Thursday, March 11, 2010

Gov't workers feel no economic pain


Gov't workers feel no

economic pain

Thursday, March 11, 2010

The recession and the ongoing jobless recovery devastated much of the private-sector work force last year, sending unemployment soaring, but government workers emerged essentially unscathed, according to data released Wednesday by the Labor Department.

Meanwhile, the compensation for state and local government employees continued to easily outdistance the wages and benefits for workers in private business, a separate Labor Department report showed.

Private-industry employers spent an average of $27.42 per hour worked for total employee compensation in December, while total compensation costs for state and local government workers averaged $39.60 per hour.

The average government wage and salary per hour of $26.11 was 35 percent higher than the average wage and salary of $19.41 per hour in the private sector. But the percentage difference in benefits was much higher. Benefits for state and local workers averaged $13.49 per hour, nearly 70 percent higher than the $8 per hour in benefits paid by private businesses.

Paul Booth, executive assistant to the president at the American Federation of State, County and Municipal Employees (AFSCME), attributed the pay difference to a changing government work force that has increased its proportion of higher-skilled workers during the past 15 to 20 years.

"In government payrolls, you no longer have low-wage occupations, such as janitors, whose jobs have been contracted out to the private sector," he said. This trend has effectively increased the average wage of

those higher-skilled workers who remain, said Mr. Booth, whose union represents 1.6 million workers.

Small-government advocates see it differently.

Compensation for government workers "is a gigantic problem" that will only get worse in future years, said Chris Edwards, director of tax policy studies at the Cato Institute, which advocates less government and lower taxes.

"The defined-benefit pension plans for state and local workers and their post-retirement health care costs do not include the extent to which those benefits are underfunded or overpromised," Mr. Edwards said.

The cost of today's benefits for government employees ($13.49 per hour) assumes that these retirement benefits are fully funded. However, Mr. Edwards estimated that the benefits are underfunded by $3 trillion.

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