New Mexico’s Unionized Public Employees Earn More than Private Sector Counterparts

(Albuquerque) As the Legislature discusses the budget during the 2014 legislative session, pay hikes for State and local government workers are on the table. The Legislative Finance Committee has proposed relatively ambitious pay raises ranging from 1.5 percent to more than 3.0 percent. Gov. Martinez, on the other hand, has proposed more modest pay hikes targeted at teachers. Martinez’s plan would result in small raises for about 7,000 of the state’s roughly 22,000 workers.

With these competing proposals on the table, it is worth looking at the data to better understand the compensation premium that’s already enjoyed by government workers in New Mexico. New research conducted for the Rio Grande Foundation, documented in “New Mexico’s Unionized Employees earn more than their Private-Sector Counterparts” demonstrates the source of that premium: In unionized sectors of New Mexico government, employee pay is higher than it is for government workers who aren’t union employees. In other words, taxpayers pay more than they have to for basic public services.

Economists from the University of Miami (OH) and TrinityUniversity conducted a study of 819 public employees in the state, and found that collective bargaining in the state leads to less-affordable services for the taxpayers and artificially-inflated pay for unionized government employees.

Noted Rio Grande Foundation President Paul Gessing, “Around the state, government employees who are working under a union-negotiated collective bargaining contract cost taxpayers 7.4% more in total compensation – the “union premium” – for services the taxpayers could be getting more affordably from a non-unionized counterpart.”

When discussing across-the-board pay raises for public sector workers, it is important that policymakers and the Legislature have a full understanding of public employee pay and benefits relative to their private sector counterparts.

Concluded Gessing, “New Mexico desperately needs to improve the health of its private sector. While a growing private sector economy can support a growing and better-compensated public sector, this is not currently the case in New Mexico.