This page from the Center on Budget and Policy Priorities, shows that state and local employees earn less than their counterparts in the private sector, even including benefits. The main reason public sector wages seem larger than private is that a higher percentage of them require a higher degree. This bears out my own experience as a state of Georgia employee. My job requires a Master's degree, and many of us librarians have two master's degrees, one in a subject discipline and one in library science. I have a bachelors in history, a masters in history, and a masters in library science, for example. All the time I've been working, the "common knowledge" was that private sector jobs in my field pay better, but the job security and benefits aren't as good. This has been particularly true in librarianship... a lot of companies laid off their librarians as technology changed and the demands for profits increased.
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