Investing in State Employees Will Grow Maine’s Economy and Address the Gender Pay Gap

A busy legislative session wrapped up with an urgent issue unresolved: the future of public sector work in Maine. After years of being underpaid and working in unprecedented conditions during the COVID-19 pandemic, state workers like health inspectors, park rangers, and other public servants are negotiating for raises commensurate with their value and dedication. By meeting these workers’ needs, the Mills administration has a rare opportunity to simultaneously accomplish three important goals: invest in vital public services, address the gender pay gap, and grow Maine’s economy.

State workers are significantly underpaid

In November 2020, the Maine Department of Administrative and Financial Services (DAFS) published a study comparing the earnings of public and private sector workers across New England and found Maine State workers are paid 15 percent below the market average. Compared to only their public sector counterparts, Maine’s workers are paid 11 percent below the average. Put another way, Maine’s Executive Branch employees would have to work nearly six weeks longer to earn as much as public servants elsewhere in New England.1

Additionally, the study found that of the 82 benchmark job titles for which there was sufficient market data, 63 percent are below the market average.

Among the most underpaid job groupings are Legal (in which the median wage is 70% of the market average), Other Technical and Professional (76%), Information Technology (78%), Human Resources (78%), Corrections (79%), Administrative Support (81%), Engineering (82%), and Social Services (83%).

These findings follow a long history of State employees being underpaid, dating back to at least 2008. In 2009, the Department of Administrative and Financial Services engaged a consulting group to conduct a survey comparing state employees’ compensation to their counterparts in Maine’s private and private sector. That report found Executive Branch workers were paid between 7.5 and 21.7 percent less than in the private sector.

Each year between 2009 and 2019, workers received no or modest wage increases with an overall raise of 10.4 percent for the decade. During the same period, the overall rate of inflation was 18 percent, meaning workers’ real wages actually shrank. Over the decade, Maine’s inflation-adjusted GDP grew by 10.8 percent while State workers’ purchasing power declined.2

The State’s role in narrowing the gender pay gap

The gender pay gap in the United States is 83 percent, with the median woman worker paid 83 cents for every dollar a man is paid. Over a lifetime, the average woman will lose more than half a million dollars to the gender wage gap. Since the pay gap exists both within and between occupations, addressing this inequity requires both raising wages in women-dominated industries and eliminating pay gaps within workplaces and job classifications. Unions have shown promise in narrowing the underpayment of women; the gender pay gap among unionized workers is 88.7 percent compared to 81.8 percent for people in non-union jobs.3

Women have long been overrepresented in public sector work. While this has offered many a pathway to the middle class, research has shown that as women’s participation in a particular occupation rises, pay within that occupation falls, which some have attributed to the devaluation of women’s work.4

Nationally, in 2019 women accounted for 48.4 percent of the workforce but 60.2 percent of state and local government employees. In Maine, the share of women in state and local government was above the national average, with women representing 60.6 percent of workers. And women in Maine make up a higher share of state employees, 58.7 percent, than the national average of 57.7 percent.5 Altogether eliminating the gender pay gap requires a comprehensive approach, and one important method is to raise pay in women-dominated industries like the public sector.

Maine can set a standard for a high-road economy — instead, it has done the opposite

The State of Maine is not only a provider of vital public services but also our largest employer, with around 30,000 workers. The State additionally impacts job standards through its purchase of goods and services, for example in the care economy. This government therefore has a responsibility to not only provide high-quality services, but also to set a high standard in the labor market by offering compensation that is competitive with the private sector. Unfortunately, the State has long underpaid its staff, depressing standards for all workers in Maine.

A historic opportunity to lift up Maine workers

On July 20, the Mills administration announced a $224 million deposit into the State’s Rainy Day fund, bringing the total to a historic high of nearly $500 million.6 One day earlier, the legislature passed a bill to increase the limit on transfers from the State’s salary plan to $30 million in fiscal year 2021-22 and to $45 million in FY 2022-23, and noted that the unobligated balance in the salary plan is $81 million. It appears the State has the resources to provide its public servants a significant raise.

State employees have been underpaid for more than a decade and as a result Maine’s economic prosperity has been shortchanged. The Mills administration has a historic opportunity to change course by investing in the State’s capacity, narrowing the gender pay gap, and helping to grow Maine’s economy as we emerge from the COVID-19 recession.


Notes:

[1] State of Maine, Market Study Report, November 20, 2020, available at https://www.maine.gov/bhr/sites/maine.gov.bhr/files/inline-files/Update%20to%20SLG%20on%20DAFS%20Compensation%20and%20Classification%20Effort%2002%2010%202021.pdf

[2] 2009 Labor Market Survey available at http://mseaseiu.org/forms/2009CrescendoConsultingLaborMarketSurvey.pdf. Wage history provided by Maine State Employees Association. Inflation figures from Bureau of Labor Statistics, CPI for All Urban Consumers, Northeast, January 2009 to January 2019, https://data.bls.gov/timeseries/CUUR0100SA0. Real Gross Domestic Product: All Industry Total in Maine, January 2009 to January 2019, https://fred.stlouisfed.org/series/MERGSP

[3] See “What is the gender pay gap and is it real?” Elise Gould, Jessica Schieder and Kathleen Geier, Economic Policy Institute, October 20, 2016, available at https://www.epi.org/publication/what-is-the-gender-pay-gap-and-is-it-real/

[4] “Occupational feminization and pay: Assessing causal dynamics using 1950-2000 U.S. Census data,” Asaf Levanon, Paula England, Social Forces, December 2009, Vol 88, No. 2, pp 865-891. https://nyuscholars.nyu.edu/en/publications/occupational-feminization-and-pay-assessing-causal-dynamics-using

[5] Maine Center for Economic Policy calculations using U.S. Census Bureau’s American Community Survey 1-year estimates, 2019.

[6] ” Governor Mills Announces Rainy Day Fund Has Grown to Historic High of $491.9 Million,”

July 20, 2021, available at https://www.maine.gov/governor/mills/news/governor-mills-announces-rainy-day-fund-has-grown-historic-high-4919-million-2021-07-20