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Federal Pay Is Double The Private Sector

From the Cato Institute’s website:

Federal Pay Continues Rapid Ascent

By Chris Edwards

August 24, 2009

The Bureau of Economic Analysis has released its annual data on compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D here). The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.

The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.

Figure 1 looks at average wages. In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $49,935 for the nation’s 108 million private sector workers (measured in full-time equivalents). The figure shows that the federal pay advantage (the gap between the lines) is steadily increasing.

Figure 2 shows that the federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909.

What is going on here? Members of Congress who have large numbers of federal workers in their districts relentlessly push for expanding federal worker compensation. Also, the Bush administration had little interest in fiscal restraint, and it usually got rolled by the federal unions. The result has been an increasingly overpaid elite of government workers, who are insulated from the economic reality of recessions and from the tough competitive climate of the private sector.

It’s time to put a stop to this. Federal wages should be frozen for a period of years, at least until the private-sector economy has recovered and average workers start seeing some wage gains of their own. At the same time, gold-plated federal benefit packages should be scaled back as unaffordable given today’s massive budget deficits. There are many qualitative benefits of government work—such as extremely high job security—so taxpayers should not have to pay for such lavish government pay packages.

No wonder the unions want national healthcare. Every worker should want to be a federal employee.

And if Mr. Obama and the Democrats have their way, they soon will be.

This article was posted by Steve on Tuesday, August 25th, 2009. Comments are currently closed.

27 Responses to “Federal Pay Is Double The Private Sector”

  1. U NO HOO says:

    “No wonder the unions want national healthcare. Every worker should want to be a federal employee.”

    Universal federal employment, another single payer system.

    • proreason says:

      That, and the fact that there is an obscure provision in HR 3200 that pays a substantial portion of the health insurance premiums of union members. It’s a $10B payola.

      update: Steve just posted an article about it

  2. proreason says:

    They get paid twice as much as we do.

    But consider the SERVICE.

    Where else can you get the kind of service a government bureaucrat will give you?

    Why, I’ll never forget that when Ms. Reason broke her shoulder, an injury handled as Workman’s Comp, it only took one call to my congressman to get a new doctor to replace the first incompetant one.

    If I hadn’t been so slow to realize that was what you had to do, she might even have the use of that shoulder today.

    I still kick myself for not realizing that the change process involved dozens of invalid phone numbers, false and obsolete forms, contradictory regulations, multiple layers of bureaucracy, 9 to-4:30 work hours, a maze of holidays and vacations, 3-day turn-around of phone mail, and untrained support personnel. No-doubt, I could have learned all of that by reading the law that regulates Workman’s Comp in my state, so it’s my fault for not paying attention.

    • Colonel1961 says:

      Ah, the service! I’m never disappointed in the small amount of work – if any – required of civil servants. Not only are they well paid and granted every perquisite known to man, they (and the 80/20 rule applies) do nothing. I once supported a program office where a few of the civil servants were never there – and I do mean never. I’d often ask, ‘Where’s Tim?’ and the topic would go silent…

      Pray that these miscreants never get more in the way of our health care.


  3. GetBackJack says:

    Rise of The Bureaucrats, France … shortly before a bloody awful Revolution.

  4. Liberals Demise says:

    Saw two of those Obama “Putting America back to work” signs on Ft. Bragg this morning. You know, the one with the picture of a guy with a shovel in his hand. Guess what?
    That’s right!!
    No work being done as far as the eye can see!!

    • pdsand says:

      I’ve seen about a million signs in Georgia from the Special Purpose Local Option Sales Tax, an additional 1 cent sales tax voted on by each individual county and spent in that county. Guess what, every sign is in front of a sparkling newly paved highway or a nice bridge or whatever.
      Out in Colorado I’ve seen signs for the Pikes Peak Rural Transportation Authority, an additional tax on vehicle registration and such. Same thing, always right in front of massive projects.
      I’ve seen a few of these Obama signs all over the country, and I’ve never even seen a cone associated with one.

    • MinnesotaRush says:

      The “Putting America Back to Work” project was to put the signs in. There. They’re done. Pretty groovy, ‘ay.

  5. pdsand says:

    Not to be a nitpicker, but isn’t the more scientific measure of such things the median income, rather than the average income?

    • oldswimcoach says:

      Yes. And is the work comparable work? There are a lot of teenagers working at McD’s and part time workers etc. Are they included in the private sector stats? I think we need a lot more info about the study and variables before any conclusions can be drawn.

    • U NO HOO says:

      Yeah, we can nitpick and realize no one in the government, maybe, makes millions per year, but answer me this batman, if you had to flip a coin for a lifelong salary with a government salary (something above minimum wage and as high as ~$400,000, POTUS?) on one side and a private industry salary (a restaurant server’s minimum wage plus tips with an unlimited high, Jeff Immelt?) on the other, which coin side would you choose?

  6. oldswimcoach says:

    $79,000 for a federal worker’s pay as an average? I don’t think so – that’s approx. a GS13 step 8-10 pay rate, and that is not the “average” fed employee. Not saying the feds aren’t over-paid, but I am very suspicious of the “average” salary figure used in the graph. Also, the average fed worker is middle management white collar – it’s just what a bureaucracy is, so a better comparison is mid management to mid management. I suspect the fed pay is higher, but the gap would be a LOT tighter!

    • Georgfelis says:

      Like oldswimcoach, I think these numbers are fishy. I have a neighbor who has been in Federal Civil Service for twenty years as middle/lower management, and is nowhere *near* that magic $79,000 mark. Then again, if you were to exclude the entire District of Columbia (Where the Overpaid Ones live and work), I think those lines might just match up perfectly.

      Office of Personnel Management 2009 pay schedule

    • pdsand says:

      $79,000 was the number for 2000, the 2008 number is $119,000. That’s like the highest salary for a GS-15. Of course this figure is trying to define total compensation, so it’s also including benefits.

  7. proreason says:

    “average fed worker is middle management white collar ” You stated the answer to the riddle yourself. Yes, the civilian workforce has millions of people who flip burgers and cut grass, which skews the comparison. (but I would also contend there are a lot of well-paid bureaucrats who should be flipping burgers. Maxine Waters is one of hundreds that come to mind.)

    Also note carefully that in the last decade, fed salaries rose at a much higher clip than civilian salaries. The government, of course, has no competition, hence no reason to try to control costs.

    More reasons why the government is always the most expensive option.


  8. pdsand says:

    Who kept their personal statements of military compensation, the propaganda statement? I always treasured mine because they were so silly. I’d even go through and make up numbers that I thought I might be saving by shopping at the commissary and such to really get the full picture. Well I’m sure this is a similarly contrived method of divining how much “total compensation” that a federal civilian employee is receiving.
    I’m sure they probably did something silly like add up all the money the federal employee health benefit pays out, and divide it equally amongst the total number of employees. That’s probably a really big number per person, and it’s why they’re supposed to be earning on average $120k per person per year.

    • proreason says:

      Private Industry typically has benefit burdens of 30-50% to cover insurance, FICA match, FUTA/SUTA, pensions, 401K matches and other benefits.

      Since government pensions adjust for inflation and are defined benefits plans, the cost of them will be very high. Anything that adjusts for inflation and can be paid out for decades is very expensive, particularly considering some government employees can retire earlier than people in private industry typically do. And, civil service workers who retired before the early 1980’s had even more delux retirement benefits, which are no doubt included in the $119,000 per worker. (that’s also why the UAW hourly rates seem so high. Pension costs are included).

      For people in law enforcement and the military, the cost of pensions is also high relative to salaries because those people often retire in their 40’s and early 50’s. There are probably more people drawing military pensions than ther are active service men and women.

      Government jobs also have delux medical benefits, and pay for unused vacation days in various ways.

      A 60-65% burden for the government doesn’t sound high at all.

  9. catie says:

    Well, I don’t find that I saved that much at the commissary while on the mainland. Now in Hawaii, it was definitely a saver. But while we supposedly don’t have “taxes” on our food, we have that “MWR” thing. I have mine from when I first came in and when I left. I still made more at a grocery store (with my pay and tips) overall as a junior and senior in high school than I did my first year in the Army.
    My father in law makes an unbelievable amount of money at the DOT. I am unsure what it is he actually does though.

    • pdsand says:

      Yeah, but they always have that sign up in the front of the commissary that says that you’re saving 30% on meat, 20% on produce! So I just went with it. It was all for fun, you know. Especially if you buy the “other” stuff at the commissary, like batteries or paper towels, I don’t think you save anything, you probably pay more.

  10. U NO HOO says:

    OK, I’m nitpicking, Dana Perino, IIRCC, was paid $160,000. Higher than GS15 Step 10.

    What does “Dana Perino/Robert Gibbs” of GE make?

    Just asking.

  11. Confucius says:

    I know a nurse anesthetist who works for government.

    This person makes ~$135,000/year in salary. Benefits approximately equal 23% of annual salary.

    After 20 years, this person can retire with an annual income equal to 80% of salary at time of retirement. They also get to keep their health insurance plan at a deeply discounted rate.

    Oh yeah. This person works 5 days a week, 7am to 3 pm. No call. No weekends. Gets all the federal holidays off. Which leaves approximately what . . . 10 working days per year?

  12. MinnesotaRush says:

    Wasn’t the “Comparitive Worth Program” of long ago to determine the compensation of comparable jobs in the private sector and then assign that package to the comparable job in the public sector?

    It’s evolved into gov’t agency comparing to gov’t agency and what they can get by with stealing from the taxpayer.

  13. Confucius says:

    Where is the social justice?

    It seems to me the government owes me some money.

    • proreason says:

      Muse, muse, muse.

      Wouldn’t it be interesting the see the racial profile of government workers vs the population as a whole?

      I’d be most a mused to see the civil service statistics.

      Somehow, the social justice comment got me to musing about that.

      Not that I’d ever suggest there might be a hiring preference for minorities in do-nothing government jobs. Perish that thought.

    • pdsand says:

      You perish that right away, it’s absurd. And there is no preference given to minorities to receive contracts to do the government’s work either. And there certainly aren’t miriad organizations in any government department that exist solely to cater to the needs of minorities, and to defend them in case whitey ever decides they just sit around on the phone all day and don’t do any work and should get fired. You can’t run right to EEO or the Justice Department.

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