Are federal workers overpaid?
Any compensation comparison between the average federal civilian employee and average private-sector employee oversimplifies the debate, glossing over the important differences in occupation, skill level, age, and education that determine salaries. The BEA has posted an FAQ on federal pay, providing a number of reasons why the average compensation for federal civilian employees is higher than the average compensation for private-sector employees: * Federal civilian workers are more educated. * The federal government has a higher proportion of white-collar jobs. * “Lower-skilled (and lower-paid) positions have been contracted out to private industries” in recent years, raising the average pay of federal civilian employees. * Federal civilian workers receive better pension and health insurance benefits on average than private-sector employees, some of whom receive no benefits. Furthermore, the $123,049 average compensation figure for federal workers is greatly inflated — and several thousand dollars too high. The BEA tells us that total compensation includes an unknown amount for retirees’ health and life insurance benefits. More importantly, it includes billions of dollars that Congress appropriates each year to pay "unfunded liabilities" for retirees and current workers covered by the old Civil Service Retirement System before it was replaced for newly hired workers starting Jan. 1, 1987. These payments for former workers obviously don’t benefit current workers, and should not be included in their average total compensation. BEA doesn’t produce an average figure — the $123,049 comes from Cato and others working from gross BEA totals. But I calculate that the average lies somewhere between $116,158 and $109,268 when money paid to benefit the retirement system for former workers is removed. (The range is actually lower than that, but BEA cannot provide us with the amount spent on retirees’ life and health insurance plans.) I arrived at our range by first figuring how much Congress paid last year for all CSRS unfunded liabilities. It amounted to $26.9 billion, or 11.2 percent of the gross figure that BEA gives for total compensation. But well over half that money covers workers who have retired since 1987. Some very senior current workers are still covered by the CSRS, so some of that money does benefit them. But we were unable to determine the exact percentage. Assuming (very conservatively) that half the money was for those older current workers, the average total compensation would be $116,158. Assuming that none of it benefits current workers, the figure would be $109,268. Somewhere in between lies the true figure, which is thousands less than the number used by Republicans and other critics of federal pay. We’ve also reviewed numerous reports that illustrate the folly of trying to compare federal and private workers using the BEA data. The Office of Personnel Management reports that 44.3 percent of federal civilian workers held a bachelor’s degree in 2008. That’s more than double the percentage of private sector employees who have a bachelor’s. The Minnesota Population Center at the University of Minnesota provided us with comparable data for private-sector employees: 18.7 percent held a BA in 2008. In a 2007 report titled "Characteristics and Pay of Federal Employees," the nonpartisan Congressional Budget Office said “44 percent of federal workers were in management, professional, and related occupations, compared with 32 percent of private-sector workers,” citing the U.S. Census Bureau’s 2005 Current Population Survey. The CPS data also reported that the average federal civilian worker was 45 years old — five years older than the average private sector employee. http://www.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm?csp=hf http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=197&ViewSeries=NO&Java=Yes&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2008&LastYear=2009&3Place=N&Update=Update&JavaBox=no#Mid http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=185&Freq=Year&FirstYear=2008&LastYear=2009 http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=189&Freq=Year&FirstYear=2008&LastYear=2009 http://www.bea.gov/faq/index.cfm?faq_id=320&start=0&cat_id=0 http://factcheck.org/UploadedFiles/2010/11/ipums-2008.pdf Please, read all of this before answering. I know it's quite a bit but it's very informative.
Asked By: Bertrand Encourages Thought - 12/16/2010
Best Answer - Chosen by Asker
NO. IN fact if you look at federal employees with comparable education and training to a private sector employee you'll find the federal employees make on average about 20% less.
Answered By: ndmagicman - 12/16/2010
Additional Answers (9)
Yes. A lot of the, are and pay should be aligned to the private sector
Answered By: Primo - 12/16/2010
Oh yea. The fed govt can throw you in jail if you dont give them money. Force gets you a lot of things, including higher pay.
Answered By: Knowledge Is Power - 12/16/2010
In some cases they might be. However, the turnover rate for federal employees is VERY low. So that saves on training costs.
Answered By: Evil Dictator - 12/16/2010
Most definitely Private sector equivalent are lower in pay and benefits and is far less secure and less demanding
Answered By: rainmaker - 12/16/2010
After seeing how low paid federal workers act (thinking of the TSA), I would like to see them paid pretty well for good talent.
Answered By: Handles_YATYAS - 12/16/2010
Union Management is communist, you know it, and so does most of America. They want to unionize Fed workers so we can end up like Greece, France and the UK and then be subject to new world order takeover by the out of touch from reality elites.
Answered By: Socialism becomes Communism - 12/16/2010
Answered By: Hussein Loves Van Jones - 12/16/2010
Well where we have direct comparisons they seem to perform in a substandard manner. USPS would be a good example(yes they are technically Quasi-public), look at the 10Q's between them and the their competitors and then consider they have many advantages such as a monopoly on letter delivery (their most profitable part... More
Answered By: Thedude27 - 12/16/2010
It all depends on the job that you are talking about. A Blackwater employee makes over 100K per year while a Sergeant makes less than 30K. A Federal Police Officer makes a lot less than a large metro officer does. And finally the CEO of the government makes peanuts compared to a CEO of any large corporation. Would... More
Answered By: Jer.L - 12/16/2010
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