March 12th, 2010 by NC Tea Party Staff Categories: Archives No Responses

The recession and the ongoing jobless recovery devastated much of the private-sector workforce 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 workforce that has increased its proportion of higher-skilled workers during the past 15 to 20 years.

Small-government advocates see it differently.  Compensation for government workers “is a gigantic problem” that will only get worse in the future, says Chris Edwards, director of tax policy studies at the Cato Institute:

  • 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.
  • The cost of today’s benefits for government employees ($13.49 per hour)  assumes that these retirement benefits are fully funded, however, the benefits  are underfunded by an estimated $3 trillion.
  • Benefit costs eventually will soar, and taxpayers will be required to pay  the difference between available resources and the overpromised benefits as  government workers of the baby boom generation, who start to turn 65 next  year, begin to retire en masse.
  • Also, government workers also have the rare privilege of being able to  retire at age 55.

Source: David M. Dickson, “‘Gov’t workers feel no economic pain,”‘ Washington Times, March 11, 2010.

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