Report: R.I.’s public workers out-earn private sector

RHODE ISLAND'S public-sector workers earn more than their New England and national counterparts, according to a new report by the Rhode Island Center for Freedom & Prosperity.
Posted 11/29/12

PROVIDENCE – Rhode Island’s government workers collect higher compensation than their private sector counterparts, according to a study compiled by the Rhode Island Center for Freedom & Prosperity.

The report – “R.I. Public and Private Sector Compensation Comparison: Low-Pay Private Sector Having to Support High Government Compensation” – found that Rhode Island’s public-sector employees enjoy compensation levels 26.5 percent greater than their private-sector counterparts.

According to the report, the state’s public-sector compensation levels are 41 percent greater than the New England average and 78 percent greater than the national average. The Center for Freedom & Prosperity calculated the compensation rates using a statistical regression analysis and controlling for factors such as education and experience.

On average, Rhode Island’s government workers receive 58 percent more in benefits than the state’s private workers, said the report, which went on to say that within the New England region, Rhode Island’s public employees were “unique in collecting a higher ‘base’ pay than private employees, work fewer total hours, receive a higher paid time off value than in the private sector and benefit from a 41 percent higher total compensation premium than the regional average.”

“Rhode Islanders want a government that works for all citizens. But it may not be so much that state and municipal employees are grossly overpaid, but more that our state’s private sector has such shockingly low compensation levels,” Mike Stenhouse, CEO for the Center, said in a release.

“This is yet another clear indication of how public policy in the Ocean State has favored certain groups while severely harming our economy and our business sector,” added Stenhouse.

The study - conducted by Miami University economist William Even and Trinity University economist David Macpherson – said that on average, Rhode Island’s government workers collect $100,217 in total compensation compared with $83,419 for private-sector employees.

The report broke out base pay to $61,046 versus $58,664 with benefits at $39,171 and $24,755 for public- and private-sector workers, respectively.

According to Stenhouse, the data “raises serious questions about the sustainability of a system where a low-pay private sector is supporting a high-pay public sector.”

“Are we heading towards a Central Falls type situation where pension benefits have to be cut dramatically, or even worse, a Scranton, Pa., situation where city worker pay was cut to minimum wage?” said Stenhouse. “It is evident that new policies that promote economic growth and increase our tax base are the best way to ensure that we can afford to maintain current public employee compensation levels.”

To view the full report from the Rhode Island Center for Freedom & Prosperity, visit:

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