A Look at Pay for Federal Employees Compared to Their Private-Sector Counterparts

From FEE.org:

Compensation for federal, state, and local government employees cost U.S. taxpayers $1.9 trillion in 2016. This amounts to an average of $15,176 from every household in the United States. President Trump recently moved to rein in some of these costs by canceling pay raises for federal civilian employees, who received $331 billion in compensation during 2017.

Some politicians and an association of federal employees have criticized Trump for this action, saying that federal workers are underpaid and deserve a raise. However, a broad range of studies have found that most federal civilian employees are paid better than comparable workers in the private sector.

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Federal Worker Compensation

Contrary to those claims, a 2017 Congressional Budget Office study compared the compensation of full-time, year-round private sector workers to non-postal, civilian, federal workers in 2011 to 2015. It accounted for education, occupation, work experience, geographic location, employer size, and various demographic characteristics. The study found that:

• Federal workers received an average of 17 percent more total compensation than comparable private sector workers.
• Across various education levels, federal employee compensation premiums ranged from a low of –18 percent for workers with a professional degree or doctorate to a high of 53 percent for workers with a high school diploma or less:

The study did not account for “many characteristics that are not easy to observe or measure,” such as workers’ “natural ability, personal motivation, and effort.” Just Facts is unaware of comprehensive data that quantifies such attributes, but a scientific survey conducted in 2001 found that:

• “59 percent of federal workers say securing a paycheck was more important than doing something worthwhile.”
• “65 percent say job security was more important than helping the public.”
• “only 30 percent believe their organization does a very or somewhat good job of disciplining poor performers.”

The incentives for government employees to perform well are often mitigated by their pay systems. Per the Congressional Budget Office: “For most federal employees, salaries or wages are determined by their rank in a pay schedule,” and

most federal workers compensated under pay schedules move to progressively higher grades as they are eligible. That system ensures that employees in the same type of job who have similar tenure receive similar pay, but it limits managers’ flexibility to reward workers who perform well or to constrain the salaries of workers who perform poorly.

A 2010 study by the U.S. Bureau of Labor Statistics found that full-time private industry workers worked an average of 12 percent more hours per year than full-time state and local government workers. This includes time spent working beyond assigned schedules at the workplace and at home.

In keeping with such realities and the principle of rewarding people for the quality and quantity of their work, Trump also wrote:

Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing federal employees and those with critical skill sets. Across-the-board pay increases and locality pay increases, in particular, have long-term fixed costs, yet fail to address existing pay disparities or target mission critical recruitment and retention goals.

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