What a Surprise: During The Recession Public Sector Wages Grew Faster Than Private Sector Ones

During recessions, people lose their jobs,see their salaries reduced or frozen and find that life is harder than it used to be. Well, that’s if you work for the private sector. As I am mentioned here, since the beginning of the recession, the private sector have lost many jobs while the public sector managed to gain some. Also, data shows federal workers earned more money for occupations that exist both in government and the private sector, and that’s before the value of health, pension and other benefits are included to the value of the compensation.

Today, I look at the increase in compensation during the recession between the private and the public sector. This chart above compares percent changes in public and private worker compensation within each of the five largest sectors in the United States during the 12 months ending March 2010. Compensation includes health and retirement benefits (roughly 30% of compensation), salary (roughly 70% of compensation), and legally required benefits such as payments for Social Security and Medicare. The sectors examined here employ over 65 million workers, or nearly half of all employed Americans. These sectors are (in order from largest to smallest by total employment): Office and Administrative Support, Sales, Food Preparation and Service, Production, and Transportation and Material Moving.

Across the sectors examined, compensation costs in the private sector increased 1.78% from March 2009 to March 2010. Public sector compensation increased by 8% more than its private counterpart at a level of 1.92%.

Importantly these compensation increases occur on top of the existing public sector wage differential. According to the Bureau of Labor Statistics‘ most recent estimate, as of September 2009, the average public sector worker received $29.40 in hourly compensation while the average private sector worker received $27.49 in total compensation, or $1.91 less.

That’s even more reasons to tell your kids that being a doctor, a fireman, a princess or a spy when they grow up is a bad idea. A bureaucrat is was they want to be. That’s if they can’t work for the Union industry of course.