No one goes into public service to get rich. But as public-sector pay falls farther behind private-sector pay, all of us—not just workers and their families—suffer as positions go unfilled, experienced staff leave, and essential services deteriorate. This problem has long-term consequences. For instance, fewer young people choose to become teachers, which impacts the quality of education for future generations of citizens and workers.
In a new report assessing the current state of the public-sector pay gap, we find that state and local government employees now earn, on average, 17.6% less than similar private-sector employees. Although public-sector workers often have more robust benefits, this doesn’t make up for lower wages and salaries. Total compensation, including benefits, is still 14.5% lower for public-sector workers than for comparable private-sector workers. This pay gap disproportionately affects women and Black workers, who are more likely to be employed in public-sector jobs and who are disadvantaged in the broader labor market.
What Causes the Public-Sector Pay Gap?
The gap between public and private sector pay isn't uniform across the United States. It varies significantly from state to state, largely due to differences in public employees' collective bargaining rights. Rather than being covered by the National Labor Relations Act (the law that governs worker organizing, collective action, and labor relations for most private sector workers), public employees’ collective bargaining rights are shaped by a complicated patchwork of state and local laws and policies. Perhaps unsurprisingly, access to unions helps workers narrow the public-sector pay gap: the gap is widest in states where public employees lack collective bargaining rights, and narrower in states where public employees have stronger collective bargaining rights.
One particularly alarming finding of our new report is that the current 17.6% public-sector pay gap is even wider than before the pandemic, when the gap was 13.9%. Why are public-sector workers falling farther behind? One explanation is that political polarization has led to a rise in the number of states where Republicans control all levers of power, enabling them to pursue an increasingly extreme anti-government and anti-worker agenda in some states.
The political incentive to appear fiscally responsible worsens this problem. Politicians from both parties often make unrealistic promises about public services they can provide with existing funds. They also tend to take credit for "saving" taxpayer money by cutting public staff or keeping wages low, without acknowledging how these actions affect service quality. Coming out of the pandemic recession, private-sector job recovery has been strong, with employment levels rapidly exceeding pre-pandemic levels. In contrast, public-sector employment growth, after lagging private-sector growth in the long recovery from the Great Recession, rebounded more slowly after the pandemic and remains a diminished share of the workforce.
For small-government ideologues, a disgruntled, diminished workforce may be seen as a desirable outcome, not a disadvantage, of limits on public-sector bargaining rights. It is a way to tarnish the government “brand.” It’s also clear that right-wing legislative attacks on public employees’ union rights are often directly motivated by a desire to weaken unions’ ability to represent workers’ collective interests in shaping public policy.
Legislative Attacks on Public Sector Bargaining Rights
Republican attacks on government workers and their unions often follow a common playbook. Many are modeled on Wisconsin’s Act 10, passed in 2011, which severely limited collective bargaining rights for state and local government employees other than police and firefighters. Act 10’s sweeping changes nullified existing public-sector collective bargaining agreements, prohibited negotiations on any subject other than base wages, capped wage increases at the rate of inflation, outlawed payroll deduction of union dues, and required a new election each year in order for a union to maintain legal certification.
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On the heels of Act 10, Republican state house majorities in Idaho, Indiana, Missouri, Nebraska, Ohio, Oklahoma, Tennessee, Michigan, and other states passed legislation substantially restricting or prohibiting the collective bargaining rights of some or all public-sector workers. (Ohio’s law was quickly reversed by voters via a ballot initiative, Missouri’s was blocked by court action, and Michigan’s law was reversed in 2023 after Democrats gained control of the state government.)
State legislative attacks on public-sector bargaining rights have continued up to the present, with hundreds of bills filed in all 50 states since 2010. Notable changes enacted recently include the following:
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In 2017, Iowa restricted the scope of public-sector mandatory bargaining to base wages, capped wage increases at the level of inflation, prohibited bargaining over other aspects of compensation like health insurance and supplemental pay, required unions to undergo recertification elections each time a contract expires, and prohibited payroll deduction of union dues. Like Wisconsin’s Act 10, the Iowa law excluded public safety employees from the new restrictions.
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In 2021, Arkansas prohibited collective bargaining for all state and school district employees, leaving bargaining rights in place only for police, firefighters, and other city or county employees.
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In 2023, Florida—historically an exception among Southern states in granting bargaining rights to public-sector workers—began prohibiting payroll deduction of union dues and eliminating legal certification of any union whose dues-paying membership falls below 60%, unless workers undergo a recertification election.
In addition to legislative attacks, rapid private-sector wage growth spurred by a tight labor market and inflationary pressures in the post-pandemic economic recovery may also be a factor in the widening public-sector pay gap. By contrast, multi-year contracts negotiated prior to the pandemic by some unionized public-sector workers included scheduled wage increases that didn’t match the pace of inflation or private-sector wage growth.
Even during a period when public-sector jobs and pay have lagged private-sector growth across the country, public-sector workers in states with strong collective bargaining rights are still much better off than their counterparts in states with weak or no bargaining rights. When compared with private-sector workers, public-sector workers with strong bargaining rights have a narrower pay gap (-14.9%) than their counterparts with weak (-20.1%) or no bargaining rights (-22.9%). (In our analysis, collective bargaining rights can vary by occupation, and “strong” rights are defined as employers having a duty to bargain with workers over pay.)
Impacts on Racial and Gender Pay Equity
Weak or non-existent collective bargaining rights for public-sector workers further contribute to racial and gender pay gaps as women and Black workers are disproportionately employed in government jobs.
Public-sector jobs are rungs to the middle class for Black workers, who often face labor market discrimination, especially in the private sector where employers may be less likely to follow standardized hiring and promotion practices. Though Black workers are paid less than similarly qualified white workers in both sectors, the Black pay gap in the public sector is much narrower than in the private sector.
In addition to seeking greater protection against discrimination, Black workers may be drawn to public-sector jobs because they provide more secure pensions and other benefits. These benefits are especially valuable to Black workers because discriminatory policies and practices have historically relegated Black workers to jobs that lack secure benefits, prevented Black families from accumulating home equity, and generally hindered Black workers from achieving financial security and transferring wealth to younger generations.
Women are also more likely to be employed in government jobs than men, especially in certain occupations. Over three-quarters (77.4%) of public school teachers and teaching assistants are women, but women account for only 12.2% of police and firefighters. Teaching, like many female-dominated occupations, pays less than male-dominated occupations requiring similar professional training. Teachers’ relative pay is especially low considering that half of teachers and teaching assistants in the United States have advanced degrees. In contrast, male-dominated public safety jobs tend to pay better than other jobs that don’t generally require bachelor’s degrees.
How to Address the Public-Sector Pay Gap
What can be done to address these disparities? At the national level, Congress should pass the Public Service Freedom to Negotiate Act to ensure that state and local government workers across the country have the right to bargain collectively over pay and working conditions.
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States shouldn’t wait for Congress to act. Some have recently taken steps to strengthen collective bargaining rights for government workers:
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Nevada, where local government employees have had collective bargaining rights for decades, extended these rights to state employees in 2019. Other states with strong collective bargaining frameworks in place, including California, Washington, and Minnesota, have recently expanded coverage to occupations formerly excluded or functionally blocked from coverage.
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New Mexico overhauled its public-sector bargaining statute in 2020, including restructuring the state’s labor board system to strengthen previously weak or inconsistent enforcement of employee bargaining rights.
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Colorado granted collective bargaining rights to some state employees in 2020 and to some county government employees in 2022.
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Virginia began allowing local government bodies to voluntarily bargain with unionized workers in 2020, lifting a long-standing state ban on public-sector collective bargaining. Though this opening falls short of a statewide duty to bargain, it has quickly resulted in numerous local jurisdictions adopting collective bargaining ordinances and substantial numbers of public employees forming new unions.
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Maryland—where collective bargaining coverage varies by jurisdiction and occupation under a patchwork of highly fragmented collective bargaining laws—extended bargaining rights to some previously excluded public workers, including community college employees (2021), library staff (2024), and supervisory employees (2024).
Other states should follow their example to build a strong middle class and a more equitable economy. Collective bargaining is particularly effective at raising the pay of public-sector workers without college degrees. As a result, public-sector earnings are less unequal than private-sector earnings, with more workers clustered in the middle of the earnings distribution, and fewer with very low or very high earnings.
Middle-class government jobs have societal benefits that extend beyond the workers and their families. A large middle class fosters economic and social mobility and gives talented people from modest backgrounds more opportunities to contribute to society.
It’s clear that stronger unions can help shrink the widening public-sector pay gap, in turn helping to reduce racial and gender wage gaps. Moreover, research on the broader benefits of unions shows that public-employee collective bargaining rights come with clear benefits not only for workers but also the general public in the form of better public services, stronger whistleblower protections, higher labor standards in all sectors, lower poverty, and reduced expenditures on safety net programs.
Previous research has found that high union membership decreases inequality beyond the direct effect of raising the wage floor for members. Unions support higher minimum wages and other labor standards, change social norms and workers’ expectations about pay (changes that spill over to nonunion workplaces), decrease pay inequality within unionized workplaces, and generally support policies that foster economic opportunity and mobility.
The Importance of Fair Pay for Public Servants
Public-sector workers are often reluctant to quit careers devoted to public service, especially with pension and other benefits designed to encourage retention. For this reason, elected officials and public-sector employers can sometimes get away with cutting pay for extended periods before facing increased turnover and difficulty recruiting new workers, or even waves of strikes, as occurred among teachers in recent years or among bus drivers working under challenging pandemic conditions in 2021.
In the long run, however, the quality of public services suffers when low pay drives qualified, dedicated workers from public service. With staffing shortages still facing many state and local governments across the country, strengthening public-sector collective bargaining rights and narrowing the public-sector pay gap is a national priority.
