Are Federal Workers Overpaid? (II)

About a year ago I wrote a post about whether federal employees are overpaid. It’s a never-ending debate — and now the Congressional Budget Office has weighed in.

The CBO conducted a study that compared the wages, benefits, and overall compensation of federal employees and private-sector employees who shared certain comparable observable characteristics.  The study noted, of course, that certain important qualities that can have a significant impact on compensation — such as effort and motivation — can’t really be compared.  So, the study focused on objective, measurable factors, like educational levels, years of experience, occupation, geographic location, and demographic characteristics.

The study found that federal workers with just a high school level of education make considerably more than their private-sector counterparts — 36 percent higher in total compensation.  Federal employees with a bachelor’s degree also made materially more, receiving 15 percent higher total compensation.  Only when education levels reached graduate degrees and doctorates did private-sector employees earn more than federal workers, pulling in 18 percent more in total compensation.  Overall, federal workers earned 16 percent more than comparable private-sector workers.

The CBO study probably isn’t the last word on this topic — but it does provide significant ammunition for those who think government workers often are overpaid, and that we should look long and hard at the federal government payroll as a potential target for federal spending cuts.

Federal Facebook Follies

Does the Assistant Secretary for Indian Affairs really need to hire someone to manage a Facebook page for the Department of the Interior, to the tune of up to $115,000 a year?  That’s one of more than 1,000 federal government job openings in the Washington, D.C. area that were advertised in March.

My guess is that most Americans would say that, given our current federal budget deficit and debt issues, the Department of Interior can safely do without someone to set up and supervise a Facebook page.  The fact that the opening is even being advertised for filling suggests that the bureaucrats in Washington, D.C. really aren’t serious about belt-tightening and holding down spending.  The President should instruct all federal agencies to cut their payrolls and consider carefully whether new hires and replacements really are necessary — and if there is any doubt, the new hire shouldn’t be made.

I recognize that refraining from hiring one Facebook editor isn’t going to solve our spending issues by itself, but as I often tell Kish (to her disdain) every little bit helps.  A big part of our federal budget challenge is changing the culture of spending inside the Beltway.  Telling the bureaucrats that their hiring budget has been cut and that they will be held accountable for unnecessary hires is a good first step.

Are Federal Workers Overpaid?

The debate about whether federal employees are overpaid in comparison to private sector employees is never-ending.  Attempts at comparison are criticized for involving small sample size, for not accounting for differences in education level, and on the basis of other factors.  The Weekly Standard now weighs in on this ongoing debate with an article that concludes that, in fact, federal workers are overpaid. I’m sure that the article will not be the last word on the subject.  It does, however, provide ammunition for those who think that we can safely freeze federal employee compensation without losing out on qualified workers.

I’m not sure that debating the compensation levels of federal employees versus private sector employees is really all that meaningful.  To me, the more pertinent question deals with productivity and performance.  Speaking as someone who has worked (twice) in the federal government and also in the private sector, I am convinced that private sector workers must work harder, be more productive, and maintain a higher level of performance.  If you are a salesman, you have to sell up to your quota if you want to keep your job.   If you are a mechanic who botches a few repair jobs, you will find yourself out on the street.

How many federal employees get fired for poor performance?  Not as many who should be, no doubt, because the process of firing federal workers is incredibly difficult and time-consuming.  The result is that crummy workers keep their jobs, and the government hires additional employees to do what the poor employees can’t, or won’t, do.  The lack of a meaningful threat of discharge inevitably results in a bloated workforce.  The real answer to cutting the federal payroll is not to freeze salaries, but to get rid of the absurd limitations on discharging bad employees and require federal employees to meet the same meaningful productivity and performance standards that are applied to private sector workers.