AUGUSTA — The Mills administration announced Thursday that it will conduct a market study to determine whether state employee pay is competitive with the private sector and other public workers.

The administration has raised state employee pay 24% over the last five years after previous studies found compensation was lagging. However, union leaders say state wages continue to fall behind the private sector and the administration has “cherry picked” data and failed to compare wages for all workers.

The Department of Administrative and Financial Services submitted a report to lawmakers Thursday outlining a new strategy to “promote competitive pay and benefits” for state workers. It says the cost of the pay increases over the last five years has added about $511 million per biennium, not including annual merit increases, other allowances, or shift, stipend and special differential pay.

The state last conducted a market study in 2020, which concluded that state workers were paid on average 15% less than their private sector counterparts.

Since then, Gov. Janet Mills and lawmakers have increased employee pay by about 24% and bolstered other aspects of state employee compensation plans, including establishing a higher pay tier and advocating for additional funding for collective bargaining.

Financial services said in a news release that the 2020 study is now out of date. The new study, which is expected to be delivered in September, will focus on certain “positions with chronic recruitment and retention issues, as well as a sampling of other classifications, to determine how the state’s improved wages and benefits now compare to private and public sector employers and to ensure that the state stays competitive.”

Alec Maybarduk, executive director of the Maine Service Employees Union, Local 1989 of the Service Employee International Union, criticized the administration’s report and said it is “cherry picking” comparisons for certain jobs rather than updating the market study for all employees. The union represents over 13,000 current and retired workers.

“Publicly available data shows that average wage growth in Maine has been 30% from 2019 through the first quarter of 2023 according to quarterly census reports on wages – meaning that the pay gap continues to grow,” Maybarduk said in an email. “Sadly, this appears to be an attempt to kick the can down the road again, and not deal with the serious recruitment and retention issues in state government that are eroding the services the people of Maine rely upon.”

Mills said Tuesday in her written State of the State address that her administration would offer additional recruitment and retention bonuses for child protective caseworkers, who have testified before lawmakers over the last year about how an exodus of workers has increased caseloads to unmanageable levels.

Union officials commended Mills for the move, but called on the governor to offer increased pay to other state workers. The union said that over 2,100 state positions remain vacant, largely because of low pay.

On Tuesday, union President Mark Brunton called on the administration to address the pay gap between state employees and the private sector, pointing to the nearly $1 billion in cash reserves in the state’s budget stabilization, or rainy day, fund.

“Understaffing is rampant throughout all departments of Maine state government,” Brunton said.

The administration just concluded a difficult round of contract negotiations, which required mediation after the state and the employees union were hundreds of millions of dollars apart in terms of employee compensation.

The union ratified four contracts in December that included a 6% raise in January, an $800 payment expected in February and an additional 3% pay bump in July. It also included a child care reimbursement of up to $2,000 for certain workers, increased mileage reimbursement and increased longevity pay after five years of employment.

The administration said the pay increases for the state’s roughly 9,800 workers in the past five years are equal to pay raises over the preceding 16 years.

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