Staff shortages, high turnover and the continued difficulty in hiring has yielded record salary increases in state and local government over the last year. According to the US Bureau of Labor Statistics, the 12-month period that ended in March 2024 saw wage and salary growth of 5%. That’s the highest growth in two decades, with the first calendar quarter of 2024 representing six consecutive quarters of annualized growth over 4.5%,

The 12-month increase in wage and salary dollars is higher than the 4.3 growth in the private sector, as the chart below indicates. As it shows, with occasional exceptions, private growth usually exceeds what happens in state and local governments.

Benefit growth for the state and local public sector was 4.5% for the 12-month period that extended through March, compared with 3.6% in the private sector. As the second chart, below, illustrates, benefit growth for state and local governments generally is greater than in the private sector, which shows only occasional spurts of relatively higher increases.

As many governments develop their Fiscal Year 2025 budgets, employee costs, coupled with inflation, some weakening of revenues, and the upcoming end of federal pandemic dollars is introducing budget balancing complexities, as cities such as Houston, Los Angeles, and San Diego grapple with projected shortfalls.

Note: The excellent National Association of State Retirement Administrators website provided the charts above. They are drawn from the US Bureau of Labor Statistics’ most recent 12-month data, with its wage comparison chart here and its comparison benefit chart here – both shown by calendar year rather than by quarter.

#StateandLocalHumanResourceManagement #StateandLocalTotalCompensation #StateLocalSalaryIncrease #StateLocalBenefitIncrease #StateandLocalBudgeting #CityBudgetBalance #PublicVsPrivateSectorCompensation #PublicVsPrivateSectorBenefits #NationalAssociationStateRetirementExecutives #USBureauLaborStatistics #B&GWeeklySelection