As the state considers restoring bargaining rights to public-sector workers, new EPI research by economist Monique Morrissey finds that Virginia’s public-sector workforce is undercompensated relative to their private-sector counterparts. Although a majority of public-sector workers in Virginia have bachelor’s or advanced degrees, they earn less, on average, than private-sector workers, most of whom do not have college degrees. Taking into account education, experience, hours worked and other factors, public-sector workers earn 18.3%–20.8% less than their private-sector counterparts. Although factoring in benefits narrows the gap, total compensation is 11.7%–14.4% lower for public-sector workers than for their private-sector counterparts in Virginia.
“While public-sector workers in the United States tend to be paid less than private-sector workers with similar educational attainment and years of experience, state and local government employees in Virginia are underpaid even by public-sector standards,” said Morrissey. “In Virginia, both college-educated and non-college-educated public-sector workers face a disadvantage, even after controlling for factors that could explain the gap. Low wages and less-generous benefits could hinder the state’s ability to attract and retain the skilled and reliable workforce it needs for critical public service jobs.”
The public-sector workforce in Virginia is majority women (57.5%), in contrast to the private-sector (41.8%), and the share of black workers is higher than in the private-sector (20.9% versus 17.9%). Public-sector workers without a bachelor’s degree earn $42,224, on average, compared to $44,275 earned by their private-sector counterparts. The earnings gap is much larger for workers with bachelor’s degrees or more education who earn $64,343 on average, while their private-sector counterparts earn $101,876 on average.
Morrissey notes that her analysis is restricted to full-time, full-year workers and based on annual earnings from all jobs, which excludes nearly half of public school teachers from the sample. Previous EPI research, however, found that teachers in Virginia face a 31.3% weekly pay penalty compared to college graduates in their state—the third-highest in the country.