Overpaid and Complaining

Bruce Bialosky

4/9/2012 12:01:00 AM - Bruce Bialosky

A few weeks back I took on our federal employees for being delinquent on their taxes to the tune of $1 billion. I received some criticism for that article, principally from readers who thought that government employees were being unfairly singled out. But just as that column appeared, the government confirmed what most knowledgeable people already suspected: federal employees are significantly overpaid.

In January, the Congressional Budget Office (CBO) released a comprehensive analysis of wages paid to federal employees. The report revealed that during the period of 2005-2010, federal employees were awarded much higher compensation than equivalent workers in the private sector. This doesn’t really surprise a lot of people, but the unfairness of this has not buried the media types.

Predictably, public-employee union representatives disputed the study, accusing the CBO of comparing apples and oranges because of an alleged mismatch in educational backgrounds and work experience. But, in fact, the CBO had defeated that argument by partitioning their analysis into five groups: high school diploma (or less), some college, bachelor’s degree, master’s degree, and professional degree or doctorate. Only the last of these groups fared better in the private sector; and, I suspect that if they separated out those with professional degrees, the analysis would show that federal employees with doctorates are also far better compensated than those in the private sector.

The report reveals that the lower your educational level, the better off you are working for the federal government. Those without a college degree get the best deal – a compensation package 36% higher than an equivalent non-government employee. For these folks, wages are 21% higher, and benefits a staggering 72% higher, than those in the private sector. All of which is paid for with your tax dollars, of course.

The analysis, however, appears to have omitted two things. While the accumulated benefits included health insurance, retirement benefits, and vacation pay, it’s not clear whether they contained sick pay and holidays, both of which are usually much more generous for federal employees. You might have noticed that public employee unions are the principal sponsors of legislation to impose generous sick leave, family leave, and holiday pay regulations on private sector employers. This is not an act of benevolence; it’s an act of self-protection.

Possibly the largest benefit to federal employees is completely absent from the study: the airtight security of a federal job. Every year, only 1 in 5,000 federal non-defense employees is let go for poor performance. (And yet somehow, I manage to run into most of the poor performers!) Apparently, the lazy and incompetent only work for private companies.

Reaction was swift from the protected class. Colleen M. Kelley, President of the National Treasury Employees Union and a member of the Federal Salary Council, addressed the issue in an opinion piece in the Washington Post. Unfortunately, after reading her commentary three times, I have yet to discern a meaningful and coherent argument.

Our elected representatives in Washington – except, of course, President Obama and his Democratic buddies – have started to confront this issue. The House has introduced 14 bills (and 11 by the Senate) addressing issues related to federal employment. This includes aspects of their compensation packages along with the huge increase in the number of government employees hired under the Obama Administration. Naturally, there’s little hope that Senator Harry Reid will allow a floor vote on any of these bills as part of his year-long commitment to accomplish nothing in Congress.

Still, our employees are feeling put upon. At a recent labor conference, the same Ms. Kelley said: “Every time we turn around, this Congress is proposing to reach into your pockets to pay for yet another fiscal problem.” Senator Sherrod Brown (D-Ohio) has chosen to align himself with the federal employees instead of the hard-working taxpayers of his state. Speaking after the same conference, Brown asserted that federal employees didn’t cause the government’s financial problems, and therefore shouldn’t have to pay to fix them. Mr. Brown will certainly be receiving a ton of money from these unions. Hopefully, Josh Mandel, who clearly understands that overpaying 95% of the federal workforce adds significantly to our financial mess, will defeat him in the fall.

It will take a new President to solve the problem of an entitled federal worker class. There are far too many of them, they callously don’t pay their taxes in significant numbers, and they’re now proven to be grossly overpaid. And yet, they feel aggrieved. What is wrong with this picture?