As the legislative battle rages on across the state border in Wisconsin over public workers’ bargaining rights, a new report from the Economic Policy Institute (EPI) shows Minnesota public employees earn on average nearly eight percent less than their private sector counterparts. Minnesota public workers also tend to be more educated, with sixty percent holding at least a bachelor’s degree, compared to 37 percent of private sector workers.
Report author Jeffrey Keefe, who is an associate professor at the School of Management and Labor Relations of Rutgers University, says public employees may have better health and retirement benefits, but they pay for it through lower wages, and more-educated public workers see an even bigger pay gap.
“So even when we take into account total compensation, the average college graduate with a bachelor’s degree earns 25 percent less in the public sector than they do in the private sector.”
Keefe says a highly educated work force is needed to do very specialized jobs in the public sector, including teachers, social workers, criminal investigators, scientists and engineers.
“Efforts to balance the budget simply by cutting employee benefits or pay are going to have some long-term consequences in terms of being able to recruit people for careers in the public sector.”
He adds that job security and benefits offered through the teaching profession were a traditional lure for college students that has been less attractive in recent years as pay freezes and staffing cuts have become more commonplace.
The report also found that public employees without a college degree earn slightly more than private sector employees. However, Keefe says, over the last 30 years many of those lower-skilled jobs have been increasingly turned over to private sector contracts, primarily in the areas of janitorial and food service.
The EPI study is based on data from the U.S. Census Bureau and the Bureau of Labor Statistics.
The report is at www.epi.org