Workforce Wonk

By Alyah Khan

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Is federal pay fair? That depends on how you count.

The debate about the fairness of federal employee pay reached a fever pitch this week when House Republicans attempted to make their case that feds are overcompensated.

At a March 9 hearing held by the House Oversight and Government Reform Committee's Federal Workforce Subcommittee, witnesses and lawmakers cited figures galore to back their arguments about pay.

Subcommittee Chairman Rep. Dennis Ross (R-Fla.) went so far as to hang a sign behind his chair that said federal employees on average earned $101,628 in total compensation (including benefits) in 2010, while the average private sector worker earned $50,462.

The purpose of the hearing was to determine whether feds are compensated fairly, but, in the end, there was no clear answer. That’s because it depends on who you’re asking and how they're counting.

Office of Personnel Management Director John Berry explained in his hearing testimony that “raw comparisons of average pay between federal and private sector employees mask important differences in the skill levels, complexity of work, scope of responsibility, size of organization, location, experience level, and special requirements, as well as exposure to personal danger.”

Jobs with similar-seeming titles and duties are not necessarily comparable, such as federally employed cooks who may earn more than cooks in restaurants -- because they work for the Justice Department in the dangerous environment of prisons, Berry said.

Berry also disputed a a claim that federal attorneys make more than private sector attorneys. "In fact, while more than half of general attorneys in the federal government earn less than $90,000 in their first year of service, the median first year salary for comparable attorneys in the private sector is $145,000," Berry said. 

However, other witnesses said that research spanning the political spectrum reveals federal employees are paid more than they would get working for private businesses.

“The federal pay system unnecessary inflates federal pay,” said witness James Sherk, a senior policy analyst in labor economics at the Heritage Foundation. “My research shows that on average federal employees earn hourly wages 22 percent higher than otherwise comparable private-sector workers.”

Sherk added that the inflation of federal pay is a consequence of the General Schedule, which “primarily bases pay on time served rather than performance. Federal employees who put in a minimal amount of effort automatically earn within-grade increases in pay.”

Andrew Biggs, a resident scholar at the American Enterprise Institute and another witness, similarly said “several decades of economic research” reveals that federal employees do receive greater compensation than those in the private sector.

The studies, summarized in the 1999 Handbook of Labor Economics, generally find a salary premium of 10 to 20 percent over otherwise similar private sector employees, he said.

Biggs noted that his analysis wasn’t intended to comment on feds’ productivity, the importance of their jobs, or the size of the workforce.

Berry, although he said that comparing the pay between feds and private-sector employees even in the same occupations can be misleading, concluded that what the government pays its workers is fair.

Max Stier, president and CEO of the Partnership for Public Service who also testified at the hearing, offered a compromise between the opposing views, saying that some feds are underpaid, others overpaid and still others are paid appropriately. (See a related Feb. 4 Workforce Wonk entry)

It ultimately seems that findings on federal pay can reflect what a person wants them to reflect. And because Republicans are in no rush to align with the Obama administration, it’s likely that they will continue to push their belief that feds are overpaid.

However, there will be always be differing views on the issue of federal pay, making it near impossible to say with certainty who is right in this discussion.

What do you think about the ongoing debate over federal pay? Are feds underpaid, overpaid or does it just depend on the job?

Posted by Alyah Khan on Mar 10, 2011 at 12:20 PM


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