Nevada government pay gap highest in the nation, new data shows

Robert Fellner

When measured as a percentage of private-sector earnings, Nevada local government workers were by far the highest paid in the nation last year, according to newly released Census data.

Last month, the U.S. Census Bureau released 2017 earnings estimates for the median full-time, year-round worker.

At $58,644, the median earnings for local government workers in Nevada were 46 percent greater than the $40,259 received by Nevada’s private-sector workers — a disparity that was by far the largest nationwide and nearly six times greater than the eight percent differential found at the median state nationwide.

Hawaii had the 2nd largest local government pay gap nationwide, with median earnings for local government workers coming in at 31 percent above median earnings for private-sector workers.

Table 1: Top 5 states with largest median earnings for local government workers as a % of private earnings, 2017

It is important to note that this pay disparity does not control for occupational differences between the two groups. When controlling for education, experience and other factors that affect pay, the earnings difference between the groups nearly disappears.

Nevada government workers, however, receive non-monetary forms of compensation that are far greater than what is available in the private sector. So while the earnings gap functionally disappears when accounting for factors such as experience and education, total compensation among government workers remains considerably higher than their private-sector counterparts.

When the vastly richer health and retirement benefits, greater levels of job security and more generous paid leave provisions enjoyed by Nevada’s government workers are accounted for, their total compensation can be as much as 57 percent greater than what a private-sector worker performing the same job would receive.

Nevada public pay ranks 5th highest nationwide

Earnings for Nevada’s local government workers also fares well when measured against the earnings for local government workers in other states.

After adjusting the values to reflect the difference in price levels among the 50 states, as calculated and reported by the Bureau of Economic Analysis’ 2016 Regional Price Parities report, the median earnings for local government workers in Nevada were higher than what their government peers earned in 45 other states.

Nevada’s private sector, however, fared much worse, with private-sector earnings that ranked ahead of only 3 other states nationwide:

Table 2: Rank of median earnings for Nevada’s local government and private-sector workers, 2017

This data is instructive when considering SEIU of Nevada’s recent refusal of a proposed 2 percent pay raise from Clark County. The union is instead demanding a 3.25 percent raise, and is now in arbitration over the dispute.

Compensation for government employees consumes roughly two-thirds of Clark County’s general fund budget. On a statewide basis, government pay and benefits cost taxpayers roughly $10 billion last year — which was equal to 80 percent of all tax revenue collected by every state and local government agency in Nevada.

Thus, in the event Nevada’s government pay gap continues its upward growth, the resulting tax hikes necessary to sustain such excess may become too great to bear.

Because such outsized pay packages come at the expense of taxpayers who earn much less themselves, elected officials should consider the fairness and sustainability of continually caving in to government unions’ endless demands for even more.

Of course, the outsized political influence of Nevada’s local government unions makes this extremely unlikely, which is why legislators should extend the prohibition of government-sector collective bargaining to include local agencies, as well as state agencies.

Robert Fellner

Robert Fellner

Director of Policy

Robert Fellner is NPRI’s policy director and joined the Institute in December 2013. Robert has written extensively on the issue of transparency in government. He has also conducted legal research and assisted in crafting legal arguments for numerous public records-related lawsuits, including one which prevailed at the Nevada Supreme Court, resulting in a landmark decision that protected and expanded Nevadans’ rights to access and inspect government records.

An expert on government compensation and its impact on taxes, Robert has authored multiple studies on public pay and pensions. He has been published in Business Insider, Forbes.com, the Las Vegas Review Journal, the Los Angeles Times, RealClearPolicy.com, the San Diego Union-Tribune, the Wall Street Journal, ZeroHedge.com and elsewhere.

Robert has lived in Las Vegas since 2005 when he moved to Nevada to become a professional poker player. Robert has had a remarkably successfully poker career including two top 10 World Series of Poker finishes and being ranked #1 in the world at 10/20 Pot-Limit Omaha cash games.

Additionally, his economic analysis on the minimum wage won first place in a 2011 George Mason University essay contest. He also independently organized a successful grassroots media and fundraising effort for a 2012 presidential candidate, before joining the campaign in an official capacity.