Well you be the judge.

We have 1140 city employees, if you divide that by $93.3 million budgeted for them, that comes to $82,000 per employee, this includes benefits, etc. If you take that number times 72% (the amount of the budget that is only salaries) that comes to $59,000 a year in wages per employee.

Do I think city employees deserve a fair wage and benefits. YES! Do I think these ‘fair’ wages are comparable to the private sector? NO!

Just for fun, why don’t we put city employees wages more comparable to other living wages w/benefits in the private sector, in Sioux Falls. Let’s say $40K + $7K in benefits = $47 K x 1140 = $53.6 million for a city savings of almost $40 million a year.

Conclusion, do I think city employees are overpaid? YES!

By l3wis

20 thoughts on “Are the city’s public sector jobs comparable to the private sector?”
  1. I’d argue that there needs to be a distinction between different types of city employees. Surely not all are overpaid – in fact I’d argue that is the minority.

    So if you wish to show that they are in fact overpaid, then by all means compare the salary of someone who works as a Civil Engineer to what that person would make in the private sector.

    Do the same for IT Technicians, Nurses, Administrative Assistants, Maintenance Personnel, HR staff etc. etc. Then you start to see a much clearer picture.

    You can’t really compare city employees against non-city employees, because the city tends to be administration and manager heavy. That isn’t a criticism… it is a reality. They also don’t hire a lot of part time entry level people like you find in retail or the food service industry. So a direct comparison without detail isn’t very useful.

    I’ve looked at what some city employees make since it is public information, and I’ll tell you from what I’ve seen they aren’t compensated more than their private sector peers if you talk salary alone. In fact, most are underpaid in terms of their private counterparts – however where city employees really pull ahead is when you start looking at the benefits package.

    You don’t find many companies that offer the health insurance package the city does, nor will you find many with such a lucrative pension including the whole “banked sick time counting towards pension” nonsense. So when you think of total compensation including benefits then yes I can see where the city might be a bit above most private employers.

    There are exceptions to every rule however – and I’m not about to make a blanket statement about their pay knowing that it can vary wildly even within a single city department.

  2. Respectfully, you can’t engage in math this crude and expect to draw some kind of meaningful conclusion. As Craig references, there are all sorts of variables here for which you need to control and your math controls for none of them. And surely you’re smart enough to know this, which forces one to ask why you do posts like this?

  3. I missed it, did you include non working housewives, transients and and penetentiary workers, kinderfartners and waiters in this? Did you factor the 1000 milionaires and the couple billionaires? Credibility shrinking!

  4. City employees as general rule make very good wages compared to their private enterprise counterparts. Not all, but certainly most. Look for instance at the water reclamation department. That info is readily available. Look it up and check it out. Very lucrative salaries from top to bottom. The last time I checked the city had at least 30 employees that make more than the governor of SD.

    The city, contrary to popular myth, also has a huge number of part time, no benefits employees. Not just in the summer in the parks department, but in ALL departments. 400 part timers to 1100 full timers is a lot.

    The disparity in salaries is especially evident after you read the argus article that was printed just two days ago about rent prices in this town.

    Snippets.

    The issue is fair-market rent in Sioux Falls, and average hourly wages create a gap that’s difficult to fill. For example, fair-market rent for a two-bedroom apartment in Sioux Falls is $681 on average. To afford that residence, a person would have to work full time and be paid at least $13.10 an hour. But in Sioux Falls, the average wage for a local renter is $10.80 an hour….

    ….

    By the numbers

    $1 million:

    The amount of money cut from the rental assistance program this year

    185:

    The number of those being assisted by the rental assistance program who no longer will be able to receive it, if federal budget cuts remain in place next year.

    14,452:

    The number of meals served by The Banquet in June

    11,652:

    The number of meals served by The Banquet in April
    Information provided by the Sioux Falls Housing and Redevelopment Commission

    So the real issue is not so much that the front line city employee is overpaid, but that the typical private sector worker is grossly underpaid.

  5. Craig, that was an AVERAGE of all city employees. I realize that they all don’t make that. But what surprises me is that almost 30% of employee expense is benefits. There isn’t one single f’ing private sector employer in this town that pays out those kind of benefits. If you find one, I will eat crow.

  6. Eat crow eh….well first off, you gotta belong to a union. Nurses have a good thing going. UNION. Speaking of wage disparity, did anyone else do the math on those 530 full time guard employees who are taking an 88 hour sequestrian hit to the bottom line? 88 hours and the average loss of income for those 530 guardsmen is $4200??? Do the math on that one.

  7. Private companies may pay more or less in benefits – it depends on what LEVEL an employee is at in the organization. So… uh…. how many hamburger flippers, or retail sales “associates” on commission does the city employ?

  8. Re: the guard pay – recently they also had to start working a full 8 hour day to get paid for a full 8-hour day – whereas previously they could get 8 hours of pay for working 4 hours. There was a great deal of disgruntlement amongst the guard due to that change.

  9. Here’s the overall “average” of benefits as a percent of total compensation across all occupations:

    “Employer costs for employee compensation averaged $31.09 per hour worked in March 2013, the U.S.
    Bureau of Labor Statistics reported today. Wages and salaries averaged $21.50 per hour worked and
    accounted for 69.1 percent of these costs, while benefits averaged $9.59 and accounted for the
    remaining 30.9 percent.”

    http://www.bls.gov/news.release/ecec.nr0.htm

  10. Ruf….burger flippers and retailers are not alone in the meager wages department. In this town in the office and clerical field there are 6,360 workers (nearly all women) who make less than $11.20 an hour. 2,544 of those clerical workers make less than $9.74 an hour. The same goes for a hell of a lot of other jobs in this town. There are over 34,000 jobs in SF that pay less than $11.04 an hour. The city pays considerably more than that at most any entry level job whether they are pushing a broom or watering a tree.

    Another example is heavy equipment operators. Private sector operators are paid 10 to 20k less for the same skill. No hard feelings towards the city wage. On the other hand, private sector salaries SUCK.

  11. DL: “‘Nation wide’

    LOL!

    Now let’s compare them to SD and Sux falls.”

    Seems to me you’re the one making the claim that city employees are overpaid and that their benefits are out of line with private employers. That means you are the one who should be supporting your statements with evidence.

    Ruf did offer some analysis which shows the city benefits aren’t out of line with national averages. From my seat it looks like you didn’t even bother to look into the issue before making your assumptions.

    “There isn’t one single f’ing private sector employer in this town that pays out those kind of benefits. If you find one, I will eat crow.”

    You might want to retract that bet. First off, I should remind you that union railroad employees work for a private employer. I should also remind you that the local unions have been fairly successful for electrical workers and HVAC workers among others.

    I also know someone (well) who works for US Bank. He not only gets a nice match on his retirement via a 401(k), but they also offer a pension program. They pay the majority of healthcare, dental, and vision, offer a truckload of vacation, and they even offer some type of a healthcare plan for retired employees. They also offer tuition reimbursement and will even pay for his bus pass if he takes the bus to work rather than driving a car.

    I don’t know the total percentage of benefits vs. pay because frankly I don’t know his pay… but considering they offer the same benefits to all their employees I have to think it is in line with what the city offers.

    Do I think most Sioux Falls residents have benefits packages that make up 30% of their total compensation? Nope… but obviously there are a few that do.

  12. DL: “‘Nation wide’

    LOL!

    Now let’s compare them to SD and Sux falls.”

    Seems to me you’re the one making the claim that city employees are overpaid and that their benefits are out of line with private employers. That means you are the one who should be supporting your statements with evidence.

    Ruf did offer some analysis which shows the city benefits aren’t out of line with national averages. From my seat it looks like you didn’t even bother to look into the issue before making your assumptions.

    “There isn’t one single f’ing private sector employer in this town that pays out those kind of benefits. If you find one, I will eat crow.”

    You might want to retract that bet. First off, I should remind you that union railroad employees work for a private employer. I should also remind you that the local unions have been fairly successful for electrical workers and HVAC workers among others.

    I also know someone (well) who works for US Bank. He not only gets a nice match on his retirement via a 401(k), but they also offer a pension program. They pay the majority of healthcare, dental, and vision, offer a truckload of vacation, and they even offer some type of a healthcare plan for retired employees. They also offer tuition reimbursement and will even pay for his bus pass if he takes the bus to work rather than driving a car.

    I don’t know the total percentage of benefits vs. pay because frankly I don’t know his pay… but considering they offer the same benefits to all their employees I have to think it is in line with what the city offers.

    Do I think most Sioux Falls residents have benefits packages that make up 30% of their total compensation? Nope… but obviously there are a few that do.

  13. Apply for a job with the city then if they are so overpaid. You too can work for Mike. Yeah I didn’t think so.

  14. I should also remind you that the local unions have been fairly successful for electrical workers and HVAC workers among others.

    Gotta call you on that one Craig. Local craft employees are far from “raking it in. From ’73 to ’84 I was an electrician before switching careers. When I left in ’84, 4 of 5 electricians were union. Now nearly 30 years later, 1 in5 are union. Back then journeymen were making $16.00 an hour. That’s over $35.00 an hour in today’s dollars. Today journeymen make about $25 an hour. That’s $11.12 an hour in 84 dollars? How did the unions lose their punch from ’84? Much of that can be blamed on guys like Craig Lloyd. They cut every corner they could. I don’t recall him ever having union labor from any trade back then. Always took the lowest of lowball bids From all the trades. Showed no loyalty to any subcontractor.

    In short, are today’s craftsmen inasgood a position as they were 30 years ago?

    NOT EVEN CLOSE

  15. If your data is accurate Poly, it sure seems like those electricians need to join their local union. Hard for the Unions to have a lot of pull if they only have 20% of the workforce.

    I was basing my statements on people I actually know (who happen to be union). They make a good living, and their benefits are far above most blue collar trades. I give the union credit for that… which probably explains why city employees still have good benefits – because most of them are still union.

    All of that aside – most people aren’t doing as well as they were 30 years ago when you adjust for inflation. There is only one group that seems to have excelled and they are the CEOs and 1%’ers.

    Case in point: http://www.washingtonpost.com/wp-srv/special/business/income-inequality/

  16. Craig, just up and joining the crafts union is easy to say but not so easy to do. The reason unions went from a majority to a minority is because union shops simply could not win any bids when generals like Lloyd always take the lowball bid. Over time, unions were forced to lower their salary range just to be able to get an occasional bid.

    Could not possibly agree more with your last paragraph. Kinda scary. You and I able to agree something.

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