labor Department said Wednesday, as the private sector continued to shed jobs.View Entire Story
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