CBO Weighs in on Federal Pay and Benefits – What Do You Think?

The non-partisan Congressional Budget Office just released its comparison study of Federal vs. Private Sector Pay and Benefits (http://www.cbo.gov/doc.cfm?index=12696). After all these years of thinking that we have a pay gap of about 26%, it turns out that we are overpaid and have substantially better benefits than the private sector.

It’s hard to argue with the benefits assumptions, but the study seemed to rely mostly on education level to compare Federal and Private Sector salaries. It turns out that Federal workers with only a high-school education earned 21% more than their counterparts in the private sector. I’m not convinced that education level should be the common denominator. They are disregarding the nature of the work performed. We have very few maintenance workers, farmers, construction workers, restaurant servers, retail clerks, or factory workers in the government. It would have been nice to see a job-by-job comparison, even though government jobs are fairly unique (e.g. IRS agent, law enforcement officer, judge, etc.),

What do you think?

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Well first off…usually these studies seem pretty tainted by a political slant. What I do like is I generally like CBO’s work so it’s a trusted 3rd party.

My gut says some of this is true:

-In general, I feel government is much more equitable than more organization. What that means is that I think lower grades are generally paid more than they are worth in private sector and senior execs could probably make more outside.

I also think this paragraph is super super important:

For example, thirty-three percent of federal employees work in professional occupations, such as the sciences or engineering, compared with only 18 percent of private-sector employees; in contrast, 26 percent of private-sector employees work in occupations such as retail sales, production, or construction, compared with only 7 percent of federal employees. Professional occupations generally require more formal training or experience than do the occupations more common in the private sector.

Partly because of that difference, the average age of federal employees is four years higher than that of private-sector employees (45 versus 41). The greater concentration of federal workers in professional occupations also means that they are more likely to have a bachelor’s degree: 51 percent of the federal workforce has at least that much education, compared with 31 percent of the private-sector workforce. Likewise, 21 percent of federal employees have a master’s, professional, or doctoral degree, compared with 9 percent of private-sector employees.

Dorothy Ramienski Amatucci

21 percent of federal employees have a master’s, professional, or doctoral degree, compared with 9 percent of private-sector employees.” I am glad this was pointed out. I also worry when studies like this come out, because I think sometimes it is not fair to compare the public and private sector. A manager at a federal agency might make six figures, but get no bonus … while a manager at a private firm might make less, but make a substantial bonus. I know there are many more factors to compare, but I think the point about degrees is something to keep in mind, as well. It has always seemed like an apples to oranges comparison to me, but I would be very interested to hear what others think, too.

Terrence (Terry) Hill

By the way, the House is scheduled to vote on a bill tomorrow to extend the federal civilian pay freeze another year — through 2013. The proposal by Rep. Sean Duffy (R-Wisc.) would also freeze the pay of members of Congress. I’m sure that this CBO study will be referenced in the deliberations.

@Dorothy – I agree that this is a case of apples and oranges (or just maybe sour grapes) comparison. When I used to do salary surveys, we would try to compare similar occupations (e.g. IT Specialists, HR Specialists, Accountants, etc.) with similar experience levels and responsibilities. Education level was always a secondary consideration in making comparisons.