Conventional wisdom suggests that state jobs don’t pay as well as those in the private sector, but that the non-wage benefits are superior. A recent article in the June 2011 "Business NH Magazine" by the Center’s economist, Dennis Delay, examined the data and found that New Hampshire state employees, on average, are paid about the same as private sector employees, excluding non-wage benefits like health insurance and pensions. But those averages don’t necessarily tell the whole story. There are big differences between the paychecks earned by private and state sector workers is several fields, depending on the type of work. And the figures don’t necessarily account for differences in education and experience between private and public sector workers in the same field.
But the differences in hourly wages can vary greatly, depending on the job. For instance, the average private worker in a management position in New Hampshire earns $51.95 per hour (not including benefits), while comparable managers in state government make $35.08. Those in private practice in legal occupations and healthcare occupations also fare better than state workers in comparable positions.
On the other hand, some public sector jobs paid more than their counterparts in private industry. Community and social service workers employed by the State of New Hampshire, for instance, make $22.19 per hour, 25 percent more than comparable private sector wages of $17.56 per hour. Education, training, and library occupations and protective service jobs (like police and fire) within state government are also paid better than those in the private sector.
It can be difficult to explain these differences between public and private employee pay, because there are many underlying differences between the two groups. Economists Jeffrey Thompson and John Schmitt point out that government work tends to be highly skilled, and say it is misleading to compare the groups as a whole. Public employees are also more likely to be unionized, which could translate into better pay. According to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, state and local workers voluntarily quit at a lower rate than private sector workers.
Where state employees have a clear advantage is in health care coverage, a guaranteed pension and access to retirement health insurance -- benefits that have been disappearing from the private sector. According to the Bureau of Economic Analysis, non-wage compensation per state government worker was $11,979 annually, compared to $6,935 for the average private sector employee. What’s more, non-wage compensation for state employees increased 63 percent from 2001 to 2009, while non-wage compensation rose only 34 percent in the private sector.