For Immediate Release September 27, 2012

Contact:  Leslie K. Paige 202-467-5334 Luke Gelber 202-467-5318

CAGW Releases New Public Employee Compensation Report

(Washington, D.C.) - Citizens Against Government Waste (CAGW) today unveiled a new report, Public Servants or Privileged Class: How State Government Employees are Paid Better than Their Private Sector Counterparts. CAGW was joined at the news conference by San Jose City Councilman Pete Constant and John Dunham, managing partner of John Dunham & Associates, the research firm that conducted the survey. The release of the report was accompanied by a video, which can be seen here.

The report analyzes state government employee wages and benefits in all 50 states, and, for the first time, provides a detailed comparison of compensation for public and private-sector workers in the same job categories, from architecture and engineering to transportation. The report found that state governments pay on average 6.2 percent more per hour in wages and benefits, including pension benefits, than the private sector for the 22 major occupational categories that exist in both sectors.

Additionally, the report found that no state government pays its employees on par or below what the private sector pays; that the largest percentage difference in pay between the public and private sector is 40 percent; that the highest difference in pay is $61 per hour. This disproportionate public-sector compensation is a major driver of unfunded state and municipal pension liabilities across the country, which have been accurately described as looming financial crises by pundits and experts of all political stripes.

“Generations of elected officials made promises to public employees that are simply unsustainable,” said San Jose City Councilmember Pete Constant. “Politicians should not be asking hard-working taxpayers in the private sector to pay more for the pay and benefits of their better-compensated public sector counterparts while making devastating cuts to the essential services our residents rely on like police, fire protection, and basic infrastructure. Serious reform of public sector compensation is critical if we are to put an end to the massive cuts that governments at all levels have been making to feed the ever-growing beast of public employee benefits.”

“What struck me most while doing this analysis was the lack of transparency on the part of the government in making data available,” said John Dunham. “While I can get detailed information on vegetable production across the country from the federal government, wage and benefits data – particularly state and local government wage and benefit data – are nearly impossible to obtain without sending freedom of information requests to literally thousands of individual state agencies and boards. Since the taxpayers are funding these salaries, one would think that the taxpayers deserve to know what they are paying and what they are receiving.”

“Bankrupt municipalities like Stockton, Calif.; Harrisburg, Pa.; and Boise County, Idaho have learned the hard way that while overcompensating public employees – especially with generous retirement pensions – might be politically expedient, there comes a time to pay the piper,” said CAGW President Tom Schatz. “Without real changes to the existing system, entire states may find themselves insolvent. Addressing any serious problem requires knowledge of its underlying causes; this report, the first of CAGW’s new public pension education project, is intended to spur debate and action on public sector employee compensation reform.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.