Group takes aim at feds, suggests $47 billion in pay cuts

The saga of the “overpaid fed” took a new turn with a conservative think tank’s report suggesting that federal pay could be cut by $47 billion next year.

Heritage Foundation labor policy analyst James Sherk suggested that federal salaries and benefits are 30 percent to 40 percent higher in the federal government than in the private sector—and that better aligning compensation in the two sectors could cut the federal payroll by $47 billion in Fiscal Year 2011.

According to Sherk, the federal pay system gives the average federal employee hourly cash earnings 22 percent above those of the average private-sector worker, and the average annual federal benefit package comes to $32,115 per employee, compared to just $9,882 in the private sector. In the white paper posted July 7, Sherk said federal employees also enjoy a reduced risk of losing their jobs in this sour economy: Since the recession began, federal employment has risen by 240,000 (12 percent), and the unemployment rate for federal employees has risen only slightly from 2.0 percent to 2.9 percent between 2007 and 2009. 

“Claims that this dramatic discrepancy in compensation is warranted because of government workers’ high skills are unjustified,” the white paper said. “Equally unjustified is the fact that federal workers can rarely be fired, no matter how poor their job performance.”

Sherk said that Congress should implement a pay-for-performance system with pay bands based on market priorities, expand the contracting of federal work to private companies and reduce the scale of federal benefits.

The paper did acknowledge that some segments of the federal workforce are not overpaid, such as engineers, employees who work in the physical sciences, and lawyers and economists. Others are underpaid, it said. John Roberts, for example, makes $223,500 a year as chief justice of the Supreme Court and would earn more in private practice, Sherk said.

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