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Wednesday, June 20, 2012

Public Sector Roundup: Are Federal Employees Paid Too Much?

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At a recent event held at the Partnership for Public Service's Washington, D.C., headquarters, representatives of the American Enterprise Institute, the Federal Salary Council, and the Congressional Budget Office offered very different views on whether or not federal employees are paid too much.

Joseph Kile, assistant director for microeconomic studies at CBO, said a recent CBO report found only a 2 percent difference in pay, not including benefits, between the federal government and the private sector. However, the same report, released in late January, found federal employees earned 16 percent more on average than private sector workers when both wages and benefits were considered.

Andrew Biggs, a resident scholar at AEI, said his research, which like CBO's used data from the Census Bureau's current population survey, found about a 14 percent advantage for federal employees when only salaries and not benefits were compared. The advantage is more pronounced when benefits are factored in, he said, calling federal retirement benefits "several times more generous" on average than what is offered in the private sector.

Finally, Rex Facer, a professor at Brigham Young University's Marriott School of Management and member of the Federal Salary Council, said federal employees on average are underpaid by between 30 percent and 40 percent, including only salaries and not benefits. The council found in 2011 that federal employees were underpaid by slightly more than 26 percent, again looking only at salaries.

Despite their differences on how well federal pay and benefits stack up against the private sector, the three agreed this issue is separate from the question of whether the federal government has a pay system that allows it to recruit and retain well-qualified job applicants. Going forward, as a large percentage of the current group of federal employees begins to retire, the question of the appropriateness of the federal pay system--i.e., whether it attracts highly qualified job applicants and properly rewards employee performance--may take on more urgency.

In other public sector news:

  • Chicago Public Schools employees go in different directions in contract talks, as support services workers ratify a three-year collective bargaining agreement while teachers authorize a strike in the event that talks with the school system are not resolved before the new school year.
  • An IRS official says sponsors of tax code Section 403(b) plans, including public schools, should adopt a written plan document immediately, even if such adoption already is untimely.
  • An Agriculture Department requirement that Forest Service employees working at Job Corps Civilian Conservation Centers submit to random drug tests is struck down by the U.S. Court of Appeals for the District of Columbia Circuit on constitutional grounds.
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Comments (1)
Gilbert Alvarez
6/20/2012 5:54:59 PM
In these salary comparisons is anybody taking into consideration the age of the work force? I think it is safe to say that the federal work force is older and consequently more experienced and making more. I think that future studies should factor in the age difference and it's significance. Enough with the pay freeze. Thanks,