October 22, 1999 (The Editor’s Desk is updated each business day.)

Pay gains similar for workers in private industry and State and local government over past two decades

Pay increases in private industry and in State and local government were similar on average between 1981 and 1998.

[Chart data—TXT]

The wages and salaries of private industry workers rose by 3.9 percent per year from 1981 to 1998. For State and local government workers, the average rate of increase was 4.5 percent. The trends were even closer if the comparison involves only the service industry. Pay changes in the private service industry and in the State and local government service industry were virtually identical in the 1981-98 period: 4.7 percent per year for private and 4.6 percent for State and local government.

Looking at recent years, wages and salaries in private industry increased by 3.2 percent per year in the 1990s compared to 2.9 percent in State and local government. The corresponding service-industry trends were the same or about the same: 3.3 percent per year in the private sector and 2.9 percent in State and local government.

Note that differences in the rates of wage change between all private industry workers and all State and local government workers are to be expected, because the industry and occupational composition of their work forces differ. For example, service industry workers make up nearly two-thirds of State and local government workers but only about a third of private industry workers.

These data on earnings are a product of the BLS Employment Cost Trends program. More information is in "Compensation Cost Trends in Private Industry and State and Local Governments" (PDF 67K), by Albert E. Schwenk, Compensation and Working Conditions, Fall 1999.