Compensation

Wages and Salaries

Wages and salaries for state and local government workers increased by 4.1 percent for the 12-month period ending March 2025, according to data published by the U.S. Bureau of Labor Statistics. The current value marks the eleventh consecutive quarter of growth exceeding 4.0 percent , yet it is also notable as the first instance of growth falling below 4.5 percent since Q3 2022. Additionally, this quarter represents the third straight period of declining annualized growth in state and local employee wages. The first quarter of 2025 also marks the eighth consecutive quarter in which annualized wage growth for state and local workers was higher than private sector wage growth. Prior to the second quarter of 2023, the last time this occurred was the first quarter of 2010.

Wages for private sector workers increased by 3.4 percent for the 12-month period ending March 2025, which is the third 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 4.8 percent for the 12-month period ending March 2025, according to data published by the U.S. Bureau of Labor Statistics. This is the seventh 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: Commentary on Short Term Market Volatility and Public Pension Plans

NASRA recently published (April 16, 2025) a commentary on short term investment market volatility and public pensions. Although headlines may focus on daily or weekly market fluctuations, short-term declines should be viewed in the context of public pension funds’ long-term, disciplined approach to investing. Public pension funds are managed with a long-term focus. These funds are overseen by professional investors who follow disciplined strategies rather than reacting to daily market fluctuations. Their portfolios are highly diversified to reduce risk, and most use tools such as asset smoothing to limit the impact of market swings and help maintain stable funding over time.