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Feds earn 16% more than private sector, nonpartisan report shows

Jan. 30, 2012 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Federal employees receive 16 percent more higher pay and benefits than their private-sector counterparts, a CBO report showed.
Federal employees receive 16 percent more higher pay and benefits than their private-sector counterparts, a CBO report showed. (Blair Wheeler / Staff)

Federal employees overall receive 16 percent higher pay and benefits than they would in the private sector, the nonpartisan Congressional Budget Office said Monday.

But compensation levels vary greatly by education level, according to CBO.

Federal employees with no more than high school diplomas receive pay and benefits worth 36 percent more than compensation received by comparable employees in the private sector. But feds with professional degrees or doctorates receive 18 percent lower overall compensation than their private-sector counterparts, CBO found.

Benefits accounted for much of the discrepancy. Feds with no more than bachelor's degrees earned roughly the same average hourly wages as their private-sector counterparts, but received benefits worth 46 percent more on average. Overall, total compensation for feds with bachelor's degrees cost the government 15 percent more than private-sector firms pay for similar workers.

CBO said that defined benefit pensions which are available to all federal employees but are growing less-common in the private sector are driving most of the difference in benefit costs.

The report, requested by Sen. Jeff Sessions, the ranking Republican on the Senate Budget Committee, looked at data between 2005 and 2010.

CBO's findings on pay alone differ wildly from the government's official position, which is that federal employees are vastly underpaid when compared with private-sector counterparts. A nine-member group of labor relations and pay experts and federal employee representatives, called the Federal Salary Council, studies how federal and non-federal pay compares and advises the president on how big of a raise to give to federal employees. Last year, the Federal Salary Council concluded that General Schedule salaries fell 2.25 percentage points further behind private-sector wages, and said feds suffered a pay gap of 26.3 percent behind their private-sector counterparts.

Critics of the salary council say that can't possibly be so when private-sector wages have been hampered by a recession and vast unemployment for years.

Rep. Dennis Ross, R-Fla., a frequent critic of what he sees as federal overcompensation, said on Twitter that CBO's report "reinforces the notion that wage rates, especially amongst non-management, are hugely out of sync with [the] private sector."

CBO's findings support conservatives' conclusions that federal employees are overcompensated, but CBO reported a much smaller pay difference than organizations, like the Heritage Foundation, found.

For example, Heritage's James Sherk who spoke to CBO during its research said at a March 2011 House hearing that he found federal employees earn hourly wages that were 22 percent higher than their private-sector counterparts. But CBO found that the federal government paid 2 percent higher average wages.

Sherk also concluded that when benefits are included, the federal compensation premium rises to between 30 percent and 40 percent. That is much higher than the 16 percent premium CBO estimated.

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