Public and private workers earn about equal compensation when salaries, benefits and work hours are taken into account, study says
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New Jersey's public workers hold a rally protesting state budget cuts in this May 2010 photo.TRENTON — As the debates rage in Trenton about how to balance the state budget and keep property tax growth at bay, a new study challenges the argument that public worker pay and benefits are the main problem.
Factoring in salaries, benefits and hours worked, New Jersey public workers’ compensation is about equal to private sector workers, according to Jeffrey H. Keefe, a professor at the Rutgers University School of Management and Labor Relations.
“Public-sector workers’ compensation is neither the cause, nor can it be the solution to the state’s financial problems,” wrote Keefe in the report, released Friday by Economic Policy Institute, non-partisan think tank. Some of its findings were discussed in a May symposium at Rutgers.
The report, which includes only full-time workers, comes as the state Legislature considers a sweeping package of bills proposed by Gov. Chris Christie to help towns meet the 2 percent property tax cap signed into law this month. The bills would limit raises and allow towns to opt out of civil service.
Christie’s tough talk against public worker unions — in April, he said residents believe there are “two classes of people in New Jersey: Public employees who receive rich benefits, and those who pay for them” — has won him attention and conservative plaudits. His office Friday criticized the report, which also challenged a February Star-Ledger editorial calling for wage freezes.
The report concluded New Jersey’s public sector workers, both for state and local governments, make an average of $56,694 annually, while private sector workers make $61,252. But public workers have more generous health and retirement benefits and work fewer hours, which evens out their total compensation, it says.
Health insurance costs represent 11.4 percent of what public employers pay for each worker, compared to 7.4 percent for private employers. Public employers pay more than twice as much in retirement benefits than private companies, the report says.
It notes the average salary for a public worker without a high school diploma is $41,000, and $25,238 for a private sector worker. Private sector workers with bachelors degrees earn $80,911 on average versus $56,641 for public workers.
Christie spokesman Kevin Roberts said the report should have included part-time public workers who have full health benefits (new part-timers hired after May 10 do not). He said salaries and benefits are responsible for three-quarters of the 69 percent jump in local government spending over the last decade.
“The fact that public worker benefits are out of proportion with the private sector in New Jersey is just not disputable,” he said.
New Jersey Taxpayers’ Association President Jerry Cantrell said the total cost of public workers remains a problem partly because more kept their jobs. “Private sector jobs have been consolidated to a great degree as a result of the global meltdown while the public sector has been, for the most part, unaffected,” he said.
Union officials said they felt vindicated. “We have always said that it was untrue, these accusations over the last several years, that we make way more than people in the private sector,” said Bob Master, Communications Workers of America District 1 Political Director.
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