If You Did What You Did in Private Sector, Would You Be Paid More?

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This topic contains 16 replies, has 14 voices, and was last updated by  Joe Williams 8 years, 11 months ago.

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  • #166708

    Each week, GovLoop partners with the Washington Post to ask a question of government employees on a timely topic. This week’s question:

    If you did what you did in the private sector,
    would you get paid more money?

    In a recent report, the Government Accountability Office said neither side of the debate over federal vs. private pay has the full story on who gets paid more.

    How does your pay stack up against the pay of a private-sector employee in your field with comparable experience and education?

    Here’s a Federal Diary column with more on the topic:
    And here are a couple related GovLoop conversations:
  • #166740

    Joe Williams
    Participant

    Great question! I have two answers:

    If I were a Government contractor, the answer would be no – I’d make about the same. I base this on salaries of key personnel provided with proposals that I review.

    If I were in private industry not dependent upon federal contracts, the answer would be yes. I base this on private conversations with colleagues with technical backgrounds and either business experience or MBAs who left Government service, and each of them talk about making more with industry than with the Government.

    I can’t say whether this is true across the entire GS payscale spectrum. My experience cited above is limited to the upper end (GS 14/15). So, YMMV.

  • #166738

    Henry Brown
    Participant

    Other than a political hot potato why does this issue keep coming up? … Surely everyone realizes that, even with a federal system, almost no ones pay is the same as anyone else!

    IMO the GAO report only points out the old truism that “numbers don’t lie, only liars use numbers

  • #166736

    Jeff S
    Participant

    No

  • #166734

    Tracey Harriot
    Participant

    As Joe mentioned, it depends on quite a few factors, but based on the salary survey that NCMA publishes each year, it looks like I would be paid more. Although their survey is pretty comprehensive, so it’s hard to say if a 30-something female with a bachelor’s degree, who lives in DC, yada yada yada is making more or less than her equivalent in the private sector.

    But I’m happy with Govt service (for now, at least!), so even if I could be paid quite a bit more “on the other side,” it doesn’t really matter to me. I like the choice that I’ve made. 🙂

  • #166732

    I know, Henry! This discussion has come up 4-5 times on GovLoop…I honestly think folks can jump back and forth pretty easily and keep growing in their career…and people do.

    Public sector = multi sector.

  • #166730

    I think I’ve seen some research, Joe (other than this GAO Report), that highlights the comparison more specifically at higher grade levels. I can’t remember if it was more similar or different…your anecdotal evidence seems congruent with what I remember reading.

  • #166728

    Steve
    Participant

    On the local government side of things, I would make more in the private-sector.

  • #166726

    Mark Hammer
    Participant

    If I could recognize a billable hour, I expect I could make double what I make now. Trouble is, I was a graduate student for too long, and as a result I couldn’t recognize a billable hour if it jumped up, bit me on the America’s Funniest Videos place and drew blood.

  • #166724

    Terrence Hill
    Participant

    It’s been a while, but when I went to http://www.salary.com to compare my salary to the private sector, my salary was in the
    90th percentile for my comparable private sector position, so I guess I am doing well. Nothing to complain about. Who would care if I did complain. It is irrelevant since we aren’t getting a pay increase for the foreseeable future.

  • #166722

    Chris Cairns
    Participant

    Yea, I’d think that pay is comparable until you start getting at an SES level.

  • #166720

    David Dejewski
    Participant

    Personally, I dropped from $166k (not includig my stock options) to about $109k base salary (maybe $130k with locality) when I made the move from private sector to GS-14, step 8. When I left the government as a GS-15, step 7, I was back up around $150k with locality. $160k with my annual bonus. All minus taxes, of course – which are a bear for a W2 wage earner.

    As a business owner, I operate under a completely different set of rules. I have more control over the income I take, my expenses, and the taxes I pay. What I bring home and/or what I can invest is vastly different from what an employee could.

    It’s helpful to keep in mind that private sector compensation, even for ordinary employees, is not limited to a W2 salary. Often, a compensation package can include other benefits to include things like comped medical insurance or a medical expense account, matched 401k’s, a company car, stock options and incentive bonuses (real bonuses – not like government bonuses), and even barter. It’s not sufficient to compare pure salary to salary.

    Sophisticated investors often want to drive their ordinary income (and their tax exposure) as low as possible. To them, it’s not about how much you make, but how much you keep and how far each dollar can get you.

  • #166718

    Corey McCarren
    Participant

    It’s difficult for me to say, but I do know that I have a friend who is deputy director of public relations for a town and is getting paid less than what my starting salary will be doing PR and marketing for a private company in September. He also has a Masters degree in public relations for government, so on paper it doesn’t add up.

  • #166716

    David Dejewski
    Participant

    “…it doesn’t add up.”

    Lot’s of variables go into the income formula. Location, life experience, confidence, flexibility, risk, satisfaction, distribution of the compensation (e.g. the salary + stock options + benefits models), etc.

    In my experience, determining who makes more is rarely a simple matter of looking at a W2. It’s also been largely irrelevant. In my personal life, I let go of any concerns over who made more or less money than I do long ago. I prefer to ask myself if I’m making enough to support a desired lifestyle and my financial goals. If the answer is yes, great. If it’s no, I do something about it.

  • #166714

    John Evans
    Participant

    There is no question that I would make more in the private sector. It’s a given for my position. However, dealing with all the other stuff, having to put up with a lot that isn’t tolerated in the Federal workplace, and the lack of a contract and union protection make private sector employment very unattractive to me.

  • #166712

    Amy
    Participant

    If I were in the private sector, I would get commission (I am in a sales type position for a county agency). On an hourly basis, I would say the positions would pay about the same, but the difference would be the ability to receive commission on sales. The private sector generally pays bonuses as well which are not part of a government position.

  • #166710

    Karen Rivera
    Participant

    Absolutely! Maybe because I am lower level in state government, but I am below the 25% of entry level professionals in my area (from http://www.salary.com), and though I need the extra money being a one income family, I am worried that switching to the private sector would degrade the stability I currently enjoy. I am trying to get promoted, but then who isn’t? I started too late switching careers (my 3rd one) I guess. My dad chose the same career path in the private sector (he should retire already!) and he makes more than 3 times what I make, but then he started in this career much earlier than I did. I do not however, regret decisions I have made including having served my country in the Army.

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