PROVIDENCE – “Private-sector wages in Rhode Island are not competitive with New England private sector,” the Rhode Island Public Expenditure Council said Monday.
The nonpartisan public policy research organization released the first of a series of reports on public- and private-sector compensation this week, aiming to “provide additional information and context to the discussion around public sector pay and benefits.”
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The wage and benefit disparities for similar skill sets between private- and public-sector workers in the Ocean State, as well as in relation to New England and the entire country, reveal the need for the state to re-examine its work force development strategies, said RIPEC. Specifically, while looking to maintain public services, the public sector must have wages that are “robust enough” to attract and retain “quality government employees.”
But there are limits, based on taxpayers’ appetite for paying for that talent and “historic revenue declines.”
“Employee compensation … represents one of the largest and fastest-growing government expenditures,” RIPEC said.
The report, including data from the U.S. Bureau of Labor Statistics, finds that the public sector tends to have higher salaries and better coverage for health insurance and pensions than the private sector in Rhode Island – but there are a number of demographic differences that complicate direct salary comparisons.
Some of the demographic differences include education and age. RIPEC found that, overall, the public-sector employees tend to have higher levels of education and are older than those in the private sector.
Public-sector employees in Rhode Island earned $5,244 more than their private-sector counterparts on average. Public-sector workers in Rhode Island out-earned their private-sector counterparts in every age group except those under 25 and between 45 to 54. In Massachusetts, there was “effectively no difference” between the two.
In comparison to New England, Rhode Island public-sector employees received a lower salary than their regional peers at all education levels, with the exception of “some college/associate’s.”
RIPEC said in future studies it will examine whether public-sector workers in Rhode Island experience a “wage penalty” when other factors – education and age – are taken into account.
“While studies have indicated that this is, indeed, the case nationally and regionally, a number of factors in Rhode Island, such as the relatively small gap between public- and private-sector wages by education or age when compared to the U.S. and New England, indicate that the wage penalty may be smaller in the Ocean State,” it said.
It also noted that it is “clear” higher-paid public-sector occupations – such as lawyers or IT professionals – face a “distinct disadvantage” in compensation when compared to their private-sector counterparts.
RIPEC said government should re-evaluate personnel levels and individual jobs to streamline operations, and should initiate staffing models that account for long-term personnel needs.
To see the full, 70-page report, click here.
