Are federal workers overpaid? Checking the facts

Are federal employees overpaid?

Republican leaders in Congress think so, and they are calling for an overhaul of the entire federal pay system to help slash government spending.

Democrats and other defenders of the government work force say federal workers are actually underpaid compared with their private counterparts.

A closer look at the data shows that both sides have a point but that supporters of federal workers are a bit closer to reality. The debate has heated up since the GOP budget blueprint unveiled this week calls for federal pay “to be reformed to be in line with the private sector.” It says average wages “far eclipse” those in the private industry.

At a congressional hearing last month, Rep. Dennis Ross, R-Fla., said the average federal worker earns $101,628 in total compensation — including wages and benefits_ compared with $60,000 for the average private employee. He was citing data from the federal Office of Personnel Management.

“Our taxpayers can no longer be asked to foot the bill for these federal employees while watching their own salaries remain flat and their benefits erode,” said Ross, chairman of the House Oversight subcommittee on the federal work force.

But federal employee advocates claim a straight-up comparison of average total compensation is misleading. A disproportionate number of federal employees are professionals, such as managers, lawyers, engineers and scientists. Over the years, the federal government has steadily outsourced lower-paying jobs to the private sector so that blue-collar workers cooking meals or working in mailrooms now make up just 10 percent of federal employees.

That argument is backed up by a 2002 study of the nonpartisan Congressional Budget Office. It found that federal salaries for most professional and administrative jobs lagged well behind compensation offered in the private sector.

The CBO study concluded that the best way to measure the difference is to compare government jobs with those in the private sector that match the actual work performed. The CBO found that salaries for 85 percent of federal workers in professional and administrative jobs lagged their private sector counterparts by more than 20 percent.

Among lawyers, for example, the average pay in the federal government was about $127,500 a year in 2009, according to the Bureau of Labor Statistics. The average lawyer in the private sector earned $137,540. And the starting salary at large law firms in Washington, D.C. — where most government lawyers work — is $160,000, and can grow to hundreds of thousands of dollars a year, according to the National Association for Law Placement.

At the lower end of the pay scale, the CBO said 30 percent of federal employees in technical and clerical fields earned salaries above those doing comparable work in the private sector. But the differences were mostly within about 10 percent — plus or minus — of private levels.

The government does offer, on average, more generous benefits to workers than the private sector. OPM data shows the federal employees earned an average of $27,317 in pension and health benefits in 2010. That’s more than double the average private sector benefits of $10,589, according to statistics from the federal Bureau of Economic Analysis.

The CBO report pointed to what it called a “long-standing concern” with the federal pay system — it allows no variation in pay raises based on occupation. That means federal workers in professional and administrative jobs may get smaller pay increases than needed to match the private sector, while technical and clerical workers get higher raises than needed.

President Barack Obama is seeking a two-year federal pay freeze, but that’s not enough for some Republicans. The GOP budget plan offered this week by House Budget Committee Chairman Paul Ryan, R-Wis., would impose a five-year pay freeze on federal employees, cut the federal work force by 10 percent and increase employee contributions to retirement plans.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, said he wants to see Obama’s pay freeze include a ban on step increases — automatic adjustments within pay grades that are part of the federal pay system.

OPM Director John Berry says eliminating step increases would hasten the departure of valuable federal employees for the private sector.

Asked about the prospect of federal employees losing their jobs in the push to curb government spending, House Speaker John Boehner of Ohio angered Democrats earlier this year when he said, “So be it.”

“I don’t want anyone to lose their job, whether they’re a federal employee or not,” Boehner said. “But come on, we’re broke.”

Copyright © 2011 The Associated Press

Comments

  1. In my opinion federal employees are compensated fairly for the jobs they perform, since they are supposed to be the best people for their jobs. The only thing that I add is that the private sector needs to speed up the hiring process and stop outsourcing jobs abroad since there are so many Americans who are unemployed. I am one of them, my former employer decided to outsource our jobs to Pakistan, leaving 20 of us unemployed! No more tax breaks for American companies that move their operations.

  2. woody188

    Ha, I know a few lawyers that don’t make any money. Federal lawyers also get the “revolving door” where they can go private and become lobbyists after retirement from public work and “double dip” on their earnings.

    Go ahead and “hasten the departure of valuable federal employees for the private sector” starting with OPM Director John Berry. It doesn’t sound like he understands that there are at least six people competing for every job opening.

  3. Al S.

    Griff,

    You may have a point, depending on whether or not the jobs they do are necessary or not needed.

    I was a Postmaster, now retired. The USPS is necessary, to transport and deliver mail at a price far below FedEx or UPS – see my previous write-up following a letter through as many as 15 or more steps for a letter for only one First-Class stamp.

    Also, the USPS is a “quasi-autonomous” government agency, and has never received one penny of subsidy from your or my taxes. and was only allowed by law to charge enough to cover the cost of any particular class of mail. It is, in essence, privatized, except we were not allowed to make any lasting profit. We used to have a rate increase, make money the first year, break even the second year, and go in the hole the third year. That’s why you used to see a rate increase every three years or so.

    The most I ever made was about $50,000, and for that, I had to supervise as many as 48 employees (leading up to Christmas) by myself, know both the Domestic Mail Manual inside out, and the International Mail Manual, as well as how to supervise properly (by that, I mean get people to WANT to work for me, and to WANT to come to work, NOT “get out the whip”), and how to use proper disciplinary steps when needed. If I had been in a “private sector” job, I would have been making well over $100,000 for similar work. But it brought me to tears when a former employee said that I was “the best boss I ever had”. That made it all worthwhile.

    Are there unnecessary employees/consultants in the Government? Yes, no question about that.

    Al

    • woody188

      I was a project manager in the private sector with just over a hundred employees and never made more than $46,000 a year. Just to show you would need to take a pay cut and double your work load to compare.

  4. Michael Griffith aka Griff

    The argument shouldn’t be how much they’re paid, but how damned many of them there are. Too damned many.