Government employee unions constantly complain that their members are underpaid. But a recent analysis published in USA Today showed that state and local government workers have much higher compensation than those in the private sector…and that gap is growing.
Last year, the total compensation paid to private sector employees averaged $26.09 an hour, but public sector employees made an average of $39.50 an hour! After adjusting for inflation, compensation this decade has increased by 16 percent for government employees but only 11 percent in the private sector.
The big reason for this is that the private sector has moved to 401(k)-type retirement and health savings accounts, while governments have stuck with the traditional pension and health plans that bankrupted American automakers.
Texas’ plan is among the most generous, with taxpayers picking up 100% of the health insurance premiums for state employees. For taxpayers, that has meant an additional $1,330 per employee in health insurance premiums between FY 2001 and FY 2007, with no meaningful effort to control those benefits or pursue consumer-directed alternatives.
It’s only a matter of time before these plans bankrupt the taxpayers. Altogether, government pension plans have a current unfunded liability of $1 trillion, which will continue to grow.
Government employees should be on the same footing as those who pay their salaries.
– David Guenthner