Rio Grande Foundation Analysis Finds New Mexico’s Public Sector Workers Earn More than Private Sector

(Albuquerque) Responding to the ongoing debate over whether to increase state government employee pay in New Mexico, the Rio Grande Foundation has produced a new report, “Public v. Private Sector: Income Differences in New Mexico” that attempts to create an “apples to apples” comparison of the overall compensation of workers in the public and private sectors.

According to the Foundation’s analysis, New Mexico government workers are paid an 8.6 percent premium over their private sector counterparts.

“It is widely known and reflected in our report,” notes policy analyst Ben Sugg, “that government workers give up some upfront pay in exchange for more generous health care, pension, and time-off/retirement. The question is whether those ‘fringe benefits’ lead to relatively higher pay for workers in New Mexico’s state government or not.”

The Rio Grande Foundation analysis used a statistical technique called “Regression Analysis” in order to better understand the differences in pay among various types of workers. Regression analysis is a statistical technique for estimating the relationships among variables. In this paper, it is used to account for the relevant differences between state and private sector workers.

According to the report’s findings using regression analysis, despite having not received a raise since 2008, New Mexico’s public sector workers remain better-paid overall than their equivalents in the private sector. That difference is 8.6 percent. Read the brief for yourself here.

Update, appropriate to this study, check out this new article from Albuquerque Business First which states that “Private employers paid their workers an average of $28.89 an hour in wages and benefits in December 2012, while state and local governments paid an average of $41.94 an hour according to the U.S. Bureau of Labor Statistics.”

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