The cost of hiring state and local government workers in the second quarter of 2024 was 39.7% higher than private sector employees, mainly due to more generous benefit plans, according to data released Tuesday by the Bureau of Labor Statistics (BLS).
Total compensation costs, including wages, salaries and benefits, averaged $43.94 per hour for private sector employees, about 40 percent lower than the average hourly compensation cost of $61.37 for state and local government employees. According to According to BLS data, the difference is largely due to expensive government benefit programs, with private sector workers paying an average of $13.04 per hour for benefits, more than 80 percent lower than the $23.57 per hour for state and local government workers. (Related article: 'The runway is running out': Experts say huge government spending is fuelling economic growth)
“These data show a clear lack of efficiency in government relative to the private sector, and it's getting worse over time,” EJ Antoni, a research associate at the Heritage Foundation's Grover M. Herman Center on the Federal Budget, told the Daily Caller News Foundation. “One of the big factors driving the rise in benefits for public employees is the expansion of pension plans, which far exceed the retirement benefits private sector workers receive. This is especially true for defined benefit plans, which are so expensive that the private sector has almost completely transitioned away from them.”
In the second quarter of this year, government employees' costs were 39.7% higher than private sector employees, with wages and salaries 22.3% higher and benefits a whopping 80.8% higher. Government work is hard work! pic.twitter.com/HrZHcHAFAw
— Dr. EJ Antoni (@RealEJAntoni) September 10, 2024
Defined benefit plans, unlike 401(k)s or defined contribution plans, are fixed, pre-determined benefit plans that do not require employees to contribute income towards retirement benefits. According to Filed with the Internal Revenue Service. In 2022, about 86% of state and local government employees participated in defined benefit pension plans, compared with just 15% of private sector employees. According to To the Urban Institute.
According to BLS data, state and local government service workers earn an average hourly wage of $47.05, while private sector service workers' hourly wages range from $17.88 to $34.64 — a difference of about 163 percent and 36 percent, respectively.
“Government work is hard work!” Antoni said. post X is analyzing the BLS report.
The White House did not immediately respond to a request for comment.
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