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Illinois Study: Public Employees Earn Nearly 29 Percent More Than Private Sector Employees

...and some costs are getting passed along to taxpayers.

A new study out by the Illinois Policy Institute (IPI) reveals public employees in the state may actually earn more than those in the private sector. Up to 23 percent more, in fact.

IPI states:

  • Compensation per state government employee averaged $69,500, which is 23 percent more than the private sector worker average of $56,500. Much of the difference was in employer-paid benefits, which were more than 1.5 times that of private employees. State employees received 16 percent more in wages and salaries than private employees.
  • Compensation per local government employee averaged $63,100, which is 12 percent more than the private sector worker average of $56,500. Much of the difference was in employer-paid benefits, which were more than 1.5 times that of private employees. Local government employees received 4 percent more in wages and salaries than private employees.
  • Compensation Per Hour Worked: The gap between state and private employee compensation is greater per hour worked. The more generous state government paid time off policies raise the state government employee compensation advantage to 28.8 percent over private employees.

According to IPI, however, the above data may "understate" a difference between government and private employee compensation in the state. IPI's executive summary also alleges llinois State has "underpaid" its annual pension and retiree health care obligations "for some time." The deficits, according to IPI, amounted to $2 billion in 2008 and have yet to be paid.

IPI also asserts if the state had made the payments "on time," state employee compensation would be even higher. IPI then adds that the cost of these unpaid debts has been passed along to Illinois taxpayers:

    • There also is evidence of underpayment of annual pension and retiree health care obligations in local governments, though the extent of underfunding is undetermined.

    Further, the cost to taxpayers has been increased by the failure to make on-time payments, because of the obligation to pay interest on deficient balances (interest that would otherwise be earned by the funds). However, this is not a cost of employee compensation, but rather results from the state’s financial management difficulties.

IPI provides a video summarizing the study:

One last thing…
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