Is Local Government Feeling the Pinch From Labor Costs?

The Bureau of Labor Statistics on July 29ths the latest figures on the Employment Cost Index(ECI) for state and local government workers. Focusing on state and local government, a modest 3.4% increase in total compensation(wages, benefits, salaries) between June 2021 and June 2022. The largest increases in year over year compensation costs came among service workers, health care and social assistance, and public administration.

The figure above and corresponding data are at the national level. Minnesota also showed an increase of 3.02% in government wages between Q1 2021 and Q1 2022 – slightly below the increase of the national average.   In the MN Metro, wages and salaries  for all workers grew by 5.0% during the same period.  While public sector employment costs, included wages and benefits, has shown only modest growth through this period of high inflation, the private sector has assumed greater employment costs, potentially making private industry more competitive within the shrinking available labor pool.

With Minnesota’s total unemployment rate at 1.8%, both public and private sector organizations are feeling the pressure to attract more workers. Is your organization staying competitive in attracting labor? Interested in learning more about where your city, county or organization stands in comparison to your peers? Reach out for a free consultation so that we may enable you to attract and retain high quality candidates and staff.