Public vs. Private Sector Compensation in Ohio
Public workers make 43 percent more in total compensation than their private-sector colleagues

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Ohio’s Senate Bill 5, which increases the health and pension contributions of certain public‐sector workers and narrows the scope of collective bargaining, goes before voters in a statewide referendum on November 8. The wisdom of the bill depends crucially on how the current compensation of Ohio’s public employees compares to the compensation of similar private‐sector workers. Proponents of SB 5 believe that public compensation is already higher than the market, and climbing at an unsustainable rate that must be slowed in order to bring public spending to competitive levels vis‐à‐vis other states. Opponents of SB 5 argue that Ohio public workers currently receive less compensation than they could receive in the private sector, and that SB 5 would worsen the problem. This report compares current public‐ and private‐sector compensation in Ohio, focusing on how the wages, benefits, and job security of public employees compare to those of private‐sector workers with similar skills. We conclude that:

• Ohio public employees receive nearly the same wages as comparable private workers (2.5 percent less), but

• Fringe benefits for Ohio public workers are more than twice as generous as those paid in the privatesector, meaning that when pay and benefits are taken into consideration public workers receive 31.2 percent more in total compensation than private‐sector counterparts.

• Ohio Public employees enjoy significantly greater job security than private‐sector workers. That job security has an economic value equal to approximately 10 percent of compensation.

• In total, considering wages, benefits (including retirement), and the value of job security, Ohio public sector workers are paid 43.4 percent more than those in private‐sector employment.

• Even if the provisions of SB 5 were implemented in full, it is very likely that Ohio public‐sector workers would continue to enjoy a substantial compensation premium over private‐sector Ohioans.

Andrew G. Biggs is a resident scholar at AEI. Jason Richwine is a former National Reserch Initiative fellow at AEI.

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