Tuesday, 20 April 2010

California Government Staffing and Salaries

The California Budget Project (CBP) recently released a report on government employees in California, “Professors and Prison Guards”. I found it interesting and informative, the facts are correct. Their finding that corrections employment is growing rapidly are important.

In general, the CBP points out that government employee ratios in California are about 10% lower than the rest of the US, and that the California tax burden is near other states as a % of personal income. However, they don’t provide any useful information on employee compensation, so it is an incomplete and slightly deceptive treatment of this important topic.

Here is the data for 2008 from the Quarterly Census of Employment and Wages (avg. weekly wage, note if you took CA out of the US averages the gaps would be even higher)

Private Workers:
California $975, US $873, +11.6%.

State Government Workers:
CA $1,131, US $923, +22.5% (Education +18.4%, Non-education +25.6%)

Local Government Workers:
CA $1,030, US $813, +26.7% (Education +14%, Non-education +44.5%)

If the government workforce was increased by 10% to bring the ratios up to the US average, and government salaries lowered by an average of 10%, total government employee costs would be about the same. Government workers in California would still enjoy wage premiums equal to or above the private sector.

If you break down the government payrolls, you see that the premium for education workers is smaller than other government workers. A very large share of local, non-education salaries are public safety. Also, it is important to note that this data does not include employer pension contributions.

Perhaps we should consider shifting to a system of more, lower paid government employees over fewer, higher paid employees. With more employees, we might be able to reduce permit processing times, more cops on the streets, smaller classes, etc.

I understand that this issue is very complicated in practice. Whether and to what extent current public labor negotiations around the state utilize layoffs, furloughs, and compensation decreases is very important to the state’s long-run cost of government and competitiveness, as well as the level of government services we enjoy as citizens.

About the Author

Ethan Jacob

Author & Editor

I am Ethan Jacob Executive Director of the Center for Business and Policy Research at the University of the Pacific, where I have a joint faculty appointment in the Eberhardt School of Business and the Public Policy Program in the McGeorge School of Law..

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