Compensation Analysis: California Correctional Peace Officers Bargaining Unit 6

Govern For California

· January 6, 2022

Govern For California

· January 6, 2022

Conducted for Govern For California by Don Boyd, Boyd Research

Summary

This report examines the compensation of California state correctional officers relative to several other groups. It examines wages in detail because of the richness of available data. It examines benefits in less depth because available data are far less comparable and detailed.

California state correctional officer wages

California state correctional officer wages are the highest in the nation by far. The average California state correctional officer wage in 2020 of $88,710 was more than 20 percent above the $72,990 average wage in the next-highest state, Massachusetts, and more than double the $43,800 median across all states.

After adjusting for cost-of-living differences, California remains the highest-wage state for correctional officers, but the differences are not as large. Its adjusted wages are 13.5 percent above the second highest state, Rhode Island, and 18 percent above Massachusetts, which slipped to third highest after adjustment. Cost-of-living-adjusted wages were 51 percent above the United States average.

Using statistical methods to control for differences in education, experience, and other demographic factors, California correctional officer wages are about 55 percent higher than national average correctional officer wages (including California in the average) and 57 percent higher than other states. The next-highest state, Massachusetts, is 45 percent higher than the national average. Within California, state correctional officer wages are about 17 percent higher than federal and local government correctional officer wages.

Making comparisons to workers in other occupations and in the private sector is important but more challenging. It is difficult to measure the danger associated with correctional officers’ jobs. According to the U.S. Bureau of Labor Statistics, in the five years ending in 2019 state correctional officers in the United States were subject to an annual average of 74.5 incidents per 10,000 workers (0.745 percent) of intentional injury caused by another person that resulted in days lost from work. By this measure, they ranked 16th-highest out of the hundreds of occupations for which data was available. Occupations with higher rates of intentional injury were mostly government jobs, including psychiatric technicians and aides, bus drivers, teaching assistants, and nurses and nursing assistants. It is not easy to compare the severity of injuries suffered by correctional officers to these other occupations. By a broader measure of danger including accidental injuries and illnesses, state correctional officers ranked 24th-highest, with laborers, welders, cooks, and flight attendants having higher rates of injury and illness.

It was not practical in this analysis to control statistically for job danger, but it is possible to control for worker education, experience, and demographic factors so that policymakers may ask the question, “Are state correctional officers paid enough to compensate for the danger we believe their jobs entail and the skills and attitudes they need?”

Using the same statistical methods as above, which do not attempt to control for job danger or special characteristics required of correctional officers, California state correctional officer wages were 26 percent higher than wages of other California public and private-sector workers in the Law, Public Safety, Corrections, and Security cluster of occupations, and 42 percent higher than wages of California private sector workers in occupations where workers have similar education, experience, and demographic characteristics as state correctional officers.

These results are summarized in the figure below. Additional details are included in the body of the report.

California state correctional officer benefits

Pension benefits

Pensions are the largest benefit for correctional officers. The figure below summarizes the present value at retirement of net retirement income for an illustrative worker under alternative retirement policies: three recent correctional officer plans in California; new-hire plans in the highest-wage state (Massachusetts), the highest-wage neighboring state (Oregon), and the largest nearby state (Texas); and a private sector worker without a defined benefit plan but with an employer-subsidized defined contribution plan. Pension benefits, Social Security benefits, and DC plan assets are net of the present value of employee contributions. (See the body of the report for additional details.)

The net present value of retirement income is highest by far under the pre-2011 California Peace Officer / Firefighter (PO/FF) A plan that is no longer available to new correctional officers. Correctional officer plans were scaled back considerable for officers hired under the PO/FF B between 2011 and 2013 and scaled back further under the Public Employees’ Pension Reform Act of 2013 (PEPRA). Nonetheless, even PEPRA benefits are higher than those of the other scenarios in the table, and more than twice as high as the Texas defined benefit pension and the private sector defined contribution plan.

The main reason the present value of the California PEPRA benefit is higher than Oregon or Texas is because the initial benefit is higher; the main reason PEPRA is higher than Massachusetts is because the Massachusetts COLA only applies to the first $13,000 of pension income.

These results are for just one illustrative individual. Results for other workers will vary depending on factors such as when the worker retires and how long he or she lives. However, for most hypothetical workers examined the results were similar to those shown here. One exception was for a new-hire correctional officer who retires at age 50. In this case the PEPRA reduction for early retirement meant that the Oregon pension was almost as great as the PEPRA pension; because the Oregon worker receives Social Security and the California correctional officer does not, total net retirement income for the Oregon correctional officer exceeded that of the California officer.

Health benefits

Comprehensive data for employee health benefit costs are not available. However, rough estimates based on the BLS Employer Costs of Employee Compensation survey suggest that state and local government costs for health insurance in the Pacific region could be about a third higher than costs of large firms in the region. Data from the State Controller on 24,359 state correctional officers put the state’s average health benefits contribution at $16,166 per employee per year, and the median contribution at $19,151.

Only about a fifth of large employers that offer employee health benefits also offer retiree health benefits. The state will pay up to 80 percent of the cost of an individual or family health plan for retired Bargaining Unit 6 members, assuming they meet eligibility and service requirements. Retirees hired in 2017 or later are eligible for 50 percent to 100 percent of the state contribution, depending on length of service. In 2020, the state contribution amounts ranged from $9,204 (annualized) for one-party coverage (the largest coverage group) to $22,416 for family coverage.

Overall conclusions

California state correctional officer wages, after adjusting for cost-of-living differences and controlling for educational attainment, experience, and demographic characteristics, are more than 50 percent above the national average for state correctional officer wages, about 17 percent above California wages for local and federal correctional officers, 26 percent above California wages in the Law, Public Safety, Corrections, and Security occupational cluster, and 42 percent above California wages for other occupations where workers have similar education, experience, and demographic characteristics.

Employee health benefits average about $16,100 per employee and appear from limited data to be about a third higher than private sector health benefits. Retiree health benefits are offered only by about a fifth of large private sector firms that offer employee health benefits. The state will pay up to 80 percent of the cost of an individual or family health plan for retired Bargaining Unit 6 members, assuming they meet eligibility and service requirements. In 2020, the state contribution amounts ranged from $9,204 (annualized) for one-party coverage (the largest coverage group) to $22,416 for family coverage.

How competitive are California state correctional officer wages?

This report uses three main sources of data on wages: (1) Occupational Employment and Wage Statistics (OEWS) from the U.S. Bureau of Labor Statistics (BLS); (2) American Community Survey (ACS) Public Use Microdata Sample (PUMS) 2019 5-year file from the U.S. Bureau of the Census; and (3) Government Compensation in California (GCC) data files from the State Controller’s Office website. For more detail, see the appendix.

Each data source has its best uses. The OEWS is most useful for describing how wages differ across states and occupations. The ACS has data on individuals and their characteristics and is helpful for explaining why wages differ. The GCC data provide total wages broken down by regular pay, overtime pay, lump sum pay, and other pay. It has a more comprehensive definition of total pay, and presumably is more accurate than the other sources.

Table 1 shows number of workers represented by each data source and average wages in 2020. The OES and GCC data include full and part-time workers. The ACS sample is limited to full-time workers.

Table 1 — Different data sources tell us different things

Comparisons to state correctional officers in other states

Figure 1 — Average California state correctional officer wages in 2020 were more than 20% above the next-highest state and more than double the median

California correctional officer wages have been persistently higher than the U.S. average, other high-wage states, and neighboring states. They were roughly 20 percent above the next-two-highest states in 2020, Massachusetts and Rhode Island, and also about 20 percent above in 2012 [1]. California correctional officer wages ranged from 52 to 92 percent above neighboring states in 2012, and from 36 percent to 111 percent above in 2020. (Table 2)

Table 2 — California correctional officer wages have been persistently higher than the U.S. average, other high-wage states, and neighboring states

Adjusting for cost-of-living-differences

One reason that wages in California are higher than elsewhere is because California has a high cost of living. According to the U.S. Bureau of Economic Analysis, in 2020 prices for goods and services were 10.4 percent higher in California than the U.S. average, reflecting housing service prices that were 60 percent above average, and prices for other goods and services that were much closer to the national average [2].

After adjusting for cost-of-living differences, California remains the highest wage state for correctional officers, but the differences are not as large. Its adjusted wages are 13.5 percent above the second highest state, Rhode Island, and 18 percent above Massachusetts, which slipped to third highest after adjustment. (Table 3.)Table 3 — California has the highest state correctional officer wages even after adjusting for cost-of-living differences

Controlling for worker characteristics

Even after adjusting for state cost of living, other factors could help explain differences across states. For example, workers with higher experience usually are paid more in part because they may be more productive, and workers with more education also may be paid more.

Table 4 shows average experience and education of state correctional officers for the states in Table 3 other than Alaska and Rhode Island, which had too few observations, plus the United States average, from the American Community Survey.

California correctional officers have 1.5 more years of experience than the U.S. average but less experience than four of the high-wage states in the table. California correctional workers on average have less education, measured by the percentage with an associate degree or higher, than five of the seven other high-wage states in the table, and less than the U.S. average. These two factors cut in opposite directions: greater experience than the U.S. average might lead us to expect higher cost-of-living-adjusted wages for California correctional officers, and lesser educational attainment might lead us to expect lower wages.Table 4 — California correctional officers have more experience and slightly less education, on average, than the average state

One way of taking differences in education, experience, and other important factors into account is to estimate, statistically, how wages compare after controlling for these factors. Figure 2 displays the results of such an analysis, using data from the American Community Survey for 9,187 correctional officers in the United States. The figure shows the percentage by which each state’s correctional officer wages are above or below the U.S. average, after adjusting for cost of living and controlling for these factors. States with fewer than 50 observations are combined into a single group. (Methodological details are provided in an appendix.)

Figure 2 shows that even after adjusting for cost-of-living differences and controlling for differences in education, experience, and other demographic factors, California correctional officer wages are 55 percent higher than U.S. average correctional officer wages [3]. The next-highest state, Massachusetts, is 45 percent higher than the national average. When compared to the average for other states (i.e., excluding California) rather than to the United States average, California state correctional officer wages are 57 percent higher (not shown in figure).

Figure 2 — California state correctional officer wages are 55% above the U.S. average state correctional officer wage after controlling for cost-of-living differences, experience, education, and other demographic factors

Comparisons to federal and local government correctional officers in California

It is also useful to compare wages within California of correctional officers employed by the state government, local governments, and the federal government. Table 5 shows the results of this comparison, controlling for education, experience, and demographic characteristics. Wages are adjusted for within-California regional cost-of-living differences using the U.S. Bureau of Economic Analysis’s regional price parities.

There are 1,360 California correctional officers in the analysis (790 state, 467 local, and 103 federal) [4]. After adjusting and controlling as described, the state government premium is 16.5 percent compared to local government correctional officers and 17.7 percent compared to federal local government correctional officers. In other words, a state correctional officer would earn about $116.50 for each $100 earned by a local correctional officer with similar education, experience, and other demographic characteristics, and $117.70 for each $100 earned by a federal correctional officer with those characteristics. The average California state correctional officer wage premium relative to California local and federal government correctional officers is 17.1 percent.

Table 5 — California state correctional officer wage premium vs. federal and local correctional officers

Comparisons to other occupations

Comparisons to public sector correctional officers are not sufficient. If correctional officer wages were high everywhere relative to what workers could earn in the private sector, comparisons solely to other states’ correctional officer wages would not reveal this. It is important for governments to consider the broader labor market when setting wages in collective bargaining agreements.

The following sections compare California state correctional officers to those of two broader groups of workers in California: public and private sector workers in the Law, Public Safety, Corrections & Security job cluster, and California private sector workers in occupations with workers who have similar characteristics to state correctional officers.

Before discussing these comparisons, we discuss challenges in comparing correctional officer wages to those of other occupations.

Challenges in comparing correctional officers to other occupations

While comparisons to the private sector are important, they are particularly challenging in the case of correctional workers. These jobs are more dangerous than average, and possibly more stressful as well. In addition, they may require dispositions and physical condition not required in other occupations. There are no strictly comparable jobs in the private sector. While there are private sector prison guards, there is not enough data on these workers for statistical analysis.

It is important to try to understand differences between correctional officer jobs and other jobs.

Danger and risk of injury

While correctional officer jobs are more dangerous than typical jobs, there do not appear to be any comprehensive definitions or measures of job danger. However, the U.S. Bureau of Labor Statistics (BLS) collects data on nonfatal injury and illness cases requiring days away from work [5]. While some of the data are state-specific, comprehensive data for correctional officers and other state and local government employees are only available for the nation as a whole.

The BLS data include occupation-specific data on broad categories of injury and illness including accidents, sickness, chemical exposure, and other dangers, and on subcategories including intentional injuries caused by another person, which may be of particular concern for correctional officers. Because injury and illness rates can shift substantially from year to year due to small numbers of cases reported, I have averaged them over five years.

In the five years ending in 2019 state correctional officers in the United States were subject to an annual average of 74.5 incidents per 10,000 workers (0.745 percent) of intentional injury caused by another person that resulted in days lost from work. By this measure, they ranked 16th-highest out of the hundreds of occupations for which injury data were collected. Occupations with higher rates of intentional injury were mostly government jobs, including psychiatric technicians and aides, bus drivers, teaching assistants, and nurses and nursing assistants. It is not easy to compare the severity of injuries suffered by correctional officers to these other occupations. (Table 6.)

Table 6 — Intentional workplace injuries caused by another person

By a broader measure of danger including accidental injuries and illnesses, state correctional officers ranked 24th-highest, with laborers, welders, cooks, and flight attendants having higher rates of injury and illness. On the other hand, the state correctional officer injury and illness rate was about 5 percent lower than the rate for local police and sheriff’s patrol officers, and 20 percent or more lower than rates for many occupations that involve handling potentially dangerous tools or equipment. (See Table 12 in the appendix.)

Other job and worker characteristics

Injury and illness rates measure only one aspect of workplace difficulties. There may be other elements of correctional officer jobs that are especially stressful or dangerous but that do not necessarily result in workplace injuries. Unfortunately, there do not appear to be good measures of elements relating to stress.

In addition, correctional officers may need to have characteristics not required in other occupations. For example, the California Department of Corrections and Rehabilitation states that it seeks, among other things, leadership ability, courage, strength, endurance and agility, alertness, willingness to work night shifts, weekends, and holidays and to report for duty at any time emergencies arise [6]. On the other hand, other occupations may require characteristics not required of correctional officers.

Addressing these issues

It is difficult to measure or control for occupational dangers or special characteristics of individual occupations. But it makes sense to control for characteristics that can be controlled for, making it easier for policymakers to consider the question, “Are state correctional officers paid enough to compensate for the danger their jobs entail and the expertise their jobs require?”

Comparisons to California workers in the Law, Public Safety, Corrections & Security job cluster

This section compares California state correctional officers’ wages with wages of California public and private sector workers in the Law, Public Safety, Corrections & Security career cluster defined by Advance CTE, a national non-profit organization that represents state career and technical education (CTE) directors and other CTE state officials. This career cluster is focused on planning, managing, and providing legal, public safety and protective services and homeland security, including professional and technical support services. (See the appendix for details.)

The comparison group is defined as workers in this career cluster with the following changes: (1) I excluded lawyers, judges, and law clerks because they generally require different background, education, and experience than correctional officers, (2) I excluded workers in supervisory positions because the correctional officer category does not include supervisors, and (3) I collapsed occupations with fewer than 50 workers into an all-other group. The sample includes 7,491 observations. Approximately 60 percent of the observations are for public sector workers and 40 percent are for private sector workers.

Using the same statistical methods as above, which do not attempt to control for job danger or special job requirements, California state correctional officer wages were about 25 percent higher than average wages of California public and private-sector workers in the Law, Public Safety, Corrections, and Security cluster of occupations. (Figure 3.) State correctional officer wages were 26 percent higher than the average of other occupations (excluding state correctional officers).

Figure 3 — Correctional officer premium relative to average wages for public and private sector jobs in the Law, Public Safety, Corrections & Security job cluster

Comparisons to California private sector workers in jobs with similar worker characteristics

Because 60 percent of the Law, Public Safety, Corrections & Security career cluster is public sector workers, it is useful to create a broader comparison of private sector occupations with workers who are similar in important ways to state correctional officers.

To do this I used a clustering methodology that grouped occupations in California by similarity of characteristics of their workers, including education, age, marital status, and gender. This resulted in a cluster for state correctional officers that included 38 occupations in a sample of 21,300 workers. (See the appendix for details.) Table 7 summarizes information for this cluster.

Table 7 — Selected characteristics of California state correctional officers to private-sector workers in the job cluster

Using the same statistical methods as above, California state correctional officer wages were about 41 percent higher than average wages of California private-sector workers in the cluster. Table 8 shows the top 10 occupations ranked by the extent to which their wages are above average for the cluster, after controlling for education, experience, and demographic characteristics. (All 38 occupations are shown in the appendix.) State correctional officer wages were 42 percent higher than the average of other occupations when state correctional officers are excluded from the average.

Table 8 — California state corrections officers have the 4th-highest wage in their job cluster, after controlling for education, experience, and demographic factors.

Summary of regression results for wages

Figure 4 summarizes key results from the wage regressions and Table 9 provides additional details. Note that this table displays a California state correctional officer wage premium relative to other occupations in the comparison group, rather than to all occupations. (For example, in the second row, the premium is calculated relative to federal and local government correctional officers, excluding state governmental officers.)

Figure 4 — California state correctional officer wage premium relative to selected other groups of workers

Table 9 — California state correctional officer wages are substantially greater than those of all examined comparison groups

How competitive is California state correctional officer non-wage compensation?

Pension benefits

Comparing pension benefits across employers is difficult because pension benefit calculations are complicated. For example, some defined benefit plans require workers to contribute, and some do not, and some workers do not benefit from Social Security while others do.

In this section, I examine retirement income of a hypothetical worker who begins work at age 25, retires at age 57 with a final salary of $100,000, and lives until age 85. I examine the worker’s retirement income under the following scenarios:

Three California correctional officer situations:

PO/FF A: Peace Officer / Firefighters plan for employees hired prior to January 15, 2011,
PO/FF B: Peace Officer / Firefighters for employees first hired on and after January 15, 2011 and prior to January 1, 2013, and
PEPRA PO/FF: The PEPRA (Public Employees’ Pension Reform Act of 2013) current plan for new hires, applicable to employees eligible for CalPERS membership for the first time on and after January 1, 2013.

Newly hired correctional officers in:

Massachusetts, the highest correctional-officer-wage state,
Oregon, the highest correctional-officer-wage neighboring stat, and
Texas, the largest nearby state
A private sector worker without a defined benefit plan but with an employer-supported defined contribution plan.

Table 10 shows key assumptions for each situation analyzed. In some cases, these are simplifications of more-complicated plan provisions, but the goal was to capture faithfully the key elements of each scenario. Note three important features of the California retirement plans: (1) employee contributions are relatively high, (2) employees do not participate in Social Security, meaning they do not pay Social Security during their working years and do not collect Social Security benefits in retirement, and (3) earlier California state correctional officers benefited from a 2 percent employer contribution to a defined contribution plan, although current correctional officers do not.

	Defined benefit	Employee contributions to pension plan	Social security	Employer-supported DC plan
California PO/FF A	3% at age 50 2% COLA	11% on wages above $10,356	no	2% employer contribution assume 5% returns
California PO/FF B	2.5% at age 55	12% on wages above $10,356	no	2% employer contribution assume 5% returns
California PEPRA	2.5% at age 57 2% COLA after 2 years	13% on wages above $10,356	no	no
Massachusetts new hire	2.5% at 57 3% COLA on first $13k if legislature grants	11%	no	no
Oregon new hire	1.5% at age 65 1.25% up to $60k, not compounded	None	yes	no
Texas new hire	2.3% at 64 no COLA	10%	yes	no
Priavte worker	n/a	n/a	yes	assumes 6% employer contribution, 6% employee, and 5% investment returns

Table 10 — Key assumptions for modeled retirement arrangements

In addition to these plan-specific assumptions, I assumed two percent inflation for COLA calculations, and I incorporated major elements of Social Security calculations including tax rates and benefit rules. I discounted pre-retirement employee pension and Social Security contributions and in-retirement pension and Social Security benefit payments to 2021 at a four percent discount rate.

Note that the calculations assume wages for workers in different scenarios are the same. If the calculations were done assuming a California correctional officer wage premium, as was found in previous sections, the retirement income of California correctional officers, relative to the alternatives in the table below, would be considerably greater.

The key results are shown in Figure 5. Additional details are provided in Table 11.

Figure 5 — Present value of net retirement income for an illustrative worker

Table 11 — Present value of retirement income for an illustrative worker

The net present value of retirement income is highest by far under the pre-2011 California Peace Officer / Firefighter (PO/FF) A plan that is no longer available to new correctional officers. Correctional officer plans were scaled back considerably for officers hired under the PO/FF B between 2011 and 2013 and scaled back further under the Public Employees’ Pension Reform Act of 2013 (PEPRA). Nonetheless, even PEPRA benefits are higher than those of the other scenarios in the table, and more than twice as high as the Texas defined benefit pension and the private sector defined contribution plan.

Health care benefits

Employee health insurance

Unlike defined benefit pension plans, nearly all large firms offer health benefits to at least some of their employees [7]. However, health insurance payments by state and local governments generally are much higher than payments by private sector employers. Detailed data for states are not publicly available, but according to the BLS Employer Costs for Employee Compensation survey, nationally in September 2021 average state and local government employer cost for health insurance per hour worked was $6.12 ($12,730 for 52 40-hour weeks), compared to $2.64 for private sector employers ($5,491 annualized) [8].

BLS breaks the private sector data (but not the government data) down by region: private sector employer health insurance costs in the Pacific Division were about 19 percent higher than the national average, or about $6,510 per employee, annualized. Costs for large employers are higher than the overall average: We don’t have regional breakdown but nationally the cost for insurance of employers with 500 or more employees was 76 percent higher than the average for all private employers. Absent additional data, we might estimate that costs for large private employers in the Pacific Division – possible competition for California state government employees – were about $11,460 for the average worker ($6,510 plus a 76 percent premium for large firms).If, like private sector costs, governmental costs in the Pacific Division also were about 19 percent higher than the governmental national average (the data are not broken down in enough detail to tell us this), annualized state and local government costs per employee would be about $15,100, or about a third higher than private sector large-firm Pacific Division costs.

California costs for state correctional officers appear to be higher than this estimate of a Pacific Division average. Data from the State Controller on 24,359 state correctional officers put the state’s average health benefits contribution $16,166 per employee per year, and the median contribution at $19,151 [9].

In any event it seems reasonable to conclude that California costs for state correctional officer employee health insurance are about a third higher than costs in the private sector.

Retiree health insurance

Retiree health care and related benefits are commonly called “Other Post-Employment Benefits,” or OPEB, which is accounting terminology for benefits, other than pension benefits, provided in retirement. Employer-subsidized retiree health insurance is common in the public sector, but increasingly rare in the private sector. Approximately 18 percent of large private employers that offer health benefits to employees also offer retiree health benefits. By contrast, 56 percent of large state and local government employers offer these benefits [10].

The state will pay up to 80 percent of the cost of an individual or family health plan for retired Bargaining Unit 6 members, assuming they meet eligibility and service requirements. To be eligible for an employer contribution toward retiree health benefits, Bargaining Unit 6 members hired in 2017 or later must serve for at least 15 years, which will entitle them to 50 percent of the state contribution (as long as they meet other requirements). The share rises to 100 percent for these retirees who have 25 or more years of service [11]. In 2020, the state contribution amounts ranged from $9,204 (annualized) for one-party coverage (the largest coverage group) to $22,416 for family coverage [12].

California has embarked on a program under which it seeks to have employees contribute (during their working years) 50 percent of the normal cost of retiree health benefits [13] [14]. According to the current contract, by July 2018 the employee share would be 4.0 percent. The Personal Leave Program of 2020 suspended employee pre‐funding contributions [15]. Under the current proposed agreement, payments would resume. The proposed agreement includes other provisions that would increase compensation [16].

Conclusion

Appendix

Data on wages

Occupational Employment and Wage Statistics

The U.S. Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) program produces annual employment and wage estimates for nearly 800 occupations for the nation, individual states, and metropolitan nonmetropolitan areas [17]. These data are collected in a large survey of employers based on their payroll records, in a cooperative program with state labor departments. OEWS data were a major element in the last compensation study of Bargaining Unit 6 conducted by the California Human Resources Department (CalHR) [18]. I use a research version of the OEWS that allows me to distinguish wages of state government, local government, and federal government correctional workers.

OEWS wages include straight-time gross pay but not premium pay. For example, they include regular pay, hazard pay, and incentive pay. They do not include overtime pay, uniform allowances, or shift differentials [19]. These data are useful for describing how correctional officer wages compare across states and how they compare to other occupations within California. Because OEWS wages do not include information on characteristics of individual workers, they cannot explain why wages differ across states and occupations.

American Community Survey (ACS) Public Use Microdata Sample (PUMS)

The American Community Survey (ACS) Public Use Microdata Sample (PUMS) has data on demographic characteristics, place of residence, occupation and income, and other important individual and household characteristics of individuals in the United States [20]. The ACS survey is conducted primarily by mail and relies primarily on self-reported data. I use the ACS 2019 5-year PUMS, which is a sample of approximately 15 million individuals (I use a subset of individuals who are workers). Wages include total money earnings received for work as an employee, including wages, salary, Armed Forces pay, commissions, tips, piece-rate payments, and cash bonuses earned before deductions were made for taxes, bonds, pensions, union dues, and other cash items [21].

Because the ACS PUMS has detailed characteristics of individuals, it is helpful in examining why wages differ across occupations and locations.

California State Controller’s Government Compensation in California website

The California State Controller’s Government Compensation (GCC) in California website includes unaudited data collected from individual state government departments, from their payroll systems [22]. GCC provides anonymized individual-level data on regular pay, overtime pay, lump sum pay, other pay, and total wages for individuals in state departments and other governmental entities. GCC data also provide useful information on government contributions for benefits. The data include full-time and part-time employees and do not provide an ability to distinguish between them; as a result, calculations of average pay per employee will understate what the average full-time employee earns.

Impact of Covid-19 on data

To what extent are the data used in this analysis affected by Covid-19?

The short answer to the question posed in this section is almost not at all.

The main database used in the statistical analysis is the 2015-2019 American Community Survey Public Use Microdata. These data preceded Covid-19.
The Occupational Employment Statistics Research Database from the U.S. Bureau of Labor Statistics ends in 2020 but an analysis of trends in these data suggest no discernible impact of Covid-19.
The workplace injuries data ended in 2019.

Workplace injuries and illnesses

Table 12 shows these workplace injury and illness rates for the United States for the 2015-2019 period by occupation and sector (private, state government, local government). It lists the highest 25 rates plus correctional officers in any sector, out of 552 major occupation-sector combinations [23]. State government correctional officers have the 24th highest injury and illness rate. It is 23 percent higher than the rate for local government correctional officers (38th highest) and more than double the rate for private sector correctional officers (93rd highest). On the other hand, it is about 5 percent lower than the rate for local police and sheriff’s patrol officers, and 20 percent or more lower than rates for many occupations that involve handling potentially dangerous tools or equipment [24].

Table 12 — State correctional officers have the 8th-highest workplace injury rate nationally

The Law, Public Safety, Corrections & Security career cluster

Advance CTE, a national non-profit organization that represents state career and technical education (CTE) directors and other CTE state officials, has defined a set of career clusters that contain occupations in the same field of work and require similar skills [25]. The Law, Public Safety, Corrections & Security cluster is focused on planning, managing, and providing legal, public safety and protective services and homeland security, including professional and technical support services. It includes 42 occupations, as defined by the U.S. Bureau of Labor Statistics, divided into five pathways: Correction Services, Emergency and Fire Management Services, Law Enforcement Services, Legal Services, and Security & Protective Services [26]. State correctional officers are included in the Correction Services pathway.

Methodology

Methodology for wage regressions

Constructing data subsets from the American Community Survey

The 2015-2019 ACS is a sample of approximately 15 million people nationally. Only some of them are workers (some are children, some are retired, some are prisoners, some are unemployed, etc.).

I define a worker as someone who:

Is an employee of a private not-for-profit or for-profit entity, or a federal, state, or local government employee. I exclude anyone who is self-employed, or working without pay on a family business or farm, or was unemployed,
Is at least 18 years old,
Worked at least 48 weeks in the year,
Worked at least 35 hours on average, and
Earned at least $10,000

I defined two subsets of workers:

Correctional officers who work for state governments, for purposes of comparing of California correctional officers to other states’ correctional officers. I define a correctional officer as a worker who is (ACS occupation code 3802) and works for a state government. There are 9,187 people in the ACS nationwide who meet these criteria, 790 of whom live in California. I adjusted their wages for differences in state cost of living using BEA State Regional Price Parities [27].
Workers who live in California and work in any occupation as employees in the private for-profit or not-for-profit sectors, or any level of government. There are 718,588 workers who live in California and meet these criteria. I determined approximately the Metropolitan Statistical Area (MSA) that each worker lived in using a crosswalk of Public Use Microdata Area (PUMA) codes and MSA codes from the University of Minnesota’s IPUMS site [28]. I adjusted wages for intra-California cost-of-living differences using BEA Metro Area Regional Price Parities [29]. I used these data to estimate

Note: for purposes of analysis and reporting results, I group states and occupational groups that have fewer than 50 observations into a single all-other category.

Wage regressions

The statistical analysis of correctional officer compensation was based on a human capital model in which wages are estimated as a function of worker characteristics and other factors. For each regression, the dependent variable was the logarithm of cost-of-living adjusted wages. The independent variables were:

Experience and its square, where experience was estimated as age minus years of schooling minus 6. (For example, a worker aged 30 who had 16 years of schooling would be assumed to have 8 years of experience.)
Educational attainment: categorical variables to indicate whether the worker’s level of educational attainment, including high school graduation or its equivalent, high school graduate plus additional education not resulting in a degree, associate’s degree, bachelor’s degree, a master’s degree or higher, or less than a high school degree,
Hours worked in the usual work week,
Marital status: categorical variables to indicate whether the worker was married, widowed, divorced, separated, or never married,
Gender: categorical variable,
Immigration: categorical variable to indicate whether the worker was born in the United States,
Categorical variables for race and ethnicity,
A dummy variable for each year of the 5-year PUMS sample
Fixed effects for the relevant comparison groups. In the model for state correctional officers in the United States, there was a fixed effect for each state group. In the model comparing correctional officers within California there were fixed effects for each level of government (federal, state, and local). For the models examining clusters of workers (the model examining the Law, Public Safety, Corrections, and Security cluster of occupations, and the model examining workers in occupations with worker characteristics similar to each other), there were fixed effects for each occupation. In each model, fixed effect coefficients were examined relative to the average of all such coefficients and the log differences were converted to percentage differences (which generally are similar in magnitude to log differences).

The models do not include measures for employer size. The ACS does not include measures of employer size. Whether to control for employer size has been an ongoing issue of discussion for wage regressions. sector. In general, larger employers pay higher wages than smaller employers although the reasons are not well understood. Whether it is appropriate to include a firm-size measure in a wage regression and how to interpret it depends on the reason that wages are higher in larger firms. One possible explanation is that larger employers have greater market power and workers share in some of this large-employer benefit. Another possible explanation is that larger employers hire more-qualified workers, in which case employer size would be a proxy for unobserved worker ability and ought to be included [30]. A firm size control would not seem appropriate for the comparisons to correctional officers in other states, as all the employers are state governments and are large. For the other regressions the question is less clear.

k-means clustering of California occupations

To develop a cluster of occupations that are similar, I used what is known as a k-means clustering approach. In this approach, I divided occupations into groups (clusters) in way that ensures that occupations within a cluster are similar to each other, and that the different clusters are quite different from each other.

I summarized data for each occupation in the American Community Survey, calculating mean values and standard deviations for key demographic variables including age of the worker, marital status, gender, educational attainment, immigration status, and several other factors. I did not include average wages in these calculations because we want to compare state correctional officers to other occupations that are similar in ways other than earnings. I scaled each variable to have a mean of zero and a standard deviation of one.

I then used the k-means clustering method to divide the occupations into 9 clusters so that the occupations in each group were as similar as practical to each other and as different as practical from occupations in the other groups. I decided upon 9 clusters (rather than, say, 7 clusters or 11 clusters) using a method that seeks the smallest number of groups that results in occupations within each group that are extremely similar to each other [31].

Endnotes

[1] The U.S. Bureau of Labor Statistics Occupational Employment Statistics Research Database used here begins in 2012.

[2] Based on Regional Price Parities released in U.S. Bureau of Economic Analysis, “Real Personal Consumption Expenditures and Personal Income by State, 2020,” U.S. Bureau of Economic Analysis (BEA), December 14, 2021, https://www.bea.gov/news/2021/real-personal-consumption-expenditures-and-personal-income-state-2020.

[3] When compared to the average for other states (i.e., excluding California) rather than to the United States average, California state correctional officer wages are 56.3 percent higher than the other states average.

[4] Private sector correctional officers are excluded because there are only 11 private sector California correctional officers in the American Community Survey.

[5] U.S. Bureau of Labor Statistics, “Injuries, Illnesses, and Fatalities,” Injuries, Illnesses, and Fatalities, December 2020, https://www.bls.gov/iif/.

[6] California Department of Corrections and Rehabilitation, “Open Statewide Examination Bulletin” (California Department of Corrections and Rehabilitation, October 1, 2021), https://www.cdcr.ca.gov/por/wp-content/uploads/sites/162/2020/07/CDCR_Correctional_Officer_Bulletin.pdf.

[7] “Employer Health Benefits: 2021 Annual Survey” (Kaiser Family Foundation, 2021), https://files.kff.org/attachment/Report-Employer-Health-Benefits-2021-Annual-Survey.pdf.

[8] “Employer Costs for Employee Compensation Summary – 2021 Q03 Results,” December 17, 2021, https://www.bls.gov/news.release/ecec.nr0.htm.

[9] This appears broadly consistent with the current Bargaining Unit 6 contract, which states that California will contribute $7,308 annually for a single plan, $14,676 for a plan with one dependent, and $19,000 for a plan with two or more dependents. See section 13.01 of: “MOU July 3, 2020 through July 2, 2022,” accessed August 11, 2021, https://www.calhr.ca.gov/labor-relations/Documents/mou-20200703-20220702-bu06.pdf.

[10] “Employer Health Benefits: 2021 Annual Survey.” For purposes of this survey, “large” was defined as more than 200 employees.

[11] See sections 10.21, 10.22, and 10.23 of “MOU with Bargaining Unit 6, July 3, 2020 through July 2, 2022,” accessed October 19, 2021, https://www.calhr.ca.gov/labor-relations/Documents/mou-20200703-20220702-bu06.pdf.

[12] p.25 of Gabriel, Roeder, Smith & Company, “State of California Retiree Health Benefits Program GASB Nos. 74 and 75 Actuarial Valuation Report As of June 30, 2020” (Gabriel, Roeder, Smith & Company, September 24, 2021).

[13] “MOU with Bargaining Unit 6, July 3, 2020 through July 2, 2022.”

[14] The normal cost – an actuarial concept – appears to be calculated with a 6.75 percent discount rate. By contrast, the service cost – the accounting counterpart to the normal cost – is calculated with a blended discount rate of approximately 3.7 percent, according to p.58 of the actuarial valuation. As a result, the service cost is about twice as large as the normal cost, and if employee contributions resume, they will still be far below half of service cost even if they cover half of normal cost, and they will not include an amortization component. The net OPEB liability for BU6 is $16.2 billion according to p.110 of the actuarial valuation.

[15] Gabriel, Roeder, Smith & Company, “State of California Retiree Health Benefits Program GASB Nos. 74 and 75 Actuarial Valuation Report As of June 30, 2020.”

[16] Legislative Analyst’s Office, “The 2021-22 Budget: Labor Agreements Ending Personal Leave Program 2020,” June 25, 2021, https://lao.ca.gov/Publications/Report/4446#unit-6-corrections.

[17] https://www.bls.gov/oes/

[18] California Department of Human Resources, “2013 California State Employee Total Compensation Report: For Bargaining Units 6, 9, 10, and 12, First Published February 2015, Revised May 2015” (California Department of Human Resources, May 2015).

[19] https://www.bls.gov/oes/oes_ques.htm#def

[20] “American Community Survey (ACS) Public Use Microdata Sample (PUMS) 2019 ACS 5-Year PUMS” (U.S. Bureau of the Census, January 2021), https://www.census.gov/programs-surveys/acs/microdata.html

[21] U.S. Bureau of the Census, “American Community Survey and Puerto Rico Community Survey 2019 Subject Definitions,” 2020, 165.

[22] California State Controller’s Office, “Government Compensation in California,” accessed December 30, 2021, https://publicpay.ca.gov/About.aspx.

[23] The table uses 5-year averages to avoid being unduly influenced by any single year. In addition, the table is limited to occupation-sector combinations that had at least 5,000 full-time-equivalent employees in all 5 years, to ensure that it does not include small categories that may have high injury rates but that are not consequential in the overall economy.

[24] The rates for some occupations may seem surprising. For example, the high rate for dietetic technicians appears unusual. However, the vast majority work in hospitals or nursing homes which subjects them to risks such as illness and exposure to hazardous materials (see https://www.bls.gov/oes/current/oes292051.htm).

[25] See https://careertech.org/who-we-are; https://www.onetonline.org/find/.

[26] A data file listing the included occupations is here: https://www.onetonline.org/find/career/Law_Public_Safety_Corrections_Security.xls?fmt=xls&c=12.

[27] U.S. Bureau of Economic Analysis (BEA), “Regional Price Parities by State and Metro Area,” Regional Price Parities by State and Metro Area, December 14, 2021, https://www.bea.gov/data/prices-inflation/regional-price-parities-state-and-metro-area.

[28] https://usa.ipums.org/usa/resources/volii/MSA2013_PUMA2010_crosswalk.xls

[29] Robert Tibshirani, Guenther Walther, and Trevor Hastie, “Estimating the Number of Clusters in a Data Set via the Gap Statistic,” Journal of the Royal Statistical Society: Series B (Statistical Methodology) 63, no. 2 (2001): 411–23, https://doi.org/10.1111/1467-9868.00293.

[30] Maury Gittleman and Brooks Pierce, “Compensation for State and Local Government Workers,” Journal of Economic Perspectives 26, no. 1 (February 1, 2012): 217–42, https://doi.org/10.1257/jep.26.1.217.

[31] Tibshirani, Walther, and Hastie, “Estimating the Number of Clusters in a Data Set via the Gap Statistic.”

Compensation Analysis: California Correctional Peace Officers Bargaining Unit 6

Summary

California state correctional officer wages

Mission