Tag: federal wages

This Week in Government Failure

Over at Downsizing the Federal Government, we focused on the following issues this past week:

Follow Downsizing the Federal Government on Twitter (@DownsizeTheFeds) and connect with us on Facebook.

Furor over Government Employees

Concern about the pay, benefits, and performance of government employees seems to be growing. Chris Edwards’s articles on how government pay is outpacing private-sector pay have generated media attention, cartoons, and angry rebuttals from the head of the federal Office of Personnel Management. Steven Greenhut has a new book, Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, and is writing lots of newspaper articles on the high costs of government unions, also the topic of a recent Cato Policy Analysis. New Jersey unions are not finding much sympathy as they try to hold on to their raises, benefits, pensions, and work rules in the face of Gov. Chris Christie’s attempt to cut the budget. Liberal journalist Mickey Kaus is running for the U.S. Senate, trying to warn California’s voters and the Democratic Party about the excessive power and destructive influence of public employee unions.

And now Saturday Night Live. The zeitgeist-riding comedy show had a truly harsh sketch this weekend about the “Public Employee of the Year Awards.” It touched every element of popular resentment toward government workers: “people with government jobs are just like workers everywhere – except for the lifetime job security, guaranteed annual raises, early retirement on generous pensions, and full medical coverage with no deductibles, office visit fees, or copayments” – “retirement on full disability” by an obviously young and healthy worker – “Surliest and Least Cooperative State Employee” – “3200 hours [a year] on the job, all of it overtime” – New York school janitors living in Florida – employees with two current jobs and full disability – an entire workday at the DMV without serving a single customer – no-work contracts –  surprisingly early closings – and “he’s on break.”

Time for unions to start worrying?

Federal Wages Fly High

Yahoo News is highlighting the story “10 Jobs With High Pay and Minimal Schooling.” Topping the list: air traffic controllers, who work for the federal government.

These workers make sure airplanes land and take off safely, and they typically top lists of this nature. The median 50% earned between $86,860-142,210, with good benefits. Air traffic controllers are eligible to retire at age 50 with 20 years of service, or after 25 years at any age.

Huge salaries and retirement after 20 years – sweet deal!

Air traffic controllers seem to provide a good illustration of my general claim that federal workers are overpaid.

I don’t know what the proper pay level for controllers is, but I do know that we should privatize the system, as Canada has, and let the market figure it out.

Your Tax Dollars at Work

The National Park Service announced Friday that it has removed its superintendent at Gettysburg National Military Park and reassigned him to work in a cultural resources office as an assistant to the associate director. His job duties have not yet been determined.

John A. Latschar said Thursday that his demotion was in response to the public disclosure of Internet activity in which he viewed more than 3,400 “sexually-explicit” images over a two-year period on his government computer – a violation of department policy. The misconduct, which Latschar acknowledged in a sworn statement, was found during a year-long investigation by the Interior Department’s inspector general and was documented in an internal Aug. 7 report obtained by The Washington Post.

The reassignment came after a Post report Monday about the results of the investigator’s forensic analysis of Latschar’s computer hard drive, which showed “significant inappropriate user activity” and numbered the “most sexually-explicit” images at 3,456….

David Barna, spokesman for the National Park Service, said Latschar’s annual salary of $145,000 and his pension will not be affected. The cultural resources office is based in Washington, but Latschar will commute from his home in Gettysburg to a Park Service office about 30 miles away in Frederick, Barna said.

Hey, can I get that deal? If I download 3,500 pornographic images on my office computer, can I get reassigned to a telecommuting job with no defined duties at my current salary and pension? As superintendent of a very visible national park, Latschar had a job with a lot of pressure, lots of criticism, management challenges, etc. Now he’s going to be some sort of undefined “assistant to an associate director in a cultural resources office,” but he won’t have to actually go to the cultural resources office, and he’ll still get the same pay and benefits he was getting for doing a real, stressful job. Does anyone in the federal government ever get fired?

Federal Pay Continues Rapid Ascent

The Bureau of Economic Analysis has released its annual data on compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D here). The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.

The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.

Figure 1 looks at average wages. In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $50,028 for the nation’s 108 million private sector workers (measured in full-time equivalents). The figure shows that the federal pay advantage (the gap between the lines) is steadily increasing.

Figure 2 shows that the federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909.

What is going on here? Members of Congress who have large numbers of federal workers in their districts relentlessly push for expanding federal worker compensation. Also, the Bush administration had little interest in fiscal restraint, and it usually got rolled by the federal unions. The result has been an increasingly overpaid elite of government workers, who are insulated from the economic reality of recessions and from the tough competitive climate of the private sector.

It’s time to put a stop to this. Federal wages should be frozen for a period of years, at least until the private-sector economy has recovered and average workers start seeing some wage gains of their own. At the same time, gold-plated federal benefit packages should be scaled back as unaffordable given today’s massive budget deficits. There are many qualitative benefits of government work—such as extremely high job security—so taxpayers should not have to pay for such lavish government pay packages.

Update: I respond to some criticisms of this post here.

Update 2: Compensation data for federal workers vs. other industries here.

Update 3: In September, the government revised the data for private sector workers. On 9/30/09, Figure 1 and the related text were updated to reflect this change.

Federal Workers Not Underpaid

The head of the Office of Personnel Management claims that federal workers are underpaid compared to private sector workers by 20 percent, on average. Federal unions and other cheerleaders for the bureaucracy have been making similar claims for years.

I’ve pointed out the dramatic acceleration of federal compensation over the last decade and the excessive generosity of federal worker benefits.

Federal workers are not underpaid.

Now a Human Resources expert writing in The Washington Post backs up my claims. Lily Garcia writes:

The primary advantages of working for the federal government are generous benefits, solid pay, and relative job security, a combination that is challenging to find in the private sector, even in the best of times … In addition to these benefits, federal employees, contrary to popular belief, are paid relatively well.

One policy implication is that federal worker compensation would be a good place to look for budget savings to reduce the federal deficit. We could start with a two-year freeze on federal salaries to save about $20 billion. During a recession, private wages are not increasing, so why should federal wages?