Report: Government work might not always pay as well as the private sector, but the benefits are better

Local governments might not be able to provide ludicrous salaries comparable to those offered by some employers in the private sector, but there are several notable advantages that come with public service jobs. And as administrators look to fill open vacancies brought on during this ongoing “great resignation,” highlighting those benefits is more important than ever to entice potential candidates. 

For example, nearly all public workers have access to pension plans, health care benefits and life insurance, according to a brief issued this month about new research from MissionSquare Research Institute. Further, the findings note a majority of government employees have access to quality-of-life benefits like paid leave, employee assistance programs, wellness initiatives and defined contribution retirement savings accounts. 

“Given the range of recruitment and retention challenges public employers of all sizes face in 2022, now more than ever it is important for state and local leaders to understand and optimize public sector benefits to be employers of choice,” said Joshua Franzel, Ph. D, managing director of MissionSquare Research Institute and the publication’s author in a statement.  

Specifically, researchers found that of 18.5 million state and local government employees, upwards of 86 percent have access to a defined benefit pension plan, or a type of plan that defines a regular amount the employer will pay in retirement. Notably, more than 90 percent of those employees are required to contribute to their plan at an average of 7.2 percent of annual earnings. 

A little over a third of workers (38 percent) have access to a defined contribution retirement plan, in which employees allot a specific amount from their paychecks for the plan, with 18 percent participating. Fifty-two percent of state employees have access to one of these plans, relative to 34 percent of local employees, with 25 percent of state employees participating and 16 percent at the local level. 

The percentage of public employees that hold benefits is higher in government workplaces. Of all civilian workers, 25 percent had access to defined benefit plans, with 20 percent participating; 61 percent had access to defined contribution plans and 43 percent participated, according to 2021 data from the U.S. Department of Labor. 

The study found that a vast majority of government employees likewise hold health care benefits.

“Overall, 89 percent of state and local employees have access to health care benefits, which may include medical, dental, vision, and prescription drug coverage components, with 78 percent participating,” the report says. “More specifically, 96 percent of state and 87 percent of local government staff have access to some combination of these benefits and 86 percent and 75 percent participate, respectively.” 

The report comes as the employment outlook—after several uncertain years brought on by the ongoing pandemic—is continuing to brighten across all sectors. Employment rose by 467,000 jobs in January, unexpectedly because of the omicron variant’s economic impact, according to the most recent Employment Situation Summary from the U.S. Bureau of Labor Statistics. One development notable to local administrators highlighted by the report is a rise in local government education employment. Jobs increased by 29,000 in January, while still being down by 359,000, or 4.4 percent, since February 2020. 

Other notable data points relevant to public sector benefits gleaned from MissionSquare Research Institute’s report include: 

• At least 38 percent of state and local workers have access to a health savings account (50 percent of state, 34 percent of local) and 71 percent have access to a health care flexible spending account (88 percent of state, 65 percent of local). 
• In the aggregate, a majority of state and local employees have access to paid leave and quality of life of benefits, except for paid family leave. For state workers, 25 percent have access to paid family leave, while nearly all (98 percent) have access to unpaid family leave. For local employees, 27 percent have access to paid leave, while 93 percent have access to unpaid leave. 
• While 30 percent of all state and local employees have access to long-term care insurance, this is the case for about half (51 percent) of those employed by states, but only 22 percent for local employees. 
• About 80 percent of state and local employees have access to life insurance, with nearly universal participation, but access rates for short- and long-term disability benefits are far lower.