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WSJ recently ran a Chris Edwards editorial titled “Welcome to Club Fed”.
The closest thing to a lifetime sinecure in America is a federal government job, and now it turns out that it's also a very lucrative way to make a living.
New data from the U.S. Bureau of Economic Analysis confirm that the average federal civilian worker earns $106,579 a year in total compensation, or twice the $53,289 in wages and benefits for the typical private worker. This federal pay premium costs taxpayers big bucks because Uncle Sam's annual payroll is now $200 billion a year. No wonder that, with a per capita income of $46,782 a year, Washington, D.C. is the fourth richest among the nation's 360 metropolitan areas.
Edwards also discussed the issue back on August 2 at Cato at Liberty, when he noted:
The data for 2005 shows that compensation for the average federal civilian worker ($106,579) is now exactly double the average compensation in the U.S. private sector ($53,289).
The federal pay advantage has been soaring in recent years. The ratio of average federal to average private compensation increased from 1.51 in 1990, to 1.68 in 2000, to 2.00 today.
Holy cripes that’s alarming. This nation needs a political party dedicated to smaller government. Don’t you dare say the Republicans, you fool.
The Cato at Liberty piece was linked by Life, Liberty, and the Pursuit of… As Kip and I noted in the comments section, the numbers being presented by Cato at Liberty are only telling a very small part of the story. What exactly are these federal jobs? How do they compare with the compensation for state or local government jobs? I’m not playing Devil’s Advocate here; It’s just that I would really like to know. It might better paint the picture for me.
These are federal civilian positions. What low-paying federal civilian positions are there that might pull down the average? Could it be that the federal government contracts out all of the menial stuff, both raising its own average salary and lowering that of the private sector? Perhaps playing Devil’s Advocate isn’t such a bad idea…
Well, Edwards does address that:
The structure of that workforce has also changed over time. There are fewer low-pay typists and more high-pay computer experts in the government today than there were a generation ago. But that doesn't explain why, as the BEA data show, federal wages have risen 38 percent in just the past five years, compared with 14 percent in the private sector…
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. They often have generous holiday and vacation schedules, flexible hours, training options, incentive awards, flexible spending accounts, and a more relaxed pace of work than private-sector workers.
Perhaps the most important benefit of federal employment is extreme job security. According to Bureau of Labor Statistics data, the rate of layoffs and firings in the federal workforce is just one-quarter the rate in the private sector. All these advantages in worker benefits suggest that, in comparable jobs, federal wages ought to be lower than private-sector wages.
One sign that federal workers have a sweeter deal than they acknowledge is the rate of voluntary resignation from government positions: just one-quarter the rate in the private sector, the BLS data show. Long job tenure has its pros and cons, but the fact that many federal workers burrow in and never leave suggests that they are doing pretty well for themselves.
The numbers just don’t lie. Edwards also linked to the Bureau of Economic Analysis website for those who would like to parse the numbers.
Says Radley Balko at The Agitator:
I'm sure there'll be a flury of letters to the editor from federal bureaucrats defending their existence. But the vast majority of them are parasites. Not only do they add nothing to the economy, they actually slow it down, both by sapping tax dollars for their salaries, offices, and benefits, and by the very nature of their jobs, most of which raise the cost of doing business in America. Not to mention the amount of money American individuals spend on lawyers and tax accountants, either to lobby to make sure the sea of regulations are more to their liking, or merely to help them understand the law so that they can comply with it.
And that's not even touching the damage the ever-expanding army of federal law enforcement officials is doing.
Edwards was further quoted by Cato’s own Greg Garner:
In the May 2006 edition of Cato's Tax & Budget Bulletin, Edwards urges Congress to "restrain federal compensation by freezing federal wages for a period of years and examining fringe benefit programs for possible savings." He writes, "In the longer term, the coming surge in federal worker retirement as baby boomers enter their sixties offers an opportunity to downsize federal agencies without problematic layoffs or buyouts. As government air traffic controllers, space scientists, and others retire in coming years, these activities should be handed over to the private sector so that they can be better managed and have more efficient compensation policies."
Hear, hear!
More on the subject of federal unions at PowerBlog:
Labor union membership in the private sector has declined steadily and stands at about 8%. By contrast, in the government sector labor union membership stands at around 37%.
This is itself a huge disparity, and one that I would think has large effects on issues of pay, benefits, and job security. Thus, I think there has to be a link between the rates of union membership and compensation between the public and private sectors.
As Dr. Charles Baird notes in a radio interview, “In the government sector there is no declining unionism, none at all.”
Bingo.
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The $200,000 annual salary, once regarded as an extravagance in local government, is now commanded by a growing number of officials across the Washington region, according to a review of payrolls by The Washington Post.
http://www.washingtonpost.com/wp-dyn/articles/A2352-2004Dec15.html
Also, it's not just federal. Here in Montgomery County the salaries are staggering. And although I can't find the source for this, I recently heard that some 200+ county officials in Fairfax are making over $100k a year. It's astounding. And it's really going to rewrite what children are someday going to cite as what they want to be when they grow up. Instead of 'fireman' or 'astronaut', they'll be saying 'I wanna be the director of the Montgomery County Department of Liquor Control and make lotsa money!'
Posted by: Rammage at August 17, 2006 12:57 PM
I'm in my mid 40s and just landed a job with the federal government. Frankly, I don't know what you folks are talking about. I work in IT and my typical workweek is 50 hours, some weeks close to 70. I'm on-call 7x24x365, weekends, holidays, etc. I make $30K less than I did in the private sector, we have no dental insurance, no short or long-term disability. If I become sick and run out of leave I will not be paid and will lose everything... because again, there is no disability insurance. After 1984 government employees were put on social security and our matching "401K" plan is no different than what I had in private industry. I'm in constant fear of losing my job, having it outsourced to a contractor. As for vacations I haven't had one since August of 1983.
I came to the feds because like you fools, I believed all the hype about the wonderful benefits. Wrong. In fact the benefit and salary compensation is the worst I've ever had.
Posted by: Tom at August 23, 2006 2:03 PM
Holy crap, that was defensive. Look, Tom, the numbers don't lie. Maybe your job is one where the benefits aren't cushy, and it pulling the average down, but it's like you didn't read the article at all, just our headline. Refute this:
The data for 2005 shows that compensation for the average federal civilian worker ($106,579) is now exactly double the average compensation in the U.S. private sector ($53,289).and I'll change my mind. Until then, the evidence is that federal civilian positions are cushier.
And I don't see how 23 years without vacations in the private sector has anything to do with the federal job that you "just landed". Sounds like the private sector wasn't all roses, either.
Posted by: Wulf
at August 23, 2006 2:45 PM
I live in Montgomery County as well and both of my parents have the cushy Federal Government jobs with tons of benefits that are described in this post. The only thing is my mother is going to lose hers because her institute is (yes, I realize this sounds amazing) being slowly written out of the budget year by year. Neither of them actually make quite as much as 106k, although my father probably comes close with bonuses.
Posted by: Rachel at August 24, 2006 11:10 PM
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