by James M. Hohman
Mackinac Center for Public Policy
October 22, 2013
Since 2000, the cost of state and local government employment benefits in Michigan has outpaced those typically found in the private sector. The more government spends on these benefits, the less it can spend providing services to Michigan residents. Benchmarking these costs to more closely resemble private sector averages would do much to free up cash to support government services, while simultaneously allowing taxpayers to keep more of their own resources. This analysis of government statistics finds that if the cost of the average benefits package for Michigan government employees was the same as the average in Michigan’s private sector, the state and its subsidiary governments would save $5.8 billion annually. Legislators should continue to financially incentivize local government entities to reduce the costs of their employees’ benefits and more closely aligning them to private sector averages.