In 2014, Andrew Biggs and Jason Richwine wrote a research paper for the American Enterprise Institute examining public sector compensation rates across the 50 states. The paper, titled “Overpaid or Underpaid? A State-by-State Ranking of Public Employee Compensation” ranked the states not on compensation alone, but relative to going rates for private sector standards in each state.
The study put the states in five buckets, ranging from a “modest penalty” for government service (relative to private sector compensation) to a “very large premium.”
The chart below reports the average Truth in Accounting “Taxpayer Burden” measure of state government financial conditions in each of those five buckets. States with relatively well-compensated public sector employees have accumulated significantly higher, not lower, financial burdens for their taxpayers and citizens.
The states in Bucket #5 in the chart above include New Jersey, California, Rhode Island, Illinois, New York, Pennsylvania, and Connecticut.