Public v. Private Sector: Income Differences in New Mexico

As New Mexico’s dismal economy struggles towards recovery and the 2013 legislative session heads toward a conclusion, the issue of pay for public employees has remained prominent. Given the fact that the Legislature hasn’t provided an across-the-board pay raise for public employees since 2008, there is a push under way to increase government employee pay. New Mexico is one of the poorest states in the country.

Its economy has continued to shed jobs while neighboring states have been adding them. Nonetheless, nearly twenty percent of the state’s workforce is fueled by tax payers and those in the public sphere continue to assert that they make significantly less than those in the private industry.

This report examines this assertion by analyzing government data to determine the earnings and compensation differences among employees of similar characteristics, skill sets, and occupations within the public and private sectors. Regression analysis has been used to produce a careful analysis of data on both total compensation and benefits. The study finds that with benefits included, public workers in New Mexico make over 8 percent more in total compensation than a similar worker in the private sector.