"Knowledge will forever govern ignorance

 and a people who mean to be their own governors

 must arm themselves with the power which knowledge gives."

Sunday, February 25, 2007

New Jersey State Worker Union Contact

Based upon news reports, our email inbox and comments left on this blog, there seems to be some confusion about the "fair contract" Governor Jon Corzine negotiated with the state’s union employees. The following information is provided to clear up misconceptions.

Under the new four year union contract, workers are to receive a 3 percent salary increase in years 1 and 2 and a 3.5 percent increase in years 2 and 4. Each year state employees will contribute 1.5 percent of their salary for health and 0.5 percent of salary for pension benefits.

The new contract will result in an 11 percent net increase in wages over the four year period. Using the average salary for a New Jersey State worker in 2006 of $54,742 we have the following example:

Average State Worker Salary
Under New Union Contract

NJ Worker Salary

But, salary is just one component of a worker’s total compensation. Total compensation -- salary plus benefits -- is what really matters to state taxpayers. Whether a tax dollar is spent on an employee’s salary or benefits really doesn’t matter - it’s still a dollar out the taxpayer’s pocket.

Health benefits for active employees are estimated to increase 13 percent annually for the next four years, an increase of 63 percent. (Total health benefit costs for active and retired employees will increase 18 percent annually) Using the average health benefit cost for an active state worker in 2006 of $13,594 we have the following example:

Average State Worker Health Benefit
Under New Union Contract

NJ Worker Health Benefit

Over the four year contract period, the average salary plus health benefit for New Jersey State workers will increase from $68,336 to $83,133, an increase of 21.7 percent.

We will address the pension issue in a separate post.

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9 Comments:

At 11:58 PM, Anonymous Anonymous said...

That's a nice salary and great benefits. Seriously, how do you even spend that much on health care? I buy my own for $175 per month. Will someone tell me how it is government workers are underpaid?

 
At 11:59 PM, Anonymous Anonymous said...

Enlighten - there's an error in your second graph. Looks like you used salaries in the benefits column.

 
At 3:01 PM, Blogger James said...

When only 20% of workers in the private sector are covered with a pension plan, why must tax payers provide all state workers with pensions? If 401K plans are good enough for the private sector why not state workers? My assemblyman, Herb Conaway, says he supports these pensions.

 
At 5:25 AM, Anonymous Anonymous said...

11% pay increase, contribute only 1.5% towards health and a pension. Wow! I find it harder and harder to reach into my pocket every year to pay my taxes in support of the State Workers Union contract when I haven't seen a pay increase in 4 years. I have to pay for 50% of my medical and 100% towards my 401K. Oh yeah, and no profit sharing, since every state worker I talk to thinks every private sector employee gets profit sharing. Your Union has negotiated good contracts from politicians who are more than willing to bankrupt the tax payers for State Employee votes. All I ask is you stop complaining on how tough you have it.

 
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Many Republicans blasted the plan as a shell game intended to boost McGreevey's poll numbers.
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At 2:04 PM, Anonymous sex shop said...

To my mind every person have to read it.

 
At 5:48 AM, Anonymous Guelph Payroll Service said...

It has been in my mind since long that if only 20% of employees in private sectors are covered with a pension plan, why must tax payers provide all state workers with pensions? I found one glitch in the second graph.


 
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