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Many Federal Workers Out-Earn Private Sector Labor: Study

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FEDERAL WORKERS PAY STUDY
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WASHINGTON — The average federal worker earns about 2 percent more than a private sector worker in a comparable profession, though the government's generous pension system means that overall compensation is significantly higher, a government study released Monday said.

Once pension and health benefits are factored in, the average federal worker reaps 16 percent more in total compensation than do private sector workers.

The Congressional Budget Office study said federal workers in lower-level jobs make more than private sector workers but that those with advanced degrees earn more in the private sector. Federal workers with a high school education or less earn about $4 more an hour than private sector employees in similar jobs.

The CBO study comes as House GOP leader have scheduled a vote this week to extend the current federal worker pay freeze for an additional year and have been pressing to make federal employees contribute more for their pensions.

"While millions of Americans continue to struggle with stagnant wages and high unemployment, government bureaucrats in Washington continue to enjoy significant advantages over those whose tax dollars finance their compensation," read a statement by the office of Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee.

The average benefits package for federal workers, including health insurance and a defined benefit pension plan, costs the government about 48 percent more than for private sector workers in comparable jobs. Defined benefit pensions – in which retirement payments are based on a formula involving wages and length of service – are becoming far less common in the private sector.

The federal government employs about 2.3 million civilian workers, or about 1.7 percent of the U.S. workforce. Total compensation for civilian federal workers costs roughly $200 billion a year. Civilian worker pay has been frozen for the past two years in response to exploding budget deficits.

President Barack Obama has proposed lifting the pay freeze next year but limiting the increase to a small 0.5 percent hike.

Supporters of federal workers say the government has difficulty competing for highly qualified workers like doctors and engineers because federal pay isn't as high. Indeed, federal workers with a professional degree or a doctorate earn, on average, 23 percent less than private sector employees. On the other hand, the government offers far greater job security and comparable benefits.

For workers with a college degree, private and public sector wages are about the same, but the government's benefits package means overall compensation costs about $7 more an hour, on average.

Lower-skill workers with a high school diploma or less fare significantly better as government workers than they would in comparable private sector jobs, with 21 percent higher wages and far better health and pension benefits.

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