Thursday, January 07, 2010

stats comparing gov't. vs. private sector

From a new Cato report on "Employee Compensation in State and Local Governments":
The study's author, Chris Edwards, found that the wage premium for public sector employees was about 34 percent and for benefits about 70 percent.

One way to assess whether overall public sector compensation is too high is to look at voluntary job quit rates. U.S. Bureau of Labor Statistics data show that the average quit rate in the state and local workforce is just one-third the rate in the private sector.5 That suggests that state and local pay is higher than needed to attract qualified workers.


Excessive Retirement Benefits

Table 1 indicated that state and local workers have very generous defined-benefit (DB) pension plans compared to private sector workers. These plans have been overpromised and underfunded, which has created huge long-term gaps in government budgets. Indeed, these gaps are not reflected in the Table 1 data, and thus the ultimate costs of DB plans will be higher than indicated.

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