For State Workers, a Thaw in Frozen Wages
Government workers across the U.S. are expected to get raises this year, many of them for the first time since the Great Recession spurred states to freeze wages, furlough employees and slash workforces.
An exact accounting of how many states are considering increasing pay — and by how much— is difficult to come by. But those who follow state worker pay, including advocates on the left and right, say workers this year will get a boost in many states, including some controlled by Republicans.
The most recent U.S. Labor Department report on wages and salaries for state and local government workers found pay increased 1.2 percent from March 2013 to March 2014, compared to 1 percent the previous year. More than 40,000 government jobs have been added so far this year.
“There are states that are looking to boost pay after years of furloughs and actual pay decreases,” said Leslie Scott of the National Association of State Personnel Executives. “Most of the time it's very modest increases, but nonetheless it's an increase.”
One red state that's part of the trend is North Carolina, where Republican Gov. Pat McCrory earlier this year announced pay raises for more than 3,200 state employees in especially “high-demand” professions such as health care and information technology.
The pay increases in North Carolina could approach 10 percent for those workers. But overall, state salaries are up only 1.2 percent since 2008. Going forward, a 3 percent across-the-board increase is a top priority for the State Employee Association of North Carolina in the session that begins this month. This week, McCrory proposed an average 2 percent pay increase for all teachers and state workers. The state employs about 90,000 people.
In Louisiana, meanwhile, Republican Gov. Bobby Jindal has proposed spending $60 million on so-called “performance adjustments” for qualifying workers based on their annual reviews, an announcement his office paired with an analysis showing a nearly 33 percent decrease in full-time state government workers from 2007 to 2013. Lawmakers in Louisiana still have to approve the plan, but if they sign off on it, workers could see larger paychecks as early as July. A similar proposal last year didn't provide state funds for raises, but allowed agencies to move available funds around to pay for them.
But state worker advocates and labor activists note that the expected raises are not enough to make up for years of cuts. And, they say, in some states salaries over the years have failed to keep pace with the private sector, making it difficult for states to attract and retain skilled employees.
“Obviously things are better than they've been,” said Steve Kreisberg, AFSCME's director of collective bargaining in Washington. “But frankly we're not seeing any great relief. We're seeing an end to the more austere measures.”
In many cases — especially in states with long-term labor contracts such as California, Michigan and Pennsylvania — increases that were negotiated alongside pay freezes during the recession began taking effect last year, and will continue this year. Yet Kreisberg said even those increases were “fairly lean by historic standards.” Often, the pay increases were just a percentage point or two.
And in states like Nebraska, Ohio and Washington, workers and policymakers will soon return to the bargaining table, where pay increases are expected to dominate negotiations.
Even in states like Minnesota, where legislators approved a raise for state workers last year, concerns remain about limits on upper-level salaries, which workers say can effectively tamp down pay across the board. And in general, workers also saw cuts recently to health insurance and other benefits that ate into their take-home pay. In some cases, even recent increases won't make up the difference in terms of total compensation.
“Five years of austerity is very significant for any worker,” Kreisberg said.
In conservative Mississippi, lawmakers this year approved the first raise for any state workers in at least four years. Mississippi employees, who earn an average salary of just $34,500 a year, pushed for an across-the-board increase during this year's legislative session, only to nearly lose out on any raise at all as lawmakers neared agreement on a final budget.
“We hardly ever get a flat-out pay-raise bill passed,” said Brenda Scott, president of the Mississippi Alliance of State Employees. “There's no appreciation for our public workers here. We've really been up against it down here.”
Ultimately, improving tax revenues and a replenished rainy day fund led Mississippi lawmakers to approve $1,000 pay increases for the roughly 4,000 lowest-paid state workers who hadn't benefitted from any kind of step or promotional wage adjustment in the last four years. They also removed a restriction on agencies giving raises with any excess funds in their budget.
Lawmakers saw it as a step forward. “You're trying to keep good people,” said Sen. Eugene Clarke, the Republican chairman of the Appropriations Committee. “You're competing to keep your top-notch people in place.”
Workers had a different take, even if the outcome was better than nothing.
“What they did is they threw a bone to some of the state workers,” said the union's Scott.
Competing with the Private Sector
The need to compete with the private sector is driving public pay increases in many states. As the economy recovers, there are growing worries about retaining high-skilled workers and attracting young talent. Even conservatives who favor smaller government recognize that sometimes spending more on pay is warranted.
“We don't think you ought to have to take a vow of poverty to work for the government,” said James Sherk of the conservative Heritage Foundation. “In those areas where you do see the shortages, in many cases math teachers, the solution would be changing your pay policy so you can address those needs.”
Yet that dynamic can vary wildly state by state, making it a challenge to compare across state lines. A study from the American Enterprise Institute found that in most states, public workers get higher total compensation, including benefits, than comparable private sector workers do. However, public sector salaries lag behind those in the private sector in nearly every state. Job security, meanwhile, is generally better in the public sector, the study found.
Overall, the study found that differences between public and private sector pay vary widely from state to state. In a handful of states, public workers see a premium of more than 20 percent in total compensation compared to the private sector. In more than a dozen others, though, compensation is at or even below what's considered “market level.”
The result has been a patchwork of economic realities for public employees, determined in large part by the political orientation of their states.
In Minnesota for example, workers saw no pay increases from 2009 to 2012. But the Democrats' seizure of the governor's office in 2010 and the legislature in 2012 changed the calculus. A new contract approved last year delivered a 2 percent pay increase for January 2013 through June 2013, a 3 percent increase for the current fiscal year, with another 3 percent increase that will take effect in July.
“You reach a point where your sacrifice is rewarded when the economy turns around,” said Richard Kolodziejski of the Minnesota Association of Professional Employees, one of the state's public workers' unions.
That's a common sentiment among union leaders. The difference this year is that even some Republicans agree.
“There's going to be a natural inclination, even if you're a Republican and not politically aligned with a union, to give pay increases,” said Andrew Biggs, a co-author on the American Enterprise Institute study and a former political appointee at the Bush administration's Social Security Administration. “You just have some money lying around, and the employees are asking for it. I'm just not sure that's the best use of it.”
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