Public sector out-earning the private again
June 12, 2008 · Updated 4:18 PM
The Bureau of Economic Analysis at the U.S. Department of Commerce has once again released wage information that shows a stark contrast between government employees and the private sector.
For several years now, the average wage for a government employee topped that of a private-sector employee in Washington state.
The just-released data from 2005 indicates the average individual salary for a public-sector worker in Washington was $48,067, while private-sector workers made an average of $30,856 a difference of $17,211.
King County, home of larger industries such as Microsoft and Boeing, is the only county to have slightly higher private-sector earnings. The private sector earnings there were an average $649 more overall than the public sector ($59,048 vs. $58,399).
The figures in question are averages of all industries. The public-sector figures include federal, state, and local government wages.
The information is meant to give an indication of the disparity between the two sectors, not provide a comprehensive comparison of wage rates of specific positions between the sectors.
Unlike the private sector, the public sector operates according to a set of rules that does not include competition, efficiency, or scarcity. Government lacks competition. If more competition through competitive contracting was encouraged among government agencies, taxpayers might begin to see greater returns on their money.
Inefficiencies plague government-run systems. Unlike a private business that has limited resources to cover its costs, government can increase its resources by raising taxes. Paying an inefficient bureaucracy with taxpayer money is generally easier than fixing the problems of inefficiency.
Finally, public-sector labor unions now collectively bargain for higher wages for state and local government workers. Unions represent 60.2 percent of government workers in Washington, compared to 13.2 percent in private industries.
Since government does not need to adjust quickly to changes in market forces and can coercively increase its income through tax increases, unions have found the public sector to have deeper pockets than the private sector.
These figures serve as a reminder of the continuing wage inequities between public and private economic spheres. Because government is insulated from certain market pressures, including competition, insufficient income and labor pressure, it has the ability to create and sustain these wage gaps between its workers and those in the private sector.
Policymakers should spend government funds efficiently and set performance measures for agencies and employees.
Paying a public employee to do the equivalent of a private-sector job simply siphons money away from taxpayers and fails to grow the overall economy.