The salary gap between federal civilian employees and their private-sector counterparts continued to increase in the past year, according to the Federal Salary Council’s recent findings. The report has energized federal labor unions pushing for pay increases, but some analysts say that what feds lack in salary they receive in generous government benefits.
In 2007, the overall average pay for federal employees, including local salary adjustments, was about 23 percent lower than that of private-sector employees who do similar work, according to the report based on data from the Bureau of Labor Statistics. The 6 percent spike in the pay gap across localities was higher than expected, although the report states that a change in research methods might partly explain the increase.
Congress and the Bush administration are considering pay increases for feds, and managers are preparing for the expected mass exodus of baby boomers from the federal workforce in the next decade.
President Bush proposed a 3 percent overall average wage increase, and draft legislation from Congress would raise federal pay by 3.5 percent. Under current legislation, employees would see an across-the-board 2.5 percent increase.
“With a massive wave of retirements expected to hit the federal government in the next five years, the disparity between federal salaries and private-sector compensation has become a bigger problem than ever,” said Brian McNicoll, spokesman for Rep. Tom Davis (R-Va.), ranking member on the Oversight and Government Reform Committee.
Some economists, such as Chris Edwards from the libertarian Cato Institute, say that when you take into account all the benefits of a federal job, even without a pay hike, federal employees already receive more compensation on average than employees in the private sector.
“There are these nonmonetary benefits you get as a federal worker,” Edwards said. “There are these other benefits: the additional pension benefits, the greater safety and security of the federal job. Those are worth something.”
Edwards, who favors privatizing many government functions, said his analysis of 2006 data from the Commerce Department’s Bureau of Economic Analysis shows that the average federal worker earns more than twice as much as the average U.S. worker in the private sector when the calculations include benefits. His analysis incorporates data on all workers rather than comparing pay for similar jobs as the FSC study does.
New employees entering the federal workforce have different expectations, said John Palguta, vice president of policy at the Partnership for Public Service. “There is allure of public service, but you still have to compete,” Palguta said. “You’ve got to look at what you are offering: It’s pay, it’s benefits, it’s how you pay.”
