Employee compensation in the state and local government sector increased at twice the private-sector rate during the 12 months ending in December, according to national data released today by the federal Bureau of Labor Statistics.

The difference between the two sectors disappeared during the fourth quarter of 2009, when total compensation costs rose slightly faster (at 0.5 percent) in the private sector than in the state and local sector (0.4 percent).  However, changes in a single quarter can be misleading.  In New York, for example, state workers pocketed their latest 3 percent base pay increase last April; only those on longevity “steps” who reached their hiring date anniversaries between October and December would have been recorded as receiving an added wage hike in the final quarter of 2009.  In the private sector, meanwhile, many firms pay bonuses at the end of the year.

What is most striking about the data is the continuing difference in benefit costs.  As shown in the table reproduced below, benefits costs for state and local workers–including vacations, health insurance and retirement benefits–are still rising twice as fast as benefit costs for private-sector workers.

 

 

 

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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