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Government Salaries 35% Higher than Private Industry in 2012


The U.S. Bureau of Labor Statistics released their employment cost index for the 2012 year on January 31st, 2013.  It included both annual data and information on salary costs for the last quarter for Civilian workers which is composed of two major sectors i.e. Private Industry Workers and State and Local Government Workers. Seasonally adjusted compensation costs for civilian workers for the 3-month period ending December 2012,  increased 0.5%. Wages and salaries (which make up about 70% of compensation costs) increased 0.3%, and benefits (which make up the remaining 30% of compensation) increased 0.6%.

US compensation costs 2012

Annual Compensation Costs

For the period of January through December 2012, compensation costs for civilian workers increased 1.9% compared to a 2% increase during 2011. Of the 2012 increase salaries increased 1.7 % and benefits increased 2.5%. Total compensation costs for private industry workers (as opposed to Civilian Government workers) increased 1.9 % over the year. Wages and salaries increased 1.7 % for the current 12-month period, while benefits increased 2.2% for the 12-month period ending December 2012.

The  leisure and hospitality industry had the smallest growth at 1.1%  and the information technology industry had the largest gain at 3.9%. Natural resources, construction, and  maintenance occupations; production, transportation, and material moving occupations saw a 1.7% increase while management, professional, sales and office occupations had a 2% increase.


Average Salaries

The total cost employers paid for employee compensation averaged $30.80 per hour worked in September 2012, but that doesn’t mean that employees actually received all of that. Wages and salaries averaged $21.32 per hour worked and accounted for 69.2 percent of these costs, while benefits averaged $9.48 and accounted for the remaining 30.8 percent.  Total employer compensation costs for private industry workers averaged $28.95 per hour worked in September 2012 while State and local government employers spent 35% more at an average of $41.56 per hour worked. State workers salaries alone were almost equal to the entire package cost for private industy since government wages and salaries averaged $26.91 per hour and accounted for 64.7 % of compensation costs, while benefits averaged $14.65 per hour worked and accounted for the remaining 35.3%.

Private vs Government Salaries

State and Local Government Workers

Compensation costs for state and local government workers increased 1.9% for the 12-month period ending December 2012, higher than the December 2011 increase of 1.3%. Wages and salaries increased 1.1% while benefits increased 3.4% in December 2012, up from 2.1% in December 2011.  Amazingly half of all state and local government employees are management, professional, and related  occupations, which sounds like a bad joke, “They need one person to do the job while one supervises”. Total compensation costs for Management averaged $50.43 per hour worked in September.  Average hourly salaries were $28.97 for office and administrative support occupations plus insurance benefits were $5.02 per hour, retirement and savings benefits were $3.68 per hour, paid leave benefit costs which  include vacation, holiday, sick leave, and personal leave were $3.06 per hour and benefits, including Social Security, Medicare, unemployment insurance and workers’ compensation, averaged $2.54 per hour for a total of $43.27 for an administrative support person.

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Source: BLS Employer Costs for Employee Compensation December 11 news release
BLS Employment Cost Index January 31 news release

About Tim McMahon

Work by editor and author, Tim McMahon, has been featured in Bloomberg, CBS News, Wall Street Journal, Christian Science Monitor, Forbes, Washington Post, Drudge Report, The Atlantic, Business Insider, American Thinker, Lew Rockwell, Huffington Post, Rolling Stone, Oakland Press, Free Republic, Education World, Realty Trac, Reason, Coin News, and Council for Economic Education. Connect with Tim on Google+