What does this tell you about pay and politics and your taxes? What does this tell you about the possible impact on many employers and on inflation of a national $15.00 minimum wage when the national average pay today (including salaried workers) is $26.53?
Remember this when you hear about underpaid government workers, including teachers in many cases. Note the difference in benefit costs, especially considering that most government workers still have a defined benefit pension and many have employer-paid retiree medical benefits as well.
Employer Costs for Employee Compensation Summary
For release 10:00 a.m. (ET) Thursday, March 18, 2021 USDL-21-0437
EMPLOYER COSTS FOR EMPLOYEE COMPENSATION – DECEMBER 2020
Employer costs for employee compensation for civilian workers averaged $38.60 per hour worked in December 2020, the U.S. Bureau of Labor Statistics reported today. Wages and salaries cost employers $26.53 and accounted for 68.7 percent of total costs, while benefits cost $12.07 and accounted for the remaining 31.3 percent. (See table 1.)
State and local government employer costs averaged $53.47 per hour worked. Wages and salaries averaged $33.08 per hour worked and represented 61.9 percent of total compensation costs, while benefit costs averaged $20.39 and accounted for the remaining 38.1 percent. (See tables 1 and 3.)
The huge dichotomy is not between public and private workers.
It is between public workers… and private workers in “large establishments” (500 or more)
compared to private workers in “small establishments.”
See Table 3,
State and local government workers. . . .. $53.47
and Table 6,
500 workers or more…………………$ 53.83
1-49 workers………………………… $29.05
Note in the 1-49 workers group, wages are $21.75 and benefits are $7.31
One of the advantages of “privitazing” menial government jobs is the much lower pay private sector workers earn compared to government workers. (And much lower benefits.)
Remember, while waiting to pass a $15 min wage overall, Biden recently by executive order (he can do that), increased min. wage to $15. for all private workers working for government contractors.
This is the classic apples and oranges. Boilerplate on page 3 (pdf version)…
“Comparisons: Compensation cost levels in state and local government should not be directly compared with levels in private industry. Differences between these sectors stem from factors such as variation in work activities and occupational structures. ”
Primarily, more public workers are in the higher education group, which raises the average. Very few fast food workers in government.
Also, minor point; there is a difference between civilian an d private sector workers. Civilian includes all state and local workers. (but not federal) Table 1, footnote 1
The problem is with the averages. Robert Reich, former Labor Secretary, used to point out that if he (5 feet tall) and a pro basketball player (7 feet tall) were in an elevator together, their height would be an average of 6 feet. But neither of them was 6 feet tall.
True, but in this case if a few high earners are pulling up the average, then the potential impact of a $15 MW is even greater to drive up pay (and related costs) for the great majority of workers.