The Labor & Employment Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues.
Wednesday, June 20, 2012
by Louis C. LaBrecque
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:
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