State and local governments have slashed payrolls to seven-year lows,
and their wage raises have lagged the private sector's. But public
spending on retirement benefits has surged, putting more pressure on
staffing, wages and other benefits.
From the start of the recession in December 2007 to June 2012, the cost to compensate the average state and local government employee grew 8.9%, just shy of the 9% growth in private-sector compensation costs, according to Labor Department data.
But in dollar terms, state and local employees widened their compensation edge over private workers to $12.30 per hour in June from $11.31 per hour in December 2007.
Public-wage costs climbed 6.6% in that time, and private wages were up 8.6%. But costs for public-sector benefits rose 13.6%, while private costs grew 9.9%.
The increase in public benefits spending was due largely to retirement costs, which jumped 22.7% from late 2007 vs. 7.4% in the private sector, where pensions are increasingly rare.
State and local workers saw relatively small increases in paid leave, supplemental pay was flat, and insurance cost growth (16.9%) was comparable to the private sector's (16.4%).
With yawning budget deficits forcing state and local governments to cut payrolls by 716,000, or 3.6%, from their summer 2008 peak, workers may have traded off higher wages for more retirement compensation.
Read more: http://news.investors.com/economy/092512-626998-state-local-austerity-moves-in-opposite-directions.htm?src=HPLNews
From the start of the recession in December 2007 to June 2012, the cost to compensate the average state and local government employee grew 8.9%, just shy of the 9% growth in private-sector compensation costs, according to Labor Department data.
But in dollar terms, state and local employees widened their compensation edge over private workers to $12.30 per hour in June from $11.31 per hour in December 2007.
Public-wage costs climbed 6.6% in that time, and private wages were up 8.6%. But costs for public-sector benefits rose 13.6%, while private costs grew 9.9%.
The increase in public benefits spending was due largely to retirement costs, which jumped 22.7% from late 2007 vs. 7.4% in the private sector, where pensions are increasingly rare.
State and local workers saw relatively small increases in paid leave, supplemental pay was flat, and insurance cost growth (16.9%) was comparable to the private sector's (16.4%).
With yawning budget deficits forcing state and local governments to cut payrolls by 716,000, or 3.6%, from their summer 2008 peak, workers may have traded off higher wages for more retirement compensation.
Read more: http://news.investors.com/economy/092512-626998-state-local-austerity-moves-in-opposite-directions.htm?src=HPLNews
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