Skip to comments.Government Workers Cost 45% More Than Private Sector Workers - Duhhhhh!!
Posted on 03/15/2014 7:07:52 AM PDT by harpu
The United States Bureau of Labor Statistics (BLS) announced on March 12th that the total cost of employing a state or local government worker is 45% more than an equivalent worker in the private sector.
For the month of December 2013, employers in private industry spent an average of $29.63 per employee hour worked, but the equivalent cost for a government worker averaged $42.89 per hour. Not only do government employees average 33% higher pay than those in the private sector, their pension and retirement benefit costs are now an incredible 254% higher also. Given that compensation formulas for federal, state, and local government are comparable, it should come as no surprise that this year spending by the U.S. government will exceed revenue by an all-time high of $744.2 billion, and our gross national debt is a stunning $18.5 trillion.
The BLS reported that private employers spent $20.76 on average for wages and salaries, plus $8.87 for benefits per hour worked. State and local government paid $27.66 for wages and salaries, plus $15.23 for benefits per hour worked. Government employees cost 33% more in wages and 71% more in benefits. The biggest difference is that government pension costs are 254% higher than the private sector.
These differentials explain why, despite supposed efforts to rein in public spending, net federal, state, and local government spending rose from $6.1 trillion in 2013 to $6.3 trillion in 2014 and will reach $6.6 trillion in 2015. The spending rate is actually $600 billion higher, but the federal government gets inter-governmental transfers of $600 billion. The transfers come from U.S. government revenues, such as the $89.9 billion dividend the U.S. government received from the Federal Reserve, as shown below:
Total Government Spending Fiscal Year 2014:
Federal Gross Spending $3.7 trillion
Intergovernmental $-0.6 trillion
State Direct Spending $1.5 trillion
Local Direct Spending $1.7 trillion
Total Net Spending $6.3 trillion
The BLS Employer Costs for Employee Compensation (ECEC) report also broke down the legally required benefit costs in private industry for December 2013, which averaged $2.43 per hour worked, or 8.2% of total compensation. Social Security comprises the largest legally required benefit cost component at $1.39 per hour, or 4.7% of total compensation. Costs for other legally required benefits include workers compensation of $.43 or 1.4% percent of total compensation; state unemployment insurance, which averaged $.23 cents per hour worked or 0.8%; and federal unemployment insurance, which averaged just $.04 per hour worked. Discretionary benefits for life, health, and disability insurance for private industry employers averaged $2.45 per hour worked or 8.3% of total compensation. Overtime and premium, shift differentials, and nonproduction bonuses averaged another $.85 per hour worked or 2.9%, while retirement and savings averaged $1.10 per hour or 3.7%.
The legally required benefit costs for federal, state, and local are only about $1.78 or 6% of wages. Government employees usually do not have to pay into Social Security, but on every other category of benefit, their employers pay much higher costs to cover much richer benefits.
About 7% of all Americans are employed by the federal, state, and local government. But since only 56% of working-age Americans have a job, this works out to about one government worker out of eight people who are actually working. This percentage has remained about the same for the last 35 years.
Back in 1979, higher public sector pensions were considered fair compensation since the private sector paid higher wages. At the time, federal government debt was only about a third of Americas GDP. But every year since then, public sector wages and benefits have grown at about 1% faster than the private sector. As the Bureau of Labor Statistics report demonstrates, the faster compounding of total compensation for the government workers has now reached a record 45% higher than the private sector. This generous treatment of public employees at least partially explains why Americas federal debt has more than tripled to 110% of GDP.
Not surprising, since most that I've seen are at least 100% lazier and 50% less intelligent.
Government workers don’t do anything anyway
except once i blue moon they oppress Americans as in Lois Lerner of the IRS , and the EPA cretins
government school teachers graduating illiterate marxists
public housing projects are hell
NASA doing global warming research for a hoax
I am a retired oxymoron, a government worker. The lower payed are the ones that do the most work. The Highest paid GS15 “work” in Washington DC so you can guess their accomplishments.
Actually there’s a very real, hidden cost that needs to be factored into the cost of a government “worker”. That would be the cost of contractors that, IN MANY CASES, do the work that government employees should be doing. So in effect, the taxpayer is often paying twice for the same job.
Government managers often find it easier to “task” a contractor to do something because their own people either don’t have the skill or lack the dedication to get the work done. This is in many instances a reality within the government environment. The written contracts are not supposed to allow this, but it happens all the time. Its one of those things that people just wink at.
Point well made!
This disparity brought down at least two of the great Chinese Dynasty’s centuries ago. Bloated, expensive and top heavy they crushed the nation they were supposed to serve.
For example, USA Today (McPaper) did one of these "studies" a few years ago, and published the headline grabbing sensationalist claim that Federal workers make into the mid-six figures on average. A simple Google search of the number of Federal employees and the GS pay scales proved their claim completely false. McPaper then went on to claim that they fudged the statistics for some fictitious "total compensation and and quality of life" comparison, or some such nonsense. They threw in insurance, 401K matching, and other things that were not a one-to-one comparison anyway due to jobs or specific careers, but used their faulty numbers anyway.
Then, when you try to break down the comparisons of "Government Workers" - you try to ask: "Are they distinguishing among State, local, municipal, or Federal employees?" You get the sideways shuffle almost every time. Many State workers are enormously well compensated, but depending on the particular State, others are not. Moreover, if you ask if they are throwing teachers in some states (who again are well compensated in some states) with a Federal worker, they admit to fudging the data. Then you try and figure out if they are comparing professions like police and firefighters in the data, and which State, and you get the same shuffle.
In the end, "studies" like this one are gasoline bombs meant to fuel outrage. There should be outrage over many things our government does. But I don't appreciate anyone who throws red meat out there with manipulated data and attempts to play me like a fiddle.
They actually cost us more than that. Government employers waste so much on supplies we don’t need. And if they buy the wrong thing, no big deal, it’s not their money.
Truth is that most government employees post on the Internet all day on the clock. I belong to a team sports forum and the place is filled with government employees posting all day on the clock.
So what are Republicans doing to oppose this?
Sending jobs overseas?
The Republicans have been useless thus far, on employment.
Shhhhh,,,,I worked for the government!
And made way more than $4.89/hour..........
Points well made. But you left off one. Most of the time, media reporters do not understand the studies and only report attention getting headlines.
Also, these studies are typically based upon ‘averages’ and as was once pointed out, ‘averages’ often conceal more than they reveal.
When you compare average private sector wages to average government wages, you are comparing different occupations. For example, inherent to private sector wages are retail workers and the government rarely employ retail workers. Second, government workers typically (especially federal) are found in high cost areas (DC, major metro areas, etc) while most private workers are not.
The biggest costs of government workers (that is really taking a toll here in NJ) are their retirement costs; we have no money left for current services because current revenue is siphoned off by the costs of people who retired decades ago.
A former cop I know just passed away; he worked 25 years, and was collecting a pension of $72K (when he retired he was making $111K). He retired years ago, and died in his early sixties. He had the gall to complain that he didn’t receive social security (because of their retirement plan - he admitted they didn’t pay into it)...
Not surprising, since most that I’ve seen are at least 100% lazier and 50% less intelligent.
I think you meant 100% lazier and 500% less intelligent but I am not sure that it is possible to be 500% less intelligent. We now need a government funded study to determine if it is possible to be 500% less intelligent.
To conduct the study we need to hire additional government workers to compensate for the 100% lazier government employees who are too lazy to actually conduct the study and form a new agency to oversee the newly hired 100% lazier employees who are as yet of an undetermined percentage of mental acuity less than the population at large. We also need to pay them much more than they are worth to lure the best and brightest away from the over-payed private sector.
Or, as one Freeper on a related thread would vehemently contend, government workers already make far less than their private sector counterparts so we will probably need to conduct a study on the injustice of low government wages and their impact upon the laziness and reduced mental acuity of government workers which will call for more government hires to...
How big is that national debt again?
Most of the time when I compete for a contract, the government includes a list of government salaries for comparable labor categories. While it’s tempting to submit rates that support those salaries, I know that I would lose the contract, because my competitors will bid less.
Competition serves as an incentive to reduce costs. This dynamic is rarely present in the government sector. Add the unholy alliance between the Democrat Party and the public sector unions, and you can be sure that the taxpayers are going to be paying more than they should for public services.
Compare apples to apples and you will find one of them to be quite rotten. That will be the government worker apple.
And get longer vacations and more sick days.
If you figure total cost per hour worked all government workers are way overpaid.
Public sector unions need to be outlawed nationwide!