GovernmentExecutive.com

The pay gap between private and public sector employees seems to be a given. Just this week, 10 congressmen made their case for a higher 2007 civilian pay raise than President Bush has requested by citing a 30 percent private-public gap reported by the Bureau of Labor Statistics.

"The federal government may never be able to compete with the private sector, dollar for dollar, but we must ensure that we do not fall further behind in the battle for talent," Reps. Tom Davis, R-Va.; Jon Porter, R-Nev.; Steny Hoyer, D-Md.; Chris Van Hollen, D-Md., and others said in a letter to fellow members.

But a new paper from the libertarian Washington-based think tank the Cato Institute argues that the pay gap actually travels in the other direction. Pointedly titled "Federal Pay Outpaces Private-Sector Pay," the paper by Chris Edwards, the institute's director of tax policy studies, makes the case for freezing government salaries.

By bundling federal benefits -- including defined pensions, the Thrift Savings Plan and health care subsidies -- together with wages, Edwards calculated that the average federal worker earned $100,178 in 2004, compared to $51,876 in salary and benefits for the average private-sector worker. Those numbers were based on statistics from the Bureau of Economic Analysis.

"The federal civilian workforce has become an elite island of secure and high-paid workers, separated from the ocean of private-sector American workers who must compete in today's dynamic economy," Edwards wrote.

In an interview, Edwards said he is trying to stir the pot on an issue that has no real adversaries. Federal employee unions are so vocal on pay issues, and Washington-area congressmen, including Republicans like Davis, who chairs the Government Reform Committee, are loyal to the many federally employed voters in their districts, Edwards said.

He said he suspects the BLS studies that find such a marked pay gap, and which do not take benefits into account, are flawed.

"There are questions about how these comparisons are done," Edwards said. "If you, say, look at a government lawyer versus a private lawyer, or accountants, the responsibilities and the hours worked per week can be quite radically different."

Most compelling, he argued, is the quit rate for federal employees, which is quite low and suggests that workers are satisfied with their pay.

Edwards said in his paper that some academic studies have found government workers to be overpaid, but his citation is a 1985 study by Steven Venti at the National Bureau of Economic Research.

Why did he pull from a 20-year-old study? Because, he said, there has been so much agreement in recent years on the pay gap that no one has bothered to complete an updated independent analysis.

COMMENTS

• I have spent a far greater amount of my career in the private sector than the federal government. I am a professional with 16 years experience and a master’s degree. If you do a fair comparison between the skills and responsibilities associated with a high level federal position and a comparable private position, we in the federal government are grossly underpaid. The only reason I stay with the federal government is because of a serious health issue and I need the "golden handcuffs" of "stable" health coverage. GovExec.com reader Posted August 7, 2006 12:35 PM
• I graduated from college in 1973 with a BS in Chemical Engineering. After spending many years moving up from process engineer through management positions to plant manager in the chemical industry I found myself unemployed after a large cutback. I felt lucky to get a position doing NBC work with the Navy. I figured a few years of steady progress and I could again get a better job in private industry like I had always done. When I contacted the recruiters who used to call me regularly with job interview opportunities, I was finally told, "I am really sorry but we can't place you since you work for the government. Private industry perceives government employees as people who set around, read paperback novels and call in sick. The facts don't count." I have been very successful in my career with the Navy and now the Marine Corps as a starter of new programs and the developer of a multitude of new technologies. I have worked in chemical warfare defense, directed energy, command and control systems, non-lethal weapons, sensor systems, as well as many others. I can certainly get a job with a support contractor, or a company doing business primarily with the government; however, I would not have the opportunity to start new technologies that I have with the Marine Corps. I would likely have one product in one technology area to work on instead of the 15 that I now have. I am certain that had I held out a little longer rather than taking the job with the Navy when I did that I would likely be making significantly more money, but I am doubtful that my career would have been as enjoyable. George Gibbs Posted June 8, 2006 6:23 AM
• I just could not read any more of this article. Unfortunately, until you have walked in my shoes then you can speak on the subject of pay. I can't speak for all IRS-Offices but I can speak to my job and position. I invite you or anyone come to the Detroit District office and see the number of people we help each day with the number of workers, and how much we are asked to remember with the inadequate machines, etc. If the message seems to be antagonizing, well it's just that I am little rattled. I am upset and confused. Where did you receive your conflicting information? Let my work speak for me. Orena Perry Posted June 1, 2006 2:56 AM