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Recent Wage Trends
While public employees made significant gains in the 1980s to close the wage gap between themselves and the private sector, differences in average settlements have evaporated in recent years. The chart below shows the percentage increase in compensation costs for the private and public (state and local government) sector.
| YEAR |
PRIVATE SECTOR INCREASE |
PUBLIC SECTOR INCREASE |
| 1990 |
3.5% |
4.6% |
| 1991 |
3.6% |
3.1% |
| 1992 |
3.1% |
1.9% |
| 1993 |
3.0% |
2.8% |
| 1994 |
2.7% |
3.3% |
| 1995 |
2.4% |
2.9% |
| 1996 |
3.0% |
2.8% |
NOTE: This information is reported for the year ending in March of each year.
For employees covered by collective bargaining agreements, the results were similar.
When these public sector settlements are broken down further, it is clear that the increase in government employee wages has slowed.
| Measure |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
| 1st year change (2)-current settlements |
4.9% |
2.3% |
1.1% |
1.1% |
2.7% |
2.3% |
| 1st year change -replaced settlements |
5.0% |
4.9% |
4.6% |
2.9% |
2.0% |
1.9% |
| Annual change over life of contract (3)- current settlements |
5.0% |
2.8% |
2.1% |
2.1% |
3.0% |
2.7% |
| Annual change over life of contract-replaced settlements |
5.1% |
4.9% |
4.3% |
3.0% |
2.8% |
2.9% |
NOTES:
(1) Mean changes (1) in wage rates in state and local government collective bargaining settlements covering 1,000 workers or more, 1990-1995.
Mean changes include net increases, decreases, and zero changes, but exclude lump-sum payments and potential changes from cost- of-living adjustment clauses.
(2) Changes under settlements reached in the period and effective within 12 months of the contract effective date.
(3) Changes under settlements reached in the period expressed as an average annual rate over the life of the contract.7
7Charles J. Muhl, "Collective Bargaining in State and Local Government, 1994," Monthly Labor Review, p.14
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