Government pays bureaucrats 32% more than private-sector workers earn
Fisher Investment Founder Ken Fisher discusses why the national debt isn't a serious concern.
It’s a spending bonanza for state and local governments.
Data shows they spend 32% more on their employees than private-sector firms.
That’s according to June data from the Department of Labor that was released in September.
The private sector spends $34.44 per hour on employees, with $24.14 going toward their wages and salaries. State and local governments, on the other hand, spend $50.78, and $31.58 goes toward pay.
What explains the disparity? Government workers tend to be higher-skilled employees who require higher education, according to Rachel Greszler, research fellow in economics, budget and entitlements with the Heritage Foundation. Union contracts and tax-raising politicians also contribute, Greszler said.
"Unions are driving a lot of the difference, and they are able to drive it, because unlike the private sector, the government doesn’t face a bottom line," she told FOX Business. "Policymakers can just raise taxes to cover higher costs. They can also make pension promises up front and not have to pay until decades later."
Illinois, for example, is in the middle of a pension crisis that is crushing its state budget. The state had an unfunded pension liability of $129 billion as of February 2018.
"Unlike the private sector, the government doesn’t face a bottom line."
Government workers get about twice the amount of benefits -- such as paid leave, health insurance and retirement savings -- as private-sector workers, based on Department of Labor data.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Much of the difference in benefits comes from retirement savings. The government spends $6.04 per hour contributing to employees’ retirement, while the private sector spends $1.31.
"Government benefits are far more generous than private-sector benefits," Greszler told FOX Business, noting how government jobs tend to include pensions and 401(k) retirement accounts.
The government also tends to spend twice what the private sector does on health insurance for its workers --- $5.89 per hour versus $2.60 per hour.
CLICK HERE TO READ MORE ON FOX BUSINESS
Bureaucracy at Work is the story of how the government wastes your money and micromanages your life.