Progress: Government Workers Cost 45% More Than Private Sector WorkersPosted: March 14, 2014 | |
Chriss W. Street writes: 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.
“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.”
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….Read more >>>
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