Comparing Public and Private Sector Compensation
Testifying in favor of House Bill 1645, which would prohibit public employees from participating in collective bargaining, state Rep. Andrew Manuse (R-Derry) argued that allowing public sector employees to bargain collectively gives them an unfair negotiating position that has lead to higher compensation than they would receive in the private sector.
[P]ublic sector unions are contrary to the public good because they give state workers an unfair seat at the table of government, leaving taxpayers out in the cold. This has led to regular salary and benefit increases in the public sector, even when the economy is tanking. This has also led to a public sector employee base that earns more than their private sector counterparts. [emphasis added]
This is simply not true.
In 2010, researchers for The Center for State and Local Government Excellence collected data from the Bureau of Labor Statistics and categorized workers based on the characteristics that help determine earnings: education, training, experience, job location and occupation. They compared similar employees and isolated the effect of public or private sector employment.
The resulting report, “Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years,” found:
- State employees earn 11 percent less, and local workers earn 12 percent less, than comparable private sector workers.
- Over the last 20 years, the earnings for state and local employees have generally declined relative to comparable private sector employees.
- Benefits comprise a greater share of compensation in the public sector, but even after accounting for benefits, state and local employees have lower total compensation than their private sector counterparts.
- Total compensation, including benefits, is 6.8 percent lower for state employees and 7.4 percent lower for local workers, compared with comparable private sector employees.
