Pay Comparisons and Outsourcing
It seems that everybody has a stake in the debate over whether federal employees are paid more than their private-sector counterparts. This week, the latest development in the long-running saga came in the form of a Congressional Budget Office report that compared workers by education level. It concluded that federal workers come out on top in average wages (by a little bit), and benefits (by a lot).
Labor unions are justifiably concerned that this new data may be used to support legislation backing an extension of the two-year federal pay freeze and cuts in employee benefits. But at the Project on Government Oversight, general counsel Scott Amey has another fear: that the report could serve as ammunition to support further contracting out of government work. In a blog post, he writes:
The problem with the public vs. private pay comparison is that it wrongly leads to the assumption that the private sector is cheaper and therefore government services should be outsourced. POGO busted that myth last year—finding that contractors for comparable occupations cost, on average, 83 percent more than federal employees.
When it comes to determining whether contracting out saves the government money, the "elephant in the room," Amey writes, is "total compensation paid to contractor employees and the actual costs (the rates charged as well as all government overhead to hire, administer, oversee, and house contractor employees) to the government for those services."
The only thing that's clear at this point is that the compensation gap issue isn't going away any time soon. After all, we still haven't seen an official report comparing federal and non-federal wages and benefits by occupation. Until that happens -- and probably even after it does -- labor unions, interest groups and politicians will continue to take up sides on this one.