Federal Employees Make 26 Percent Less Than Private Sector Workers?!

Federal government workers make less than their private sector counterparts, a new study compiled by federal workers reveals.

Federal government workers make less than their private sector counterparts, a new study compiled by federal workers reveals.

WaPo (“Federal employees make average 26 percent less than private workers, Labor agency reports“):

The federal government reported Friday that on average its employees are underpaid by 26.3 percent when compared with similar non-federal jobs, a “pay gap” that increased by about 2 percentage points over the last year while federal salary rates were frozen.

The Bureau of Labor Statistics presented the figures to the Federal Salary Council, an advisory group of federal agency officials, union representatives and outside pay experts.

The numbers are calculated for setting pay raises under the locality pay system used for white-collar employees who work under the general schedule pay system. Some of the money provided by Congress for an annual raise is paid across-the-board while the rest is divided according to the pay gaps for 31 city areas plus a catchall “rest of the U.S.” for areas outside those metropolitan zones.

Under a 2010 law, however, federal salary schedules were frozen for 2011 and will be frozen again in 2012, although “within-grade” raises that are largely based on longevity still are allowed, as are raises after promotions.

“It’s not surprising there’s an increase in the gap because of the pay freeze but it highlights the impact on federal employees that the freeze is having,” said Colleen M. Kelley, president of the National Treasury Employees Union and a member of the council. “There’s no doubt in my mind that it will increase more when the 2012 freeze is in effect.”

The pay gap in the Washington-Baltimore area was calculated at 36.9 percent, slightly below the 38.1 percent reported last year. Officials said a variety of factors could have caused that result, including changes in the mix of jobs and the switch into the general schedule of thousands of Defense Department employees from a separate pay system that is being phased out.

How can this be, you ask? What about all those reports showing that Federal workers earn twice what their private sector counterparts make? That Federal workers make more than state governors? That bureaucrats are overpaid?

Well, it depends on how you look at the numbers. There’s some controversy over how to factor in benefits, for example.

Mostly, though, those other studies are comparing apples to oranges while this one is trying to compare apples to apples. The federal government workforce simply doesn’t look very much like the private sector workforce. It’s almost entirely white collar and college educated. There are a disproportionate number of lawyers, accountants, engineers, and scientists.

FILED UNDER: Economics and Business, US Politics, , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Anon says:

    If federal jobs really paid better than private sector jobs, I’d expect to be hearing it from students in my computer science department as they seek jobs. They’d be eagerly seeking them out, talking about how hard it was to get a federal job, the few lucky ones who got an interview, etc.

  2. OzarkHillbilly says:

    heh.

  3. Pan says:

    It’s especially true for those in the Senior Executive Service, whose salaries are capped by Congress. They make less than $200k. Their counterparts in the private sector make upwards of $500k or more as executives of large organizations or corporations.

  4. Jay says:

    This is a very important point. Thanks for clarifying the “apples to apples” argument here.

    As you mention, to determine the “correct” wage for a Fed employee, we would need to value the benefits. Some of these are harder to quantify than others, like the benefits of a more laid-back office culture and of the higher job security.

  5. James H says:

    Laid-back office culture? That’s a function of the managers, I’ve found, not of whether something is private-sector or public-sector.

  6. Mostly, though, those other studies are comparing apples to oranges while this one is trying to compare apples to apples.

    Exactly.

  7. JKB says:

    And this matters why? Is there a shortage of applicants for federal jobs? I mean besides the fact they completely hosed USAJobs recently.

    This lament comes up all the time, yet, come a new administration there is a flood of politicals eager to take their position and those saddened by their departure. As I told many when they started this whine, then you need to quit and go get one of those high paying private jobs. We’ll get by without you. Some that did, were back in a few years wanting some security and less pressure.

    The basic fact is the government is never going to get the best and the brightest… for long, If you are that good, you’ll want the freedom of being your own boss and the benefit of profiting from your skills and expertise in the competitive market place

  8. Dave Schuler says:

    I honestly don’t see how an apples to apples comparison can be made. I’ll just give two examples of why I think this is so: law and top management.

    Lawyers have a median income of around $80,000 per year. So the apples-to-apples comparison is comparing the median income of lawyers in the private sector to lawyers in the public sector, right?

    Not so. The incomes of lawyers occur in a bimodal distrribution (a curve like the humps of a camel) rather than a normal one (bell-shaped). Lawyers who’ve graduated at the top of their classes from the top 15 law schools and who work for the top law firms can be significantly higher than $80,000 but the income of most other lawyers is significantly less. There is no apples to apples comparison to make.

    Top managers at Fortune 1000 companies make a lot of money. I think they’re overpaid but who the heck am I? However, they’re paid enough that it skews the compensation for the entire private sector.

    Many public sector jobs have no private sector counter-parts. How do you do an apples-to-apples comparison of that?

  9. @Dave Schuler:

    In the case of lawyers, though, can’t you make the comparison between a graduate from a top-tier law school who goes to work in the US Attorneys office and one who goes into the private sector? Assuming their both near the top of their respective classes, the private sector top tier graduate is likely to be earning much more than his public sector counterpart, and working longer hours of course.

  10. @Dave Schuler: Surely, though, comparing public and private sector attorneys is close to apples to apples than is all public sector employees to all private sector employees, which is the point I understand James to be making.

  11. MM says:

    @JKB:

    And this matters why? Is there a shortage of applicants for federal jobs? I mean besides the fact they completely hosed USAJobs recently.

    I think it’s just pushback from the “Government employees are paid way more than private sector workers when you factor in long-term disability and death benefits” narrative.

    The basic fact is the government is never going to get the best and the brightest… for long, If you are that good, you’ll want the freedom of being your own boss and the benefit of profiting from your skills and expertise in the competitive market place

    If the only options are government employment or being your own boss, this might be the case, however these are not the only two options.

  12. James Joyner says:

    @JKB: I think it depends on the job. The federal government gets some of the best–if not the best–in a whole host of sectors where government is the place to be.

    -Military officers
    -Intelligence officers (CIA, NSA)
    -Judges (SCOTUS and appeals courts)
    -Prosecutors (US Attorneys)
    -Criminal investigators (FBI special agents)
    -Medical researchers (CDC)
    -Astronauts (NASA)
    -Foreign policy (State, National Security Council, War Colleges, etc.)

    In some cases, the feds have a monopoly. In others, government is the place where you can make the most difference. Regardless, there are thousands upon thousands of people employed in just those places above I came up with off the top of my head where the federal govt employs the best and the brightest.

  13. Dave Schuler says:

    @Doug Mataconis:

    Of course you can. Is that what they’re doing? I don’t see it.

  14. Dave Schuler says:

    @Steven L. Taylor:

    Actually it’s worse. It’s like comparing Charlie Trotter to a burger flipper at McDonalds.

  15. @Dave Schuler: If you say so. I am not seeing the validity of that analogy, to be honest.

  16. Dave Schuler says:

    @Steven L. Taylor:

    Comparing “all public” with “all private” at least smooths out some variations. Since incomes in law occur in a bimodal distribution it’s more like two completely different professions. Just not comparable.

  17. Ron Beasley says:

    I’ve always thought that comparing government workers and the private sector was a bit like comparing Intel to McDonald’s.

  18. Mike Mathea says:

    The study’s compare education levels and not job responsibilities. One example I noticed was comparing a private sector person purchasing 2 million dollars of non technical products. The government required an MBA while the private company required an AA degree. The assumptions and comparisons of all these studies make me very nervous. In this instance is the government worker over paid?

  19. Console says:

    @James Joyner:

    Exactly. There are a lot of jobs in government where you literally work at the top of your profession. There’s no equivalent to a place like Chicago approach control or Atlanta airport in the world. You’re literally working at the highest level of your profession as an airtraffic controller in places like these.

    But even when we aren’t talking about truly high skilled jobs like fighter pilots or NASA rocket scientists, the public sector is work is still work and still requires skills to succeed in.

  20. mike says:

    and 50% less productive.