The Hidden Costs of Alabama’s State and Local Workforce
Alabama’s employment ratio is tenth in the country. The state’s compensation rate for state and local employees is nearly 12% higher than employees in the private sector. The state’s pension and retiree healthcare systems are both underfunded by billions of dollars. At some point, these shortfalls must be paid with interest. If they are not, either employee benefits will have to be reduced or taxes raised to make up the difference. There is another way to solve these challenges: grow the private sector. This would boost both employment and paychecks. When pro-growth economic policies – such as fewer regulations, lower taxes, and secure property rights – are pursued, economic development is promoted, allowing private sector businesses to better compensate and hire additional employees. Such policies are win-win for both the private and public sector.