One of the most important questions individuals have when pursuing a new career is the benefits it will provide. Students who are trying to decide between completing an MPA and an MBA are particularly interested in the difference between public sector benefits and private sector benefits. The differences between these compensation packages, which have been greatly debated in recent years, can help a student decide which path to pursue.
The Need for a Fair Comparison When you are discussing the differences between benefits offered in the public and private sectors, it is important to create a fair comparison. Many people simply look at the salary of a job and determine which one is better based on this fact alone. These jobs often offer other benefits in addition to direct compensation. This includes health insurance contributions, pensions, retirement contributions, and paid time off. As a result, it is important to look at an entire compensation package and its value when comparing the two sectors. Comparing Salaries by the Numbers As you look at the public and private sectors to compare benefits, it is important to consider the statistics in regard to these jobs. Students must determine which types of benefits are available in each sector and how these benefits meet their individual needs. Many jobs offer the following:
- Salary Compensation – The salary is often the easiest factor to see when considering a job. According to the Bureau of Labor Statistics in 2009, public sector jobs paid about $2,400 more than private sector jobs on average. These numbers will vary depending on the career path and a variety of other factors.
- Union Membership – Unions and their pursuit of workers’ rights, wages, and benefits are in the news often. In general, these unions obtain higher salaries and compensation packages for member employees. Union membership is more common in the public sector. Approximately 36.2 percent of public sector employees are members, while just 6.9 percent of private employees belong to unions.
- Retirement Benefits – This is an important benefit for those who are looking toward the future. Public sector benefits often include a traditional pension package. Seventy-nine percent of public sector jobs offer this benefit. Only about 20 percent of private sector employees have a similar plan. Private sector jobs typically offer 401K retirement plans, but not all employers offer contributions to the plan.
- Health Care – Health care is an important factor, especially in light of the health care reform policies. Employees in the public sector are more likely to be offered insurance, both while they work and after retirement, than their counterparts in the private sector. The cost of enrolling in these plans is also lower for public sector employees than those working in the private sector.
- Raise Opportunities – Another major consideration is the opportunity for raises within a career path. Raises in both sectors will vary greatly depending on the current state of the economy. Public sector jobs, though, are more likely to experience budget cuts and reduce or eliminate raises during certain budget periods. Private sectors are not immune to this issue either. If a company experiences a poor profit year, it may also implement budget cuts that affect salaries.
Do These Benefits Mean Public Sector Is Best? While it seems that public sector benefits are clearly better than private sector benefits, public sector jobs are not necessarily the better choice for everyone. Students who earn an advanced degree are typically able to earn more money if they work in the private sector than if they work in government positions. This fact also makes it more difficult to compare jobs in each sector. Many employers, both private businesses and government agencies, must put together the most appealing package to attract qualified candidates to the jobs that are available. It is then up to potential employees to determine whether they want a higher salary rate or better benefits. Choosing your career path before you earn an advanced degree is important to ensure you choose the right degree program. Whether you pursue an MBA or an MPA should involve deciding what type of work you would like to perform and the type and amount of compensation you expect to receive. Both the public and private sectors have their own advantages and disadvantages. Taking a close look at the public sector benefits versus the private sector benefits can help you choose the best advanced degree program for you.