A long-awaited state salary study has been released in Alaska, revealing that a significant number of state employees are being underpaid compared to other employers. The study conducted by Segal, a private contractor hired by Governor Mike Dunleavy’s administration, found that over 25% of state employees earn less than the 50th market percentile.
Initially, the study was meant to examine the 65th percentile for compensation, but the administration requested the 50th percentile to be included as a benchmark for certain job classes. This move may reflect the administration’s stance on potential wage increases.
The Alaska State Employees Association, a union representing most state employees, has filed a lawsuit seeking earlier drafts of the study for full transparency. While the study results will be crucial in negotiating a new contract for the union’s members, they may not immediately translate into pay raises.
The study revealed that many job categories, including accountants, economists, and biologists, are paid substantially below market rate. This underpayment may be contributing to a high vacancy rate in certain state agencies, as employees seek better wages and benefits elsewhere.
The study also did not address the competitiveness of Alaska’s retirement system, raising questions about state employees’ overall compensation adequacy. The administration stated that the Retirement and Benefits Division is working with the Legislature to evaluate the state’s retirement systems.
The study, which comes after a $1 million contract approved by the Legislature, benchmarked compensation to Anchorage’s labor market and did not consider variations in labor costs in other parts of the state. The results highlight the need for further conversations on ensuring fair compensation for state employees in Alaska.
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