The Real Pay Gap in Wyoming

by Wyoming Liberty Group Staff

We hear a lot about the gender pay gap in our state. This non-issue keeps coming back, as we noted back in February, despite the fact that it is mostly a matter of statistical mythology. Last year I debunked the Department of Workforce Studies report on the issue, explaining that the DWS appeared to have created the pay gap with a statistical trick hidden in their methodology.

However, there is a pay gap in Wyoming that rarely gets any attention, and certainly not the attention it deserves. It is the difference between non-minerals private sector jobs and

• Jobs in minerals, and
• Jobs in state and local governments.

When we add together all components of employee compensation, a job in the private sector outside of minerals pays approximately half of what a government job pays. These numbers include both full-time and part-time employees, a point that is important to keep in mind: since Obamacare went into effect the average worker in the private sector has lost out to government workers, not necessarily because his hourly earnings have declined (although they are not spectacular by any stretch of imagination), but because it has become more difficult to get a good amount of hours in the private sector.

After all, Obamacare did redefine full time as 30 hours per week; to avoid having to provide health insurance (made exceedingly expensive by Obamacare) many employers simply capped employee hours just below that threshold. As I will explain in a moment, we can actually see this Obamacare effect in employee-compensation data.

First, let us review the compensation per employee in non-minerals private industries, minerals, state government and local government. Table 1 reports current-price figures, i.e., not adjusted for inflation, for the past 20 years:

Table 1

Source of raw data: Bureau of Economic Analysis

Let us now slice these numbers a different way, asking the question: How much does a person working for minerals, the state government and local governments make per $1 earned by a person working in the private sector outside of minerals? Well, quite a bit, it turns out:

Figure 1

Source of raw data: Bureau of Economic Analysis

There are two take-aways from Figure 1.

First, government workers have earned more than private-sector workers generally for as long as this data has been available, i.e., the past 20 years. While wages and salaries may not differ that much, the combination of more full-time employment and better benefits works out to the advantage of government employees. Already in 1998 a state worker made on average $1.65 for every $1.00 in the non-minerals private sector; the same number was $1.47 for employees in local government.

Secondly, these difference remained below $1.90 until 2012 – the year when the phase-in of Obamacare was complete. From that moment on, the parity between, on the one hand, state and local government workers and, on the other hand, workers in non-minerals private jobs has grown almost uninterruptedly. In fact, state government jobs have even almost closed the gap to jobs in the minerals industry.

Again, these numbers compare total employee compensation, giving benefits the role they deserve and allowing for differences in work-week hours to be manifested. This makes for the most comprehensive comparison available through public statistics.

The gap between government workers and workers in the private sector is the real wage gap in the Wyoming economy. It is time we had a serious conversation about how to close it.