(originally published at GovCentral.com )
The Cato Institute, a libertarian leaning think tank, suggests that the average federal worker is paid more than the average private-sector employee, especially when fringe benefits like health insurance and pensions are factored in.
Nancy Folbre, Economics Professor at the University of Massachusetts, Amherst, in a recent New York Times article, wanted to explore if there was any merit to these claims.
With little details provided by organizations about what defines the average federal or private worker, Folbre decided to dig into the details of the Current Population Survey to see what defines the average worker. The Current Population Survey (CPS) is a monthly survey conducted by the U.S. Census Bureau and released every month. For her article, Folbre used calculations from the 2009 March CPS survey.
By to her calculations, the average federal worker is older, more educated and works full-time compared to the private sector. While more likely to have employer-paid health care and a pension waiting for them upon retirement, the federal workforce is decidedly middle-class, with the majority earning $25,000 to $75,000 a year. The think tanks may be somewhat accurate, but comparing the average worker only tells half the story.
The Bureau of Economic Analysis explains that the federal workforce is concentrated in professional, administrative, and technical occupations while private-sector positions range from minimum wage to high paid CEO’s.
According to Folbre’s calculations, 43 percent of private-sector workers earn less than $25,000 a year, but the average compensation for Fortune 500 CEO’s in 2008 was $11.4 million each. In comparison, President Obama will earn $400,000 in 2009, though he does get to live rent-free in the White House.
If we compare similar professional occupations, some people may take a pay-cut to work for the federal government.
A law-school graduate starting at a Washington, DC law firm can expect to earn around $140,000 in their first year. That same graduate starting at the Department of Justice down the street will start at $60,000. While the DOJ lawyer can get up to $10,000 a year to repay student loans, the private sector lawyer should probably pick up the tab at Chef Geoff’s.
Likewise, a mid-career IT Project Manager can expect to earn $80,000 at the Department of Veterans Affairs, but that same position in for a company like AT&T can earn you double that.
Starting a career in federal government is more than just a salary though. Many people choose public service to contribute to the greater good of society or for a greater work-life balance. In many cases, a federal worker may have more responsibility than their private-sector counterpart. For example, a laboratory technician at the Centers for Disease Control is researching the cure for HIV and a Federal Agent with the Federal Bureau of Investigations is undercover right now, rooting out the next corruption scandal.
In the federal government, there may be a cap on your earning potential, but not in your potential to affect change for the greater good.