North Carolina’s Growing Income Gap

There is a widening gap between two major classes of income earners in North Carolina. In the modern-day version of the "haves" versus the "have-nots," state government workers earn significantly more in wages and benefits than North Carolina’s private sector workers.

Indeed, the wage gap between state government employees and private sector workers in North Carolina doubled from 2000-20091.

Average Annual Wage in North Carolina

  2000 2009
State Gov’t $32,832 $44,158
Private Sector $30,977 $39,350
Gap 6% 12.2%

 

Data from 2009 reveal state government workers earn an average wage of $44,158, compared to the private sector’s average wage of $39,350, a difference of 12.2 percent.

The 2009 wage gap double the 6 percent pay differential from 2000, when average state employee wages were $32,832 compared to average private sector earnings of $30,977.

An increase in state government employee average salaries of 34.5 percent from 2000 to 2009 – compared to just 27 percent for the private sector – accounts for the widening pay gap.

 

Percentage Change in Average Salary in NC 2000-2009

 

When factoring in estimated overall compensation, the gap between state government workers and the private sector widens even further. Using Bureau of Labor Statistics national estimates of average benefits (such as health care, pensions, paid leave, etc.) for state and local government employees and adding it to North Carolina’s average state government employee wages, total compensation packages for state workers reach $67,008. Conversely, average total compensation for North Carolina private sector workers totals $55,737 – for an alarming gap of 20 percent.2

Total Compensation in 2009

Private Sector $55,737
State Gov’t $67,008
Gap 20%

 

Furthermore, comparing wages of similar jobs in both state government and the private sector reveals striking pay differences. In one specific case, North Carolina private sector workers earn wages averaging roughly one-third less than their state government counterparts.

Average Wages for Select Industries in NC, 2009

  State Gov’t Private Sector Gap
Transportation/Warehousing $49,947 $39,718 25.8%
Administrative and Waste Services $37,480 $28,505 31.5%
Healthcare and Social Assistance $43,628 $38,742 12.6%

 

The State of North Carolina is facing another enormous budget deficit in 2011. Proposals to bring state government employee compensation in line with the state’s private sector would go a long way toward eliminating the state’s budget woes.


1. Quarterly Census Employment and Wages, NC Employment Security Commission. Available at: http://esesc23.esc.state.nc.us/d4/QCEWSelection.aspx

2. Source for compensation averages from BLS Employer Costs for Employee Compensation, news release March 2010. Author added national averages for benefits to wages of NC state employees and private sector employees from NC ESC data to arrive at total. This is the closest estimate available given data restraints. Available at: http://www.bls.gov/news.release/ecec.nr0.htm

This article was posted in Economy by Brian Balfour on August 2, 2010 at 10:54 AM.

© 2011 The Civitas Institute. Visit us on the web at www.nccivitas.org.
This article can be found at http://www.nccivitas.org/2010/north-carolinas-growing-income-gap/

Comments on this article

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    Mike Hunziker
    Mike Hunziker Jul 02, 2011 at 8:23

    looks like its time for north carolina’s private sector to pay wages that families can live off of.

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