By Elizabeth K. Kellar
Orlando Sentinel
2/14/08

To explain the differences in public and private sector compensation, it’s important to dig beneath the surface.

The Orlando Sentinel’s editorial on Sunday, “Fattening Up: Local and State Governments Are Overly Generous to Employees,” acknowledges that lawyers make more in the private sector than in the public sector, but does not examine other positions. What about engineers, finance directors, laboratory technicians, public-works directors and local government managers?

When we turn on our water faucets, we want potable water. We want our bridges and buildings to be built and inspected by people who know what they are doing. Good planning is important to us, and we want to have viable employment centers, transportation systems that get us to our destinations safely and without delay, and attractive communities in which to live. If there is a hurricane or public-health emergency, we expect our public sector workforce to be ready for it, make whatever personal sacrifices are required, and to respond intelligently and quickly.

Many of these jobs require specialized education and training. According to 2006 Census data, 68 percent of state and local government employees are classified as knowledge workers — compared with only 32 percent in the private sector.

The public sector workforce is older than the private sector’s: 63.5 percent of local government workers and 60 percent of state government workers are over 40 years of age, compared with 48 percent of private sector workers. This means that state and local governments are facing their greatest turnover ever, especially among their most educated, trained and skilled employees.

Public health is one example of a critically important profession that is already strained. The federal Centers for Disease Control and Prevention estimates that states need 47 percent more epidemiologists than they presently have. Yet how do salaries compare with the private sector? According to 2005 Department of Labor data, these professionals earned only $55,806 in state and local government jobs compared with $67,314 in the private sector.

Most people choose to work in the public sector because they want to make a contribution to society, not because it is more lucrative. But the public sector must still remain competitive to attract the talent our communities count on for daily needs, let alone in a crisis.

In today’s world, all employers are challenged to find ways to provide health care and other benefits while containing costs. Innovative state and local governments strive to provide health insurance that is both affordable and meets family needs. Wellness programs, for example, are starting to pay off for many government employers as a way to keep employees healthy and to reduce costs.

As to retirement plans, a study conducted for the Center for State and Local Government Excellence by the Center for Retirement Research at Boston College in November found that defined benefit plans are 80 percent to 90 percent funded in both the public and private sectors. But it is impossible to compare retirement benefits unless you take into account key differences — public-sector employees, for example, contribute to their pensions, unlike their private-sector counterparts.

Taxpayers want well-managed services, prudent budgets, and accurate and timely financial reporting. We take for granted that competent, well-prepared individuals will be there when we need them. As even more of the public-sector workforce becomes eligible to retire in the next five to 10 years, states and localities will need to sharpen their employment practices and offer good benefits to remain competitive.

Elizabeth K. Kellar is executive director of the Center for State and Local Government Excellence in Washington, D.C.