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Fact check: Connecticut public vs. private sector employee compensation
Connecticut state capitol
November 21, 2017
By Sara Reynolds
In a column in September about Connecticut’s budget woes, Matt Walter, executive director of the State Government Leadership Foundation, urged the governor to endorse changes to state-employee union benefits. According to Walter, "Connecticut is extremely generous with its employees, who earn 42 percent more on average than the average private-sector worker in the state — the highest disparity in the country."[1]
Is Walter correct? Do Connecticut state employees earn 42 percent more, on average, than private-sector workers in the state? Is that the highest disparity in the country?
According to Walter’s spokesman, his claim is based on a 2014 report by the American Enterprise Institute (AEI). The AEI reported that total compensation for an average Connecticut state employee was 42 percent higher than that of similarly-skilled private-sector workers, the highest disparity in the country.[2][3]
Similarly, data from the Bureau of Economic Analysis shows that, on average, total state employee compensation was 48.6 percent higher than average private sector compensation in Connecticut in 2016. However, the average total compensation differential by state ranged from a 24.1 percent low (Indiana) to a 72.1 percent high (Alaska). Connecticut's differential was effectively the median (48.3 percent).[4][5]
Background
Walter is the president of the Republican State Leadership Committee, which focuses on electing Republicans to state offices.[6][7] His commentary was published in the National Review on September 21.[1]
Gov. Dannel Malloy and the Connecticut General Assembly did not pass a budget during the 2017 legislative session, which ended June 7. According to the Connecticut Mirror, Democrats and Republicans clashed over wage and benefit concessions from state employees to help close a $5.1 billion budget shortfall.[8]
The legislature in September did pass a budget bill that required state employees to contribute more to their retirement fund, changed the retirement benefits formula, and limited state contracts on healthcare, retirement, and welfare to four years, effective June 2027.[9][10]
Malloy vetoed the bill, stating, "This budget does not balance, risks potential litigation, and undermines our fiscal stability, educational system, and economic development efforts."[11]
A biennial budget for FY 2018 and 2019 was passed by the General Assembly on October 26 (by 126 to 23 in the House, and 33 to 3 in the Senate).[12] The governor signed the bill on October 31.[13]
The budget totals $41.2 billion over two years. The state's Office of Policy and Management (OPM) estimated a budget deficit of $202.8 million in fiscal year 2018.[14][15] Among other things, the budget requires the governor’s policy staff to calculate the future costs and benefit levels of the state employees’ retirement system and authorizes a commission to study how to maximize capital assets for the pension system.[16][17]
AEI report
The AEI report cited by Walter’s spokesman compared state employee compensation with that of similarly skilled private-sector workers in all states.[2][18][19] The researchers examined wages and benefits (including pensions, health care, paid time off, and employer contributions to Social Security, Medicare, and worker's compensation, among others). They also considered the value of job security and working conditions as forms of compensation. They used data from the U.S. Census Bureau, the Bureau of Labor Statistics, the National Conference of State Legislatures, and state-specific sources, ranging from 2009 to 2012.[2]
The AEI study found that average salaries for Connecticut state employees were 2 percent higher than comparable jobs in the private-sector.[2]
The value of benefits packages varied significantly—by 40 percent—between the two sectors, so the average total compensation received by Connecticut state employees was 42 percent higher than total compensation received by the average private-sector worker in the state. This disparity was the largest in the country.[2][20]
Bureau of Economic Analysis
Among its many functions, the Bureau of Economic Analysis (BEA) tracks employee compensation, defined as:[21]
| “ | The total remuneration, both monetary and in kind, payable by employers to employees in return for their work during the period. It consists of wages and salaries and of supplements to wages and salaries.[22] | ” |
According to the BEA, the average compensation for Connecticut state government employees in 2016 was $93,255, 48.6 percent higher than the average private sector compensation, $56,798. The median difference in average compensation was 48.3 percent.[4][5][23]
Based on the BEA data, Alaska had the highest differential in average compensation, at 72.1 percent (state government workers received, on average, compensation of $105,759 compared to $49,729 earned by private sector workers, on average). Indiana had the lowest differential at 24.1 percent (state government workers received $56,915 in average compensation compared to $44,670 received by private-sector workers).[4][5]
Conclusion
In a recent commentary, Matt Walter, executive director of the State Government Leadership Foundation, criticized Connecticut’s compensation of state employees, and claimed: "Connecticut is extremely generous with its employees, who earn 42 percent more on average than the average private-sector worker in the state — the highest disparity in the country."[1]
The claim was based on a 2014 American Enterprise Institute report which found that average Connecticut state employee compensation was 42 percent more than that of private-sector workers, the highest disparity in the country.[2]
The AEI findings were similar to data from the Bureau of Economic Analysis, which indicated that Connecticut state employee compensation was 48.6 percent higher than average private sector compensation in 2016. However, the compensation differential for all states ranged from a low of 24.1 percent to a high of 72.1 percent, with a 48.3 percent median.[4][5]
See also
- State budget conflicts, 2017
- Connecticut state budget and finances
- Historical Connecticut budget and finance information
- Public pensions in Connecticut
Sources and Notes
- ↑ 1.0 1.1 1.2 The National Review, "In Connecticut, Governor Malloy Should Sign the Bipartisan Budget," September 21, 2017
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 American Enterprise Institute, "Overpaid or underpaid? A State-by-State Ranking of Public-Employee Compensation," April 2014
- ↑ Sara Reynolds, "Email communication with Charlie Hoffmann, communications assistant, Republican State Leadership Committee," October 18, 2017
- ↑ 4.0 4.1 4.2 4.3 United States Department of Commerce Bureau of Economic Analysis, "Regional Data, Annual state personal income and employment, Compensation of Employees by Industry (SA6, SA6N)," accessed November 7, 2017
- ↑ 5.0 5.1 5.2 5.3 United States Department of Commerce Bureau of Economic Analysis, "Regional Data, Annual state personal income and employment, Total Full-time and Part-time Employment by Industry (SA25, SA25N)," accessed November 7, 2017
- ↑ Republican State Leadership Committee, "About," accessed October 18, 2017
- ↑ Walter is also the executive director of the State Government Leadership Foundation, which describes itself as a nonprofit corporation whose mission is "promoting and advancing the conservative principles of limited government, free enterprise, and individual freedom" at the state level. State Government Leadership Foundation, "About SGLF," accessed October 18, 2017
- ↑ The Connecticut Mirror, "House, Senate Democrats unable to agree on provisional budget," June 27, 2017
- ↑ Conneticut General Assembly, "Fiscal Note for Amendment LCO 10072," accessed October 18, 2017
- ↑ Connecticut General Assembly, "House Bill No. 7501, June Special Session, Public Act No. 17-1," accessed November 15, 2017
- ↑ The Office of Governor Dannel P. Malloy, "Bill Notification Release 18," September 28, 2017
- ↑ Connecticut General Assembly, "S.B. No. 1502," accessed October 29, 2017
- ↑ The Office of Governor Dannel P. Malloy, "Gov. Malloy Signs Bipartisan Budget, Highlights Fully-Funded State Pensions and New Reforms to Strengthen Struggling Cities," October 31, 2017
- ↑ The OPM did not release a FY 2019 estimate.
- ↑ Sara Reynolds, "Email communication with Chris McClure, public information officer, Connecticut Office of Policy and Management," November 20, 2017
- ↑ Connecticut General Assemby, "Fiscal Note for SB-1502," accessed October 30, 2017
- ↑ Yankee Institute for Public Policy, "Breakdown of the new bipartisan compromise budget," October 25, 2017
- ↑ AEI describes itself as a "nonpartisan, nonprofit, 501(c)(3) educational organization" that is "dedicated to defending human dignity, expanding human potential, and building a freer and safer world." American Enterprise Institute, "About," accessed October 29, 2017
- ↑ The report defined full-time workers as working at least 35 hours per week for 50 weeks per year. The analysis does not include public safety workers or local government employees.
- ↑ Total state employee compensation was 56 percent more than that of private-sector workers when the value of job security as a form of compensation was included.
- ↑ United States Department of Commerce Bureau of Economic Analysis, "Regional Economic Accounts: Regional Definitions, Compensation of employees," accessed November 7, 2017
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Ballotpedia calculated the average state government compensation by dividing the state government compensation by the number of state government jobs. (Federal and local government workers and military personnel were not included.) Ballotpedia calculated private-sector compensation by: (1) subtracting Government and government enterprises compensation and jobs from the total compensation of employees and jobs and (2) dividing compensation by the number of jobs.
Launched in October 2015 and active through October 2018, Fact Check by Ballotpedia examined claims made by elected officials, political appointees, and political candidates at the federal, state, and local levels. We evaluated claims made by politicians of all backgrounds and affiliations, subjecting them to the same objective and neutral examination process. As of 2025, Ballotpedia staff periodically review these articles to revaluate and reaffirm our conclusions. Please email us with questions, comments, or concerns about these articles. To learn more about fact-checking, click here.
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