Comments on 'comparing compensation: state-local versus private sector workers,' center for state and local government excellence

I and my co-author, Jason Richwine of the Heritage Foundation, entered the discussion on public sector compensation largely in response to a paper published by the Center for State and Local Government Excellence (CSLGE) in April 2010 titled “Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years.” This paper, authored by Keith Bender and John Heywood, concluded that, on average, state and local government employees received total wages and benefits around 7 percent lower than private sector workers with similar education, experience and other attributes. Jason and I argued that this was likely an underestimate, as the study understated the value of public sector defined benefit pensions, omitted the value of retiree health coverage that is predominant in the public sector, and excluded the value of public employees’ greater job security. Our critique was extended to a series of additional papers published by the Economic Policy Institute and authored by Rutgers University Professor Jeffrey Keefe.

Andrew Biggs is a resident scholar at AEI.

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