Kalamazoo Times

Kalamazoo Times

Sunday, April 5, 2020

Report: Michigan employee salaries are stagnant but costs of benefits are up

Local Government

By Glenn Minnis | Jan 29, 2020


The cost of employing state government workers in Michigan rose in 2019 despite direct compensation for that group essentially remaining flat over the last decades.

The Mackinac Center for Public Policy primarily attributed the hike to continued growth in benefits for workers.

According to Cap Con, on average the annual cost to taxpayers for each state worker in 2019 jumped by more than $800, or 0.6 percent. In addition, state government payrolls rose to 47,324 workers, an increase of 0.8 percent.

Over the last decade, the real pay of the average state worker increased by only about 3.7 percent, while average employee benefits spiked by nearly 130 percent over the same period, with the main drivers being steadily rising benefit costs in the areas of employee health insurance, contributions to a defined benefit pension system and payments for retiree health care coverage.

With average wages and benefits down last year compared to historic highs, Mackinac Center’s Director of Fiscal Policy James Hohman theorized to Cap Con that costs have probably trickled down due to many older workers at the top of civil service pay scales entering retirement.

In 2001, state employment numbers peaked over the last two decades at 62,057 full-time equivalent employees.

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