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February, 1987, Vol. 110, No. 2
State and local government pay increases
outpace five-year rise in private industry
Pay increases for workers in State and local government, as measured by the Bureau's Employment Cost Index, have exceeded those for workers in the private sector over the 5 years for which comparable data are available from the ECI. During the June 1981-86 period, wages and salaries increased by 36 percent in State and local governments, while pay in the private sector increased 27.9 percent.
Much of the difference in the size of wage changes between the two sectors can be explained by differences in the industrial and occupational composition of their work forces. The industrial and occupational groups which had the largest pay gains accounted for a higher proportion of employment in State and local government than in the private sector.
Over the last 11 years, however, pay probably increased by about the same percentage in the two sectors. During the 1981-86 period, wage changes in State and local government were very similar to those of the service industry in the private sector. If this relationship in rates of pay change held in the 1975-81 period, and there is evidence to suggest that it did, then during that earlier period pay gains in private industry led those in State and local government by about the same percentage as they lagged them during 1981-86. That is, by 1986 the relative rates of pay in the two sectors were about what they were in 1975.
This excerpt is from an article published in the February 1987 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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