Your – or maybe not – pay and benefits

According to data released by the Bureau of Labor Statistics today, 2-24-26:

Employer costs for private industry workers averaged $32.37 per hour worked for wages and salaries and $13.68 for benefits in September 2025.

Employer costs for state and local government workers averaged $40.24 per hour worked for wages and salaries and $25.04 for benefits.

What does that tell you about government employment and taxes?

And guess which sector has the weakest performance review/appraisal system, the most generous pay scale advancement and most job security?

One of the major differences is that traditional pensions are still nearly universal in the public sector.

7 comments

  1. It is about time someone is talking about the difference between government and the private sector.

    Make a positive difference in someone’s life today. Bill Mitchell

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  2. Average smaverage…

    “In the average state, state government employees receive a total compensation premium of around 10 percent relative to private-sector employment. However, because the most populous states tend to pay larger premiums, the average state government employee receives a slightly larger compensation premium. Nevertheless, substantial state-to-state variation means that national averages are not particularly meaningful. For instance, pay differentials range from a compensation penalty of 6 percent in Virginia to a premium of 42 percent in Connecticut.”

    Even within each state, all workers are NOT the same…

    “When benefits are added, total compensation for less-educated state government employees lies around 20 percent above private sector levels. Total compensation for bachelor’s degree holders is about even with private sector levels. Professional degree holders such as doctors or lawyers and individuals with doctoral degrees appear to receive total compensation roughly 18 percent below private-sector levels, although certain unmeasured factors may compensate.”

    https://www.aei.org/research-products/working-paper/overpaid-or-underpaid-a-state-by-state-ranking-of-public-employee-compensation/

    This study is about fifteen years old, but should give good caution about comparing ‘averages’.

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    1. Simply compare the total compensation of state workers to private sector workers and see what you get. The differences have been significant for years. About 15% of private sector workers have a traditional pension while nearly 90% of state workers do most often with retiree health benefits. Some state workers also have a defined contribution plan as well. Those differences alone are significant.

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  3. Worthless survey data. This is another example of the stupidity of using averages to describe a highly complex environment.

    For comparison, have you ever heard of the Gender Pay Gap? It is an attempt to take every working woman and every working man, sum up their direct compensation and do a comparison – suggesting that the difference in sex was the sole reason for the difference in pay.

    However, once you break it down by position, qualifications, tenure, hours worked, etc. the difference all but disappears.

    I agree there will be a difference in defined benefit pension plans, but, aggregate all retirement spending (DB, DC, retiree medical, Social Security), adjust for contributions (many state and local pension plans are still contributory, and many state workers don’t contribute to Social Security) …

    But, let’s defer conclusions that government workers are overpaid until we see a study that compares wages and benefits for like positions, qualifications, tenure, hours worked, etc. of government workers versus non-government workers.

    Do we pay too much for the too much government we have? I believe that is a YES. The government is involved in too many things that should be left to the private sector, and, too many politicians rely on placating government workers and union workers as a vote buying scheme (see, for example, during the Biden Administration, the Social Security Fairness Act, and the multiemployer pension plan bailout incorporated in the American Rescue Plan Act of 2021)

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    1. These numbers have been consistent for years. State workers have a higher total compensation package. I sat on three governors task forces on this issue. It goes back decades. 90% or so of state workers still have a DB plan, many with COLAs.

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  4. This is humorous, coming from someone who retired with a lavish pension, having stock gifted to him, and access to a generous health plan and retirement savings plan.

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