The Effects of Comparable Worth in the Public Sector on Public/Private Occupational Relative Wages

If, as appears likely, comparable worth programs are confined to the public sector, the level of public/private relative pay may change, and the structure of public/private relative wages within occupations will almost certainly change. The nature of these changes will determine the degree to which public wages conform more or less closely to the prevailing wage standard which requires that wages for public jobs be equivalent to wages for similar private-sector jobs. Thus, there will be implications for economic efficiency. This study analyzes alternative scenarios involving comparable worth in the state and local government (SLG) sector. The results suggest that when comparable worth is implemented through special wage increases, public-sector wages are moved further from compliance with the prevailing wage standard. This is because public wages are, on average, already on a par with private-sector wages. However, comparable worth tends to provide larger wage increases to those occupations where public/private wages are relatively low. And, when the payroll budget under comparable worth is fixed at the same size as the payroll budget before comparable worth, public wages could be moved closer to compliance with the prevailing wage norm.