By M.D. Kittle | Wisconsin Reporter
MADISON – While labor unions grouse about public sector pay, a state government job is a good gig if you can get it, according to the latest income data from the U.S. Bureau of Labor Statistics.
In Wisconsin, state employees earned on average $53,552 in 2012, nearly $12,000 more than their fellow workers in the private sector, based on BLS data tracked by Stateline, the news service of The Pew Charitable Trusts.
The salary data was drawn from BLS’ Quarterly Census of Employment & Wages, through the fourth quarter of 2012.
While Wisconsin state employees are coming off a two-year pay freeze, on average their wages have risen about 5 percent since 2010, when the average salary was $50,977, according to the data.
Private sector wages have risen at about the same rate, from an average of $39,556 in 2010 to $41,764 last year.
“(T)he newly released 2012 data provide an interesting glimpse at how salaries for both public and private sector workers are recovering from the recession,” wrote Melissa Maynard, staff writer for Pew’s Stateline.
Nationally, the trend lines show two sectors walloped by the Great Recession, with private sector salaries flat-lining between 2008 and 2009, then on the upswing ever since. State employees saw their income level out in 2009 and 2010, followed by a gradual rise in 2011 and ’12.
BLS numbers crunchers say it’s difficult to compare private and public sector salaries, that they are often apples to oranges comparisons. For one thing, as Pew notes in its infographic, the average state employee is better educated than the average private sector worker, and the majority of government jobs require professional-level skills, demanding higher pay.
The Congressional Budget Office notes, “Federal workers tend to be older, more educated, and more concentrated in professional occupations than private-sector workers.”
“Overall the private sector wage should be lower because it includes the lower paid end of the economy, jobs not typically included in the public sector,” BLS economist Paul LaPorte told Wisconsin Reporter.
But Andrew Biggs, who has made a study of comparing public and private sector wages, says the comparisons are more apples to apples than government workers care to believe.
“Many public employees honestly believe that they could earn much more in the private sector. As it happens, though, few actually do,” Biggs, resident scholar at the American Enterprise Institute, a free-market think tank, and Jason Richwine, of the conservative Heritage Foundation, wrote in a Wall Street Journal column on wages.
With federal, state and local governments paying out almost $1.5 trillion in employee compensation in 2012, the pay scale isn’t a trivial fact, Biggs and Richwine wrote.
The U.S. Census’ Survey of Income and Program Participation found the average federal worker shifting to a private sector job accepts a small salary reduction, about 3 percent. On the other side, private sector workers who move into federal jobs on average received a 9 percent pay hike in their first year on the job, “well above the raise other workers get when they switch jobs within the private sector,” Biggs and Richwine noted.
While the BLS wage data includes bonuses, stock options and vacation pay, it doesn’t factor in a big eventual income source in the public sector: The employee pension. Defined benefit plans are the domain of the public sector, and they can mean a lot of income down the road for the public employee.
The Congressional Budget Office, in a wage comparison of private sector and federal employees in similar occupations and with similar experience, found:
- Federal civilian workers with no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector.
- Workers whose highest level of education was a bachelor’s degree earned roughly the same hourly wages, on average, in both the federal government and the private sector.
- Federal workers with a professional degree or doctorate earned about 23 percent less, on average, than their private-sector counterparts.
Now factor in employee benefits. The CBO found:
- Average benefits for federal workers with no more than a high school diploma were 72 percent higher than for their private-sector counterparts.
- Average benefits for federal workers whose education ended in a bachelor’s degree were 46 percent higher than for similar workers in the private sector.
- Workers with a professional degree or doctorate received roughly the same level of average benefits in both sectors.
In December 2012, private sector employees in Wisconsin earned an average weekly wage of $858, according to BLS.
Federal employees in the Badger State, with a workforce of nearly 29,000 employees, on average earned $1,133 per week. Meanwhile, the 76,882 state employees earned average pay of about $1,099 per week.
Local government employees took home considerably less than workers in both sectors, at $741 weekly on average. There were 284,652 people working for local government in December 2012, according to BLS.
Wisconsin state employees will receive a 1 percent wage increase over the next two fiscal years.
The raise comes two years after the implementation of Act 10, the Republican-led law that curtails collective bargaining for most public sector employees in the state and requires them to contribute to their pensions and 12.4 percent of the costs of their health care benefits.
Marty Beil, executive director of the American Federation of State, County and Municipal Employees Council 24, complained that the $90 million total raise for rank-and-file employees is a “token” raise.
“Providing a long-overdue pay raise for struggling public employees is not just a matter of fairness, it would kick-start Wisconsin’s stalled economy. Unfortunately, this token effort by the state falls far short,” he said in a statement last month.
Beil contends the 1 percent will be negated by increases to pension contributions and co-pays for health-care costs, and said the state “cannibalize(s) the take-home pay of front line working families.”
Even after Act 10, state workers in Wisconsin are better compensated than their private sector counterparts, according to a 2012 American Enterprise Institute study.
“In dollar terms, the average Wisconsin state worker after Act 10 receives total compensation including benefits equal to $81,637 versus $67,068 for a similarly skilled private worker, a difference of $14,569,” according to AEI’s Biggs, the study’s author.
Biggs noted that overall wages for comparable private and public sector employees are roughly even in the state. His study, though, accounted for “human capital” comparisons — factors such as job security, annual hours worked, and fringe benefits.
A spokesman from AFSCME in Washington, D.C., did not return Wisconsin Reporter’s request for comment on the latest salary information.
Contact Kittle at [email protected]
By the numbers:
A look at public sector versus private sector salaries among selected Midwest states. Data is from 2012.
Private – $52,336
Public – $63,669
Private – $39,761
Public – $60,055
Private – $46,223
Public – $57,653
Private – $49,747
Public – $55,299
Source: Stateline, the news service of The Pew Charitable Trusts.