Keeping Ahead of the Joneses

Adrian Moore from the February 1998 issue

If you wonder why the government has such a hard time cutting spending, take a look at the new car in the driveway of the bureaucrat down the street. While private sector workers have seen their average annual earnings grow slowly but steadily over the past two decades, pay for government workers has skyrocketed. Economist Wendell Cox has discovered that since 1980, for every inflation-adjusted dollar of extra compensation (wages and benefits) the average private sector employee has earned, the average state and local government employee has received an extra $3.00. Over that same period, the average federal employee has taken home five times more in additional compensation than his private sector counterpart.

The average state and local government worker now earns over 30 percent more than the average private sector worker, while the average federal nonmilitary employee earns 50 percent more. Government employees have achieved these spectacular pay increases without much public notice. But that may change as unions and other organizations that represent government workers lobby to maintain their inflated salaries by leading the fight against privatization and the regulatory reforms necessary to make budget cuts. Cox's full analysis, derived from Department of Commerce and Bureau of Economic Analysis data, is available on the Web at The Labor Market Reporter, www.publicpurpose.com.

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