Government Workers Make 45% More Than Private Sector Employees
ChrisBanescu.com | by Chris Banescu | Feb. 9, 2010
A new report from the Bureaus of Labor Statistics that was released today, shows that almost 15 million Americans are currently out of work and unable to find jobs. Worse still, those with jobs have not seen their wages increase much in the last 10 years. However, government workers are enjoying a boom in hiring and generous salary increases thanks in large part to very cushy pensions and other benefits.
The pay differential between public sector employees and the private sector shows a troubling trend. Government workers have benefited greatly, even during the severe recession, and their wages now outpace the employee compensation in private industry. According to recent research done by Mark J. Perry, professor of finance and economics at the School of Management of the University of Michigan government employees make on average 45% more than private sector employees.
state and local government employers spent an average of $39.83 per hour worked ($26.24 for wages and $13.60 for benefits) for total employee compensation in September 2009. Total employer compensation costs for private industry workers averaged $27.49 per hour ($19.45 for wages and $8.05 for benefits). In other words, government employees make 45% more on average than private sector employees.
According to another BLS report, compensation for private industry workers has increased by 6.9% between December 2006 and December 2009, compared to a 9.8% increase for government workers (state and local) over the same period.
Meanwhile, the unemployment situation in the US progressively deteriorates with few signs of improvement. Finding a job for ordinary Americans has gotten much harder. Forbes summarizes the many problems workers still face:
Finding a job got much tougher last year, as the number of available openings fell by nearly one quarter.
At the same time, the unemployed population soared by more than one-third, leaving more laid-off workers competing for fewer jobs.
All told, there were 6.1 unemployed workers in December, on average, for every available position, according to Labor Department data released Tuesday.
That’s a sharp increase from 3.4 jobless workers per opening in December of 2008, and much worse than the 1.7 unemployed people per opening in December 2007, when the recession began.
That may seem like a lot given the severity of the recession, but that’s down from 3.2 million in December 2008. And it’s way below the 4.8 million openings that existed in June 2007, the peak reached before the recession.
The U.S. economy has lost approximately 8.7 million jobs since November 2007 when a high of 146,483,000 jobs was reached. As of January 2010 the U.S. had barely over 137 million private sector jobs. From the CyberEconomics blog we get this depressing information:
The number of employed (total jobs) dropped by 589,000 from Nov to Dec. Most did not move to unemployed but dropped out of the labor force. In the past year, (December to December) 5,390,000 jobs have been lost–that is drop in the number of employed. However, there is some good news–the October unemployment rate was revised from 10.2% to 10.1%.
The labor force participation rate has dropped from 66.5% in December 2008 to 64.6% in December 2009. As people lost jobs, many left the labor force. If they had stayed in, being counted as unemployed, the unemployment rate would be 11.6%.
Given the lack of real economic leadership and no free-market policies, coupled with aggressive taxation and anti-business policies from the Obama administration and the Democrats in Washington, there is little hope that job losses will abate any time soon. Things may even get worse. Dark clouds are on the horizon for the American workers.
Given the lack of real economic leadership, virtually no free-market policies coming from the White House, coupled with aggressive taxation and anti-business policies from the Obama administration and the Democrats in Washington, there is little hope that job losses will abate any time soon. Things may even get worse. Dark clouds are on the horizon for the American workers.
On the other hand, government workers are enjoying their amazing good fortune, richly rewarded with our tax dollars by career politicians who seem to have forgotten their oaths of office and constitutional responsibilities. We get to sacrifice and they get all the benefits of power. The political elites in DC keep thinking they can have their cake and eat it too, while the American taxpayers have to make do with the crumbs left over from the government lavish feasts and perpetual bailouts of the unions, failed car companies, failed banks, failed programs, etc..
I believe they’re in for a big surprise come November 2010.
Chris Banescu is an attorney, entrepreneur, and university professor. His business, ethics, and management articles and podcasts can be found on www.ChrisBanescu.com. He is a regular contributor to OrthodoxyToday.org, manages the conservative site www.OrthodoxNet.com, writes articles, and has given talks and conducted seminars on a variety of business and management topics. He has also written book reviews for Townhall.com and articles for Acton.org.
6 comments Tuesday 09 Feb 2010 | Editor | Economics, Government Incompetence, Leftist Incompetence |
It seems the natural next step towards Socialism. Everyone wants a government job-Why?… BECAUSE of the higher pay, better benefits… etc., etc.,etc. Once a citizen is firmly intrenched in the “program”, its much easier to control the masses.
Any government worker, from POTUS to a small town clerk, is in service of their country. Period. As an American citizen they have the right to follow whatever “calling” suits them. Public Service was once, in the minds of my generation, a position of trust, honor and patriotic duty.
My husband is a cop; Has been a cop for 30 years. He’s made the average number of promotions, salary increases mandated by our state’s budget constraints.. He’s done better then most in this respect. He’s called upon at all hours of the day and night… If his community needs him, he is available. He is aware of the impression he gives to others in the community- even off-duty. I’m not saying this man is a messiah, I’m saying WE knew this “calling” was never going to make us rich. WE decided it was important to live our lives by OUR beliefs, convictions and principles… Exactly the same should be said about plumpers, engineers, doctors… and damn sure, public servants…
If, within you, there is a ‘calling’ to serve your country… I salute you. If, however your “calling” is to have it all…. well, my salute is quickly reduced to an indecent gesture.
Our founding fathers’ vision was for the citizen’s representatives to congress be selected from within their ranks. They were to serve their country, honorably, and then return to their choosen profession. Now – Public Service IS a profession.
In the last 60-odd years, with the immergence of this public service profession and due to the disproportionate pay/benefits afforded them by the people, government has grown to unsustainable levels.
To repair this damage, it seems increasingly necessary to impose term-limits and spending restrictions. The public must demand accountability, honor and truth from these servants. These men/women must understand and expect to be returned to the fields from which they were harvested.
Those we elect should not be career politicians, idealogical philosophers or community organizers. They should be of the people and for the people.
“Unsustainable” and after 50 years of watching you people in government at work “You’re not worth it”
Unfortunately, our brave men & women of the US Military still don’t make anywhere NEAR what they should, but the state & federal officials have their extreme expense accounts in addition to their salary and the best health care available!
Its no wonder we’re in a recession…the rich folk dance while the poor man pays the bill!
I would agree … EXCEPT for Law Enforcement officers. Trust me, the majority of our cops work in small towns/departments through out this nation. My husband has been with LE for 30 years, the majority of which was as a Patrol Supervisor. He is now an investigator… Even with experience – he makes less then what you’ve quoted the private sector makes.
We spent more for Pelosi to drink and eat with friends on a government supplied aircraft then it would take to pay 3 cops in our county for an entire year! And they don’t come close to recieving that much in “benefits” either!
Crazy, I know, but true. Our priorities are so screwed up… When we spend more for play than we do for protection of American taxpaying citizens.
You think that’s bad…now if they push healthcare through via reconciliation they will need to hire thousands more employees who will get exorbant salaries and benefits. With the cost of healthcare and the cost of salaries and benefits for all these new employees the country will go broke. Also, can anyone tell me why our government needs a union! Again…the unions are killing this country. They have forced jobs overseas…they are wicked.
All government workers should have their salary and benefits cut by 45% to bring them inline with non-government workers. All government should also cut jobs by 50%…we don’t need all this fluff in government.