Related BLS programs | Related articles
May 1993, Vol. 116, No. 5
Bradley R. Braden and Stephanie L. Hyland
A t first glance, compensation costs between State and local governments and private industry appear vastly different. In March 1992, employer costs for employee compensation (wages paid plus employer-provided benefits) averaged $23.49 per hour worked in State and local governments and $16.14 in private industry-a difference of almost 50 percent. (See table 1.) Such a comparison can be quite misleading, however, as was noted when these data were first released in June 1992.1 In fact, the differences in the cost of compensation in the public and private sectors stem from a number of factors, particularly the large variation in the work activities and occupational structures of the two sectors.
For example, certain activities that are required in government, such as public education and safety, call for a large proportion of white-collar professionals and highly skilled service occupations. In contrast, certain industries such as manufacturing, wholesale trade, and retail trade, are unique to the private sector, and require occupations with comparatively lower compensation costs, such as sales. When certain industries common to both sectors are examined, such as health services, total compensation costs are similar.
About two-thirds of the overall gap in total compensation between public and private sectors was in the wage component; one-third was in benefits. Straight-time wages and salaries were $16.39 per hour worked in government, and $11.58 in private industry; benefit costs averaged $7.09 per hour worked in government and $4.55 in private industry.
This excerpt is from an article published in the May 1993 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.
Read abstract Download full text in PDF (489K)
1 Employment Cost Index, June 1992, USDL 92-471 (Bureau of Labor Statistics, July 1992)
Within Monthly Labor Review Online:
Welcome | Current Issue | Index | Subscribe | Archives
Exit Monthly Labor Review Online:
BLS Home | Publications & Research Papers