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Sunday, August 20, 2006
Paul Jacob :: Townhall.com Columnist
The great wage gap
by Paul Jacob
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Let us now praise the underpaid, selfless civil servant.

Wait — does such a person exist in federal employ?

Excuse me while I chortle.

Oh sure, union officials, civics texts, and those blue-ribbon panels set up by defensive politicians often imply (and sometimes baldly assert) that government workers receive less pay than private employees. Sometimes they even bring up ideas like "selfless service."

Add a touch of cynicism to this, and you might say that government workers exchange higher pay for job security. (It can sure be hard to fire a bureaucrat.)

But it's high time to dismiss the myth. As the Bureau of Economic Analysis reported this month, federal civil servants receive far, far more in wages and benefits than workers in the private sector. Indeed, twice as much.

Average compensation for federal civilian workers last year came to $106,579 — which Chris Edwards of the Cato Institute notes is "exactly twice the average compensation paid in the U.S. private sector." Throw out the benefits and the difference is less, but still a whopping 62 percent more for the federal worker.

Of course, past figures used to bolster up the "underpaid civil servant" notion ignore benefits and consider just the nominal wage rate. But today's 62 percent difference is hard to ignore, isn't it?

But face it: nominal wages aren't real wages; for a true comparison we must add on all the benefits, as Edwards does: "Federal workers receive generous health benefits during work and retirement, a pension plan with inflation protection, a retirement savings plan with generous matching contributions, large disability benefits, and union protections." Let me put a stop to transcribing here. There's a lot more, and I don't get paid enough to risk carpal tunnel.

Figuring in all the benefits, Edwards suggests that government employees should be paid less than private sector employees, not more.

Nice idea, but to get that to happen, wouldn't we first have to fire the unions? Hmmm.

Now, the mere suggestion of lowering compensation — or even just curbing scheduled compensation increases — might be enough to incite incivility amongst our civil servants. But the point of bringing the matter up is not for the emotional reactions or to start a class war between net tax consumers and net taxpayers. It's not that federal employees are evil, deserving to be punished. They are simply overpaid.

So, why is federal employee compensation so high?

Well, here's one big reason: In bad times, when private sector wage increases grind to a halt, federal wages rise merrily upwards.

There are others, more basic in nature.

Think about it: Who decides the pay? Legislators.

A century ago and more, during the days of the "spoils system," one tried to get government jobs for people not because the jobs necessarily paid that well, but because they paid well for the amount of work done. Government work was a good place for artists or college grads from liberal schools. That is, for people who couldn't make it as artists and artisans and preachers and teachers, people for whom clerking in private practice was something worth shirking. Nathaniel Hawthorne famously wanted federal employ. In those days, government jobs were rather like short-term sinecures (often limited to the term of the party in office). A federal job was great haven for a novelist waiting to crank out a best seller.

Nowadays, of course, the spoils system is over. So to speak. Fewer people get jobs in government because they know someone who knows the new president or the newly elected Senator. We have a "more efficient" system now, the civil service. You have to take tests. And it certainly helps to sport a college degree. But once you get hired, it's hard to get fired, and your wages keep going up and up.

Looked at one way, it's an improvement over the old way of doing things. Continued...

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About The Author
Paul Jacob is a Senior Advisor at The Sam Adams Alliance, a Townhall.com member group. His daily Common Sense commentary appears on the Web, via e-mail, and on radio stations across America.
 
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Subject: The Great Wage Gap
Having recently retired with 40 years of civil service, my vantage point is somewhat more intimate than Mr. Jacobs' in the matter of the great wage gap. While he was clearly correct in his analysis, conditions are perhaps worse than he realizes. Within DA, for example, supervisors are authorized to classify (establish the grades) their subordinate positions, inevitably leading to increases in their own grades. In Korea, the number of GS-15s has risen from 1 or 2 in 1992 to about 55 now. There has been virtually no change in the Army's mission there during that time. GS-15s make big money, and, overseas, incredibly generous other monetary benefits. It's a disgrace. As to "selfless service", there is none. It's every man for himself. If the service were selfless, these bureaucrats would not constantly lobby for higher grades and benefits.

overpaid government workers
As a federal classification specialist for over 25 years, I can tell you this: the average pay of federal workers is approximately 20% more than it should be based on the feds own classification system. The current class system is in shambles, completely ignored by its overseer, OPM. The result is a federal workforce that is overgraded (misclassified, i.e., GS-15's doing GS-13 work, GS-14's doing GS-12 work, GS-13's doing GS-12 work)at least one average grade based on its own system. That equates to overpayment of approximately 20 billion per year government wide. If they were classified correctly to the work they are doing, the wage gap would be much less. Combine that with locality pay, which was instituted in the 90's and a typical senior specialist is making 90-100K instead of 70-80K. Of course, this is especially prevelant in D.C. where it is simply out of control. I've been trying for years to get someone to listen to me and feel like Karen Silkwood. And the gap is only going to get larger due to the new pay for performance plans being put in place. In a few years, senior specialists will be crossing the 200K threshold (on the guise of completing with the private sector!) Do remember however, regular workers in private industry are getting thrashed so the answer isn't necessarily to bring everyone down as well. Everyone knows the pay gap at the top and bottoms of private industry is ever increasing and at an all time high. Tightening the federal classification system and finding a happy medium in the private sector would seem to be in order.
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