Federal pay has hit the headlines again, with USA Today reporting last week that: “Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis.”
This has provoked outrage from many quarters. Critics say such pay for public employees is unsustainable. Defenders note that the comparison is simplistic.
They’re both right.
The data from the Bureau of Economic Analysis include some low-skill private-sector jobs such as restaurant and retail work that don’t exist in government. A higher percentage of government jobs require college degrees and specialized training, which are factors that generally lead to higher wages. The government has also outsourced many lower-paying jobs to the private sector.
The apples-to-oranges complaint is duly noted. Comparing government work to private-sector work can be tricky. In some cases, government workers in comparable jobs are better compensated. In others, such as law and medicine, they are not. Further complicating matters is that the government is a large employer and, like other large employers, it offers health care benefits and retirement plans, and both drive up compensation.
Still, the overall trend is favorable to public employees, so the critique that this is unsustainable is undeniable.
The reason for the widening gap in pensions and health care coverage is that the private sector has aggressively cut those benefits. Many private companies have eliminated or reduced traditional defined benefit plans for retirees. Government continues to take on future pensioners. On the whole, private companies have asked their workers to pick up more of their health care costs.
As a result, we have private workers whose pay has stagnated and whose benefits have been slashed supporting public employees who aren’t feeling commensurate pain. The government cannot mandate raises for the private sector, but it can look at the widening disparity and the overall federal budget mess and do more of its own cutting. This problem goes beyond the federal government. State and local entities are facing the same structural budget deficits.
Civil service officials and public employee unions can bemoan the trend in private-sector compensation and the pressure that has put on budgets, but government leaders still need to recognize what taxpayers can afford.
The trend has to end.