Public Pay

California, Texas, and State Workers' Pay


California's prison guards make more than twice their counterparts in Texas—$71,000 a year, compared with $31,000. That difference is true for state workers in general: While in 2009 the average private-sector worker in California made 12.5 percent more than in Texas, the disparity among state workers was 25.2 percent, according to Commerce Dept. figures. The difference underlines the benefits—and taxpayer costs—of working in a union-friendly state and may help explain why California has more intractable fiscal difficulties than Texas. Although Texas has a budget deficit of $4.3 billion this year, it has the second-highest credit rating from Standard & Poor's (MHP). California has the lowest rating of any state and is struggling to close a deficit of $15.4 billion this year.

The difference in state worker pay can be explained in part by California's cost of living, which is almost 15 percent higher than in Texas. Yet the power of collective bargaining is even more important, says Oran McMichael, a longtime labor organizer in Texas. Excluding court and legislative employees, unions represent 85 percent of all state workers in California, says Lynelle Jolley, a spokeswoman for the state's Personnel Administration Dept. While Texas doesn't have figures for its employees in unions, the proportion is probably less than 10 percent, State Auditor John Keel says.

Higher pay means higher pensions. Texas' retired teachers get an average of $18,372 a year, compared with $25,440 for teachers in California. The average stipend for retired state employees in Texas rose 3.9 percent in the five years through fiscal 2010; in California it jumped 32 percent from 2004 to 2009, according to the largest pension plans in both states.

The contrasting experiences of Texas and California may provide lessons for states such as Ohio, New Jersey, and Wisconsin, where Republican governors have focused on curbing employment costs to hold down taxes while balancing budgets. State workers in both California and Texas are being targeted for cuts, though the pressure is more intense in the former. State employees there haven't received an across-the-board raise since 2009 and are now required to take one unpaid day off each month, says Jolley.

The higher pay, however, makes for a more consistent workforce. California's 10 percent turnover rate for prison guards is about half the level it is in Texas. "Our people view their work as a career, not just as something to have until something better comes along," says Ryan Sherman, a spokesman for the California Correctional Peace Officers Assn. in Sacramento.

The bottom line: California, where most public employees are covered by unions, faces a higher pension and salary burden than Texas.

Mildenberg is a reporter for Bloomberg News.
Nash is a reporter for Bloomberg News in Los Angeles.

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