Government Workers Got Bigger Raises Than Private Sector Workers Last Year

The compensation of government workers rose at a faster pace than workers in the private sector in 2023, the Labor Department said Wednesday.

The employment cost index for employees of state and local governments rose 4.6 percent last year. That was only slightly less than the 4.8 percent gain seen in the previous year.

The index that tracks private sector employment costs rose by a smaller 4.1 percent.

Those figures are not adjusted for inflation. After adjusting for inflation, government employment costs rose 1.3 percent while the private sector’s rose by 0.9 percent.

Wages in the government sector rose 4.7 percent. Private sector wage costs were up by 4.3 percent.

The bigger difference came in the cost of benefits packages. Government benefits rose 4.6 percent while the private sector’s increased by 3.6 percent.

This is a change from last year, when private compensation rose by 5.1 percent in nominal terms (and fell 1.3 percent after adjusting for inflation) while government compensation rose 4.8 percent (and fell 1.5 percent after inflation).

The employment cost index measures the change in compensation per employee hour worked.