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STATE AND LOCAL GOVERNMENT COMPENSATION Source: State and Local Government Wages and Salaries, Health, and Defined Benefits for All Occupations; Cost per hour worked 1 Wages and salaries as a portion of total compensation has been declining (from 67% to 63%), as health insurance and defined benefit retirement costs have risen. A fourth component of total compensation – other benefits – has stayed relatively unchanged at 15%-16%. While there has been volatility in individual components of compensation, total compensation has stayed fairly consistent, averaging about a 2% increase in employer costs per year. Some factors contributing to the differential in compensation may be the types of positions reflected in the various pools of employees (e.g., entry-level/retail vs. skilled/management), the tendency to outsource or automate more routine, lower-skilled tasks (e.g., landscape maintenance), or the increasing prevalence of those with a college degree among government employees (e.g., police officers with a degree in criminal justice). SHARE OF TOTAL COMPENSATION 1 Bureau of Labor Statistics, Employer Costs for Employee Compensation, Cost per hour worked. For 2016 compensation, figures are based on Q1-Q3 averages. 2 Bureau of Labor Statistics, Inflation Calculator. 3 U.S. Census Bureau, Current Population Survey. 37 % Benefit cost as a portion of total compensation (up from 33% in 2006) 1 19 % Inflation since 2006 2 91 % Increase in defined benefit costs since 2006 1 67% 63% 56% 58% 60% 62% 64% 66% 68% 0% 2% 4% 6% 8% 10% 12% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Health Insurance Defined Benefit Retirement Wages and Salaries 20O6 67 % 11 % 16 % 6 % 2016 63 % 12 % 15 % 10 % TOTAL COMPENSATION The costs of both health benefit and defined benefit retirement have increased significantly since 2006. COMPENSATION BREAKOUTS: STATE AND LOCAL GOVERNMENT, PERCENTAGE CHANGE PER YEAR 1 TOTAL EXPENDITURES PER HOUR WORKED: STATE AND LOCAL GOVERNMENT COMPENSATION 1 COMPARISONS TO PRIVATE SECTOR: STATE AND LOCAL GOVERNMENT COMPENSATION 1 TOTAL COMPENSATION: STATE AND LOCAL GOVERNMENT, PERCENTAGE CHANGE PER YEAR 1 2016 -2.0% 0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2008 2010 2012 2014 Wages and Salaries Health Insurance Defined Benefit Retirement Other 2016 -2.0% 0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2008 2010 2012 2014 Total Compensation Total Benefits $0 $5 $10 $15 $20 $25 $30 $50 $60 $70 $20 $30 $40 2006 2008 2010 2012 2014 2016 Wages and Salaries Health Insurance Defined Benefit Retirement Other State/Local: Primary, secondary, and special ed. teachers State and Local Government Private Industry: Education and health services Private Industry: All occupations 2006 2008 2010 2012 2014 2016 2006 2008 2010 2012 2014 2016 Trends toward increasing prevalence of degrees, in all professions, reflect retirement of older, less educated workers and their replacement by a generation where degrees have become the norm. PERCENTAGE WITH AT LEAST A BACHELOR’S DEGREE COMPENSATION AND COLLEGE EDUCATION: 3 STATE AND LOCAL GOVERNMENT VS. PRIVATE SECTOR 1 Local Gov 0% 10% 40% 50% 20% 30% 60% 2006 2011 2016 State Gov Private Sector Among employees at least 25 years old 3 . In this figure, private sector includes ‘Employees earning wages/salary, private.’ It excludes self-employed individuals. Wages and Salaries Health Insurance Defined Benefit Retirement Other $20 $30 $40 $50 $60 20% 30% 40% 50% 60% Figures shown in compensation cost per hour worked. Figures shown in compensation cost per hour worked. State and Local Compensation State and Local: % with Bachelor’s or higher Private Compensation Private: % with Bachelor’s or higher In this figure, private sector includes ‘Employees earning wages/salary, private.’ It excludes self-employed individuals.
