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News from EPI Pennsylvania public-sector workers not overcompensated, EPI study finds

For Immediate Release: Tuesday, August 23, 2011
Contact: Phoebe Silag or Karen Conner, 202-775-8810

Pennsylvania public-sector workers not overcompensated, EPI study finds

Apples-to-apples study provides accurate comparison of compensation

A new Economic Policy Institute study released today finds that full-time state and local government employees in Pennsylvania are not overcompensated, when compared to otherwise similar private-sector workers.  Pennsylvania public employees’ hourly compensation costs are a statistically insignificant 2.1 percent lower than that of private-sector employees.

The analysis, Public Versus Private Employee Costs in Pennsylvania: Comparing Apples to Apples, by Labor and Employment Relations Professor Jeffrey Keefe of Rutgers University controls for education, experience, organizational size, gender, race, ethnicity, citizenship and disability. The study uses data collected primarily from a comprehensive database that is updated monthly by the U.S. Census Bureau and Bureau of Labor Statistics, and in accordance with standard survey practice, focuses on year-round, full-time public and private-sector employees.

Major findings of the study include:

  • Pennsylvania public employees earn a statistically-insignificant 2.1% less in hourly compensation than similar private-sector workers. When compared on an annual basis, full-time state and local employees are undercompensated by a statistically-significant 5.4%.
  • Pennsylvania public-sector workers are more highly educated than private-sector workers; 53% of full-time Pennsylvania public-sector workers hold at least a four-year college degree, compared to 32% of full-time private-sector workers.
  • Pennsylvania state and local governments and school districts pay college-educated workers on average 21% less than do private employers.

Pennsylvania public employees—like most other American workers—have in fact been victims of the worst national recession since the Great Depression.  In fact, severe financial problems as a result of the Great Recession have forced state, county and municipal elected officials in Pennsylvania and other states to make large cuts in spending.  As a result, public sector employment has been slashed by 3,400 jobs in Pennsylvania in the last year, with thousands more workers at risk of job loss in the years ahead.

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