Big pay gap between federal government, private sector

Big pay gap between federal government, private sector

February 19th, 2012 in Opinion Free Press

Yet another study -- this one by the federal government itself -- now shows that compensation for federal workers is much higher than compensation for comparable private-sector workers.

The Congressional Budget Office undertook the study of federal pay and benefits and found a stark disparity between taxpayer-supported government jobs and jobs supported by free enterprise.

Looking at compensation from 2005 to 2010, the CBO found that "Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers."

That 16 percent "premium" -- funded by taxpayers -- comes to nearly $400 billion over 10 years, noted Andrew Biggs, a scholar at the American Enterprise Institute.

The CBO study accounted for private-sector and federal workers' level of education and years of work experience, among other factors, so it made essentially an "apples-to-apples" comparison.

While the gap in wages alone was fairly small -- only about 2 percent -- the gap in benefits was huge: "On average, the benefits earned by federal civilian employees cost 48 percent more than the benefits earned by private-sector employees ...," according to the CBO.

Previous studies have found an even bigger gap between federal and private-sector compensation.

Washington has whole departments that are unconstitutional. The fact that many of the workers in those departments are overcompensated compared with their private-sector counterparts is doubly insulting to taxpayers.