Comparing Compensation: State-Local Versus Private Sector Workers

The brief’s key findings are:

• Critics claim that the compensation of state-local workers is overly generous.

• Previous studies have found mixed results.

• Our analysis finds that compensation of state-local and private sector workers is roughly similar:
  • state-local workers earn 9.5 percent less than comparable private sector workers; but
  • this wage gap is mostly offset by higher pension and retiree health benefits.

• Thus, before making major changes to public compensation, policymakers should carefully consider the specifics of their state or locality.