A study recently released by the Keystone Research Center and the Economic Policy Institute suggests that Pennsylvania’s state and local government employees are not overpaid compared to private sector workers. In fact, the study, Public Versus Private Employee Costs in Pennsylvania: Comparing Apples to Apples, indicates that hourly compensation costs for the commonwealth are lower than those of private employers.
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Get Your Report Now!Written by Jeffrey Keefe, a Labor and Employee Relations professor at Rutgers University, the study controls for education, experience, organizational size, gender, race, ethnicity, citizenship and disability. Based on data collected from the U.S. Census Bureau and Bureau of Labor Statistics, the study found the following:
- Pennsylvania public employees earn 2.1% less per hour than similar private-sector workers. When compared on an annual basis, full-time state and local workers are undercompensated by 5.4%.’
- Pennsylvania’s public workers are more highly educated than private-sector workers: 53% of full-time public-sector workers in the state hold at least a 4-year college degree, compared to 32% of full-time workers in the private sector.
- Pennsylvania state and local governments and school districts pay college-educated workers on average 21% less than private employers.
Keefe concludes that “Pennsylvania public employees—like most other American workers—have in fact been victims of the worst national recession since the Great Depression.” Public sector employers have cut 3,400 jobs in the past year as a result of budget cuts, Keefe notes.
Reaction. Analysts at the Allegheny Institute for Public Policy objected to the report’s “implicit assumption” that “all high school grads, those with bachelor’s degrees, master’s degrees, etc., with similar years of experience should earn the same compensation as all other workers having the same level of education.” The study is based on “inappropriate—and misleading—broad averages rather than comparisons of specific jobs and skill level requirements” and is therefore “fatally flawed,” the analysts concluded.