Bonuses Included, Michigan Government Benefits Exceed Private Sector by $5.7 Billion

In an article in The Detroit News, Michigan Sen. Vincent Gregory, D-Southfield, states that government workers get generous health and pension benefits in lieu of bonuses, apparently implying that the two offset. Thankfully, there are data on the issue to check his theory.

The U.S. Bureau of Labor Statistics reports on the wages and benefits offered to workers around the country. The value of “nonproduction bonuses” — which include holiday bonuses, profit-sharing and safety bonuses among others, is the equivalent of 11 cents an hour for government workers and 45 cents an hour for private-sector workers. These figures are national, not just specific to Michigan.

However, that is not nearly enough to make up for retirement and health insurance differences. Government employee retirement benefits cost $3.26 an hour, but only 99 cents an hour in the private sector. Government employee health benefits cost $4.65 an hour while only $2.10 an hour in the private sector.

When applied to Michigan and including all benefits, government employee benefits cost $6.67 more per hour than in the private sector. All told, balancing these benefits to private sector averages would save the state $5.7 billion.

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