U.S. News

State, city wages lag private sector: report

WASHINGTON (Reuters) - State and local employees are often paid less than their counterparts in the U.S. private sector, even though public sector employees typically have more education, according to a report released on Wednesday.

State workers typically earn 11 percent less than private sector employees with comparable education and work experience, while local workers are paid 12 percent less, according to the report.

The report was commissioned by the Center for State and Local Government Excellence and the National Institute on Retirement Security.

Keith Bender and John Heywood, both economists from the University of Wisconsin-Milwaukee, analyzed federal labor data reaching back 20 years and found that state and local compensation has been declining relative to private compensation.

Public employees also have lower total compensation, which includes health care, than workers in the private sector. And state and local employees are twice as likely to hold a college degree or higher than are private sector employees, the report said.

Since the recession began in 2007, public employees have lost jobs or had to take unpaid days to help state and local governments keep their budgets in balance.

“Although the current recession calls for equal sacrifice, the long-term pattern indicates that state and local workers are not, on average, overcompensated,” said the report.

The report did not mention contractors or provide detail on how the private companies that are increasingly being hired to perform public jobs pay their employees.

Reporting by Lisa Lambert; Editing by Leslie Adler