This is the Cato Daily Podcast for Tuesday, January 12, 2010.

I'm Caleb Brown. The saying goes, state, local, and federal workers make less

than they otherwise would in the private sector giving up wages for the security of

public sector employment. If only that were true says Chris Edwards director of

tax policy studies at the Cato Institute he says public sector workers on average make more. Their pensions

are threatening to bankrupt dozens of states. State governments are deeply in debt. They are having

a hard time balancing their budgets. One good place that they should

look is employee compensation. There are 20 million state and local workers in the country and

their wages and benefit costs account for half of all state and local spending.

So if you want a place to find cuts in state budgets, look at employee compensation.

The statement that I had always heard living in Kentucky was that, well sure, state workers make less than they would in the private sector, something you say that's not true,

but what they're exchanging their wages for is the security of state employment. but of course if they're making more anyway

that that that trade-off is just not occurring. Yeah I often hear that but if you look

at the actual data these days state and local workers earn much higher

wages than in the private sector, and they earn more benefits, and they have a much more secure job position.

So for example, state and local workers earn on average 34% more than US private sector

workers in terms of wages, but they earn 70 percent more in benefits

than private sector workers, and their job security is much, much higher if you look at the rate of firing and layoffs in the private and public

sectors.

In what states do you find that to be the worst problem?

I looked at data showing regional differences in government pay in state and local governments across

the countries and there are large differences.

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