Compensation

Wages and Salaries

Wages and salaries for state and local government workers increased by 3.5 percent for the 12-month period ending September 2025, according to data published by the U.S. Bureau of Labor Statistics. The current value marks the second quarter of wage growth below 4.0 percent, following eleven consecutive quarters of growth exceeding that level. Additionally, this quarter represents the fifth straight period of declining growth in state and local employee wages. The third quarter of 2025 also marks the reversal of a nine consecutive quarter trend in which annualized wage growth for state and local workers was higher than the private sector.

Wages for private sector workers increased by 3.6 percent for the 12-month period ending September 2025, which is the fifth consecutive quarter of annualized growth below 4.0 percent following twelve consecutive quarters above that level.

Annualized Quarterly Change in Wage and Salary Costs
for Private and State and Local Government Employees, 2001-2025

Benefits

The cost of state and local government employee benefits increased by 3.8 percent for the 12-month period ending September 2025, according to data published by the U.S. Bureau of Labor Statistics. This is the ninth consecutive quarter of annualized increase below five percent, following four consecutive quarters at or above that level. The rate of annualized increase in the cost of benefits for private sector workers was 3.5 percent for the same period.

Annualized Quarterly Change in Benefit Costs
for Private and State and Local Government Employees, 2001-2025

Compiled by NASRA based on data provided by the U.S. Bureau of Labor Statistics. Data is sourced from the BLS Employment Cost Index program, which is a quarterly survey of establishments measuring the change in employer costs for labor, independent of employment shifts. The ECI survey reference period is the pay period that includes the 12th day of the month.

See more: https://www.bls.gov/ect/

Become A Member

Becoming a member of NASRA offers a unique opportunity to join a community committed to the sound, efficient, and innovative stewardship of public retirement systems. Membership connects you with a network of professionals and experts, providing valuable insights into managing public retirement systems with a focus on sustainability and risk-averse strategies.

By joining NASRA, you gain the tools and resources to enhance the management of public retirement systems, ensuring their long-term success and reliability for generations to come.

What's New at NASRA: Updated Cost of Living Issue Brief

Cost-of-Living Adjustments (COLAs) play a significant role in public pensions. They help retirees keep up with rising prices, but they also add costs to pension plans. Policymakers and plan sponsors are tasked with balancing three things: benefits adequacy, plan sustainability, and affordability for members and plan sponsors.

The recent increase in inflation caused many policymakers and, in some cases pension trustees, to review how benefits are designed and paid for, including the way COLAs are granted and funded. NASRA’s recently updated issue brief on the lates trends in COLAs is available in the NASRA Research Center.