Working in America: Public vs. Private Sector

By MichaelJames

Feb 18, 2011 6:51pm

ABC News' Dan Arnall reports:

As the protests in Wisconsin bring the issues of public sector workers pay and benefits into the national spotlight, it’s important to understand the actual differences between what government worker and private sector workers actually get in return for their efforts.
 
WAGES
 
The latest data from the Bureau of Labor Statistics (2009) show that government workers make about 5 percent more than private sector workers on average.  

But, as can be seen in the following chart, the headline numbers hide some major disparities beyond the headlines.

Average Annual Wage
Federal Govt. Workers $67,756 
State Police $61,000 
Local Firefighters $60,572
State Govt. Workers $48,742 
State Legislative Workers $48,129
Government (all types) $47,552
Private (total sector) $45,155
Local Govt. Workers $43,140 
Local Schools $41,113 
 
Average Annual Wage
Private Sector CPA $71,216
Federal Govt. CPA $67,531
Local Govt. CPA $64,050 

SOURCE: BUREAU OF LABOR STATISTICS, 2009

Local teachers make 9 percent less than the average private sector worker. And federal employees are substantially better paid than the average state worker.  
  
But working for the government doesn’t automatically mean a bigger paycheck.
 
Take, for example, accountants. Government data shows that a certified public accountant who works in the private sector will have an annual salary of $71K. That same certification and education will lead to a $68K average salary for the federal government and $64K if you work for a local government.
 
UNION MEMBERSHIP
 
Some of this headline pay disparity is likely attributable to the union representation many in government enjoy. In 2010, the Bureau of Labor Statistics data showed that 36.2 percent of public sector workers were unionized, compared to a 6.9 percent union membership rate for private sector workers.
 
Workers in education, training, and library occupations had the highest unionization rate at 37.1 percent.
 
RETIREMENT BENEFITS
 
Public sector workers also are significantly more likely to have traditional pension plans – called “defined benefit” plans. The latest data from BLS showed 20 percent of workers in the private sector have pension plans. In the public sector, defined benefit plan coverage is four times greater — about 79 percent.
 
HEALTH CARE BENEFITS
 
The latest Kaiser Family Foundation survey on the costs of health insurance showed government workers are more likely to be offered health insurance while they work and in retirement.

In retail firms, for example, only 48 percent of workers were covered by health benefits offered by their firm (the worst industry for insurance coverage), compared to 80 percent of workers in state and local government (the best industry for insurance coverage).

And those state/local government employees are paying less for coverage than their private sector neighbors.
 
Data from Kaiser shows the average employee cost for “family” health coverage was around $3,700 in the latest year. Employees in the service sector pay about $4,200 for similar family coverage, mostly because their employers require a bigger contribution from the employee to get the benefit.

-Dan Arnall

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