Home  >  Wisconsin  >  WI public sector workers earn nearly $12k more than private sector

WI public sector workers earn nearly $12k more than private sector

By   /   July 9, 2013  /   5 Comments

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.

WAGES RISING: Public and private sector earnings are on the rise, according to new BLS data. But government jobs on average pay about $12,000 more per year than private sector employment.

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 mkittle@wisconsinreporter.com

By the numbers:

A look at public sector versus private sector salaries among selected Midwest states. Data is from 2012.

Illinois

Private – $52,336

Public – $63,669

Iowa

Private – $39,761

Public – $60,055

Michigan

Private – $46,223

Public – $57,653

Minnesota

Private – $49,747

Public – $55,299

Source: Stateline, the news service of The Pew Charitable Trusts.

Click here to LEARN HOW TO STEAL OUR STUFF!

Kittle is a 25-year veteran of radio, newspaper and online journalism. In July 2011, Kittle joined Watchdog.org as bureau chief for Wisconsin Reporter. He has spent much of the past three years covering the seismic political changes taking place in the Badger State. Last year, Kittle joined Watchdog’s national reporting team, covering everything from energy policy to governmental assaults on civil rights. Beyond being published in Wisconsin’s daily newspapers and in multimedia news outlets, Kittle’s work has appeared on Fox News, and in Human Events, Reason Magazine, Newsmax and Town Hall. His special investigation into a politically charged John Doe probe, “Wisconsin’s Secret War,” was the basis of a 2014 documentary on Glenn Beck’s TheBlaze. Kittle has made several appearances on Fox News, including “On the Record with Greta Van Susteren. He serves as weekly politics commentator for Lake 96.1 FM in Lake Geneva, and WRJN-AM 1400 in Racine. His resume includes multiple awards for journalism excellence from The Associated Press, Inland Press, Wisconsin Broadcast Association and other journalism associations. Contact Kittle at mkittle@watchdog.org.

  • Barlowmaker

    Nothing new here. Prepare for the usual onslaught of Public Unionista parasites rationalizing this disparity. There are lots of “hard working and underpaid” teachers in the middle of their three month summer vacations with time to kill.

  • Eric Walters

    Let’s get this race to the bottom going. I am so jealous of anyone doing better than me!

  • Jon Robert

    Please. Liars figure. I ran the census numbers of average pay. It took 20 years for a state worker in the same job to reach that private sector census average pay. Furthermore there are no fast food workers or retail check out cashiers working for the state to skew the average down. The state employs college professors, governors, engineers and accountants. HELLO the state positions don’t skew the average down, they skew the average UP! like I said. Liars figure.

  • Jon Robert

    DUH! The employers that pay high school kids minimum wage is the reason school is not all year long. They want the cheap labor kids to work for them. If you would have been paying attention you would know that is the reason kids are off for the summer not because of the teachers

  • Jody

    So the state doesn’t employ any wage earning workers huh? No custodians, carpenters, “food service technicians”, DOT workers, etc., etc., etc.. You’re so right Jon. “Blah ha, Blah ha!”