$$$ and the State – How Do They Stack Up?

If you’re anything like me, every two weeks you look at your paycheck and hope for just a few more dollars to magically appear. In reality, the number stays the same.

For state and local government employees, salaries have been stagnant for years. “Our whole country has been stunned by the difficulty we’ve had in coming out of this recession,” explained Elizabeth Kellar, President and Chief Executive Officer of the Center for State and Local Government Excellence (SLGE).

During GovLoop’s State and Local spotlight interview, Kellar told me that the center has been tracking employee compensation trends for the past ten years.

Fortunately, after years and years of stagnation, states are seeing a little more room for employee raises and bonuses. “After many years where wages were frozen, government employees are starting to see a slight wage increase,” said Kellar. “But on average the wage increases are lower than the wage increases in the private sector. State and local government wages and salaries increased by 1.6 percent in the 12-month period ending last December, compared with a private-sector increase of 2.2 percent.”

The stagnating wages are particularly difficult for middle class government workers.

“From economic trends we know the middle class has really had difficulty keeping up as our economy has shifted. We have a very highly skilled and well-educated workforce,” explained Kellar. “The salary constraints are truly putting a strain on us when it comes to hiring and retaining employees.”

Wage stagnation is not the only factor affecting govies’ paychecks. The rising cost of pension and health benefits are also having a major impact on take home pay.

“Just as state and local employers have had to put more money into pensions and healthcare costs, they have also asked employees to increase the amount of money they’re putting into pensions and healthcare. The actual take home pay is being affected. Their benefits are still good, but they have to pay a lot more,” said Kellar. “According to a survey of state and local government human-resources managers last year by the Center for State and Local Government Excellence. 53 percent of respondents’ jurisdictions shifted more health-care costs to employees, while 34 percent increased employee contributions to retirement plans.”

The rising cost of healthcare and stagnate pay are worrisome to state and local governments particularly because their ability to attract and retain new talent is being affected.

The good news, though, is that millennials are particularly public service minded and many want to go into government. “Millennials really do want to make a difference. But state and local governments find that a lot of millennials think of nonprofit work, or working for a contractor as the best opportunities to get into public service jobs,” said Kellar.

So how can we get millenials involved more in government early? One way is to offer internships. “People can get experience, get their foot in the door, and understand what it takes to get a job in government. Unfortunately during the recession, a lot of internships and entry-level jobs were eliminated. We don’t have the kind of pipeline that we need in local and state government,” said Kellar.