Thursday, October 20, 2011

Public Service wage penalty

I've always known that government workers face trade offs when comparing their compensation to similar positions in the private sector. My friend and I joke that he, as an undergraduate business major, will graduate and make at least $10,000 more on his starting job than I will in my first job after receiving a master's degree.

Recently, the Center for State and Local Government Excellence published an article that clearly distinguishes what those trade offs are. Their basic findings are:

  • State and local workers have a wage penalty of 9.5 percent.
  • Pension contributions and retiree health insurance help close the gap.
  • Total compensation for public sector workers is about 4 percent less than that in the private sector.

To read the complete report, click here.


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