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August 2012 Policy Study, Number 12-8

   

Iowa’s Privileged Class: State Government Employees

   

Calculating the Pay Gap

   

 

The Pay Gap is calculated using data provided in the U.S. Department of Labor’s Bureau of Labor Statistics’ annual publication, “Employment and Wages, Annual Averages.”

 

This annual report from the Department of Labor gives the average annual wage of a state-government worker and the average annual wage of a private-sector worker for each of the 50 states and the District of Columbia. Public Interest Institute’s study uses these figures to determine the Pay Gap between the average state-government worker and the average private-sector worker in each state. We then rank the states from highest to lowest Pay Gap. We do not directly compare private-sector wages to state-government wages; rather we compare the differences between the two numbers, and use that to rank the states. We use data from the federal government, and the only calculation we perform is to determine the percentage difference between the two figures. As such, the data is not manipulated or skewed in any way. If anyone disputes the numbers, their dispute is with the U.S. Department of Labor, not the Public Interest Institute.

 

There is typically a lag in the time it takes the federal government to collect and report data. As such, the latest data available as of August 2012 for average wages is from 2010. This is the data Public Interest Institute used for this latest update of our Pay Gap series.

 

For 2010, Iowa’s state-government employees received an average wage that was 150.28 percent of what the average private-sector worker in Iowa was paid. That means that for every $1.00 an average private-sector worker earns in Iowa, an average state-government employee in Iowa earns $1.50. This wage disparity, or Pay Gap, is the highest of any state in the nation. That is, state-government employees in Iowa earned relatively more than private-sector workers in any other state. The 2010 average annual wages for private-sector and state government-sector employees in all 50 states and the District of Columbia, as well as their rankings by the size of the Pay Gap, can be seen in Table 1. Iowa ranks as the number one state, with the largest gap between the average annual wages of state-government employees and the average annual wages of private-sector employees. The Pay Gap of the next-highest state, Rhode Island, is 138.63 percent.

 

TABLE 1

2010 Average Annual Wages in Private and State Government Sectors


   

 

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