"The public administration sector consists of establishments of federal, state, and local government agencies that administer, oversee, and manage public programs and have executive, legislative, or judicial authority over other institutions within a given area..." according to the NAICS manual. So far so good, right? But "government establishments engaged in the production of private-sector like goods and services should be classified in the same industry as private-sector establishments engaged in similar activities."
As an example, workers at public utility companies are counted in the utilities industry. This grouping of government and private activities into the same industry gives rise to the need to use another grouping called ownerships as a way to differentiate employment at private and public establishments, and allow for breakouts of federal, state, and local government employees.
This employment pattern for public workers differed significantly from the private-sector employment pattern. Five industries employed the bulk (66%) of private-sector workers: professional and business services; retail trade; manufacturing; health care and social assistance; and accommodation and food services. By comparison, these industries accounted for a small piece (9%) of total government employment. The other one-third of private-sector workers were fairly evenly distributed among the remaining broad industries.
rise when private-sector employment goes down, and vice versa. Government often adds jobs during recessions because of an increase in demand for social services. As Oregon has seen slow post-recession job growth in the private sector, government employment has been on the decline.
Historically, Oregon tends to have a higher concentration of state and local government employment than the nation. Graph 1 shows Oregon's concentration of employment by government sector compared to the national average. In this analysis, a location quotient of 1.29 indicates that Oregon's employment is 29 percent more concentrated in state government than the nation as a whole. Oregon's consistently low concentration of federal government employment is likely due to the state's relatively rural nature, smaller population, and fewer major economic hubs compared with our West Coast neighbors.
|Oregon's Government Employment|
|October 2012, Seasonally Adjusted|
|Employment||Percent of Total Nonfarm||Change From October 2011|
Over the past five years, total compensation for private employees has grown by 12 percent, compared with 6 percent for state and local government workers. Private-sector employees have made greater gains in wages and salaries than state and local employees.
In Oregon, earnings for public-sector workers averaged $46,400 in 2011. While this figure is about $4,000 higher than the average wage for private-sector workers, it is significantly influenced by the high average wage ($68,000) of federal government workers in the state. Oregon's state and local government workers had average earnings - $43,000 and $44,100, respectively - much closer to the private-sector average of $42,400.
Average Hourly Compensation Rates
|Wages and Salaries||$18.32||$20.27||11%|
|State and Local|
|Wages and Salaries||$25.73||$26.70||4%|
|Note: Data is for the second quarter|
|Source: U.S. Bureau of Labor Statistics|
Some of the difference in compensation is also likely explained by differences in age. Older workers tend to have more work experience and are therefore able to command a higher wage from employers. In comparing the age distribution of private- and public-sector workers, we see that public employees tend to be somewhat older. In fact, more than one-half of Oregon's government employees were age 45 or older in 2011, compared with 42 percent of private-sector workers.
Another area where public and private-sector workers differ is education. Although there is no data on the education levels of specific workers, we do know the educational requirements of jobs in both the public and private sectors. In general, jobs that require a bachelor's or advanced degree pay more than those with on-the-job training as a minimum requirement. Of Oregon's private-sector jobs in 2010, about two-thirds (65%) required only on-the-job training and less than one-fifth (18%) required a bachelor's or advanced degree. In the public sector, almost one-third (32%) of jobs required only on-the-job training, while 43 percent required a bachelor's or advanced degree (Graph 2).
There is also a much higher incidence of union coverage among government employees, which may lead to higher compensation levels. Union coverage in Oregon's public sector was 63 percent in 2011, while the private-sector coverage rate was 9 percent. In the second quarter of 2012, the total cost of compensation to private unionized employees at the national level totaled $38.80 per hour, slightly below compensation rates ($41.10) for state and local employees. Private non-union employees had an average total compensation rate of $27.76 per hour, slightly lower than the $28.80 total private average.