Overpaid or Underpaid, Feds Had Quite a Week
The role of government, and of federal employees, during a disaster and its aftermath once again has captured the country’s attention, as the super storm that started out as Hurricane Sandy continues to plague the East Coast.
During a week when many people praised federal employees (e.g., the Federal Emergency Management Agency, the Coast Guard and the U.S. Postal Service) for doing their jobs exceptionally well, while others criticized Washington-area federal agencies for closing for two days, it’s somewhat fitting that yet another analysis is out commenting on the pay gap between public and private sector workers.
The Federal-Postal Coalition released an analysis Friday that criticized a January Congressional Budget Office report concluding federal employees are paid 16 percent more on average in total compensation (including benefits) than workers doing similar jobs in the private sector. “These conclusions are not consistent with the Federal Salary Council, which found in its October annual report that federal employees are underpaid approximately 34.6 percent,” the coalition stated in its analysis, calling CBO’s approach to the study “flawed.” That’s precisely the problem with this debate: Depending on the perspective, different methodologies, data and variables result in vastly different findings. The Federal Salary Council uses data from the Bureau of Labor Statistics, which has consistently found a pay gap in favor of the private sector.
CBO analyzed payroll data from 2005 to 2010 among feds and private sector workers based on similar occupations, employer size, demographics, geographic location and years of work experience, among other criteria. CBO’s bottom line: less educated feds earned more in total compensation than their private sector peers, while more educated feds tended to be underpaid compared to their counterparts in industry. The government spends about $200 billion annually on federal employees’ wages and benefits.
The Federal-Postal Coalition took issue with several aspects of the CBO study, including the office’s decision to examine average compensation costs for employees in the federal and private sector workforces and account for differences in characteristics, “rather than comparing equivalent jobs done in each sector.” The coalition also criticized CBO’s finding that benefits for feds were 48 percent higher than for those in the private sector. “Benefits for federal employees are the same regardless of occupation, while benefits vary greatly in the private sector,” the coalition’s analysis stated.
In addition, CBO’s time frame for its study -- 2005 to 2010 -- didn’t take into account the two-year federal civilian pay freeze that began in 2011, the coalition said.
Of course, the coalition, which represents 4.6 million feds, retirees and postal workers through various organizations, has a vested interest in fighting the perception of an overpaid, underworked federal employee. “The CBO study serves to worsen the public perception of this issue as some may inappropriately use the conclusions drawn to justify continuing federal pay freezes and further reduction of compensation, which would detract significantly from the efficiency of the federal workforce,” the group’s analysis said.
The CBO study, however, has plenty of fans, including American Enterprise Institute scholar Andrew Biggs, former deputy commissioner of the Social Security Administration, who has performed his own pay gap research.
It’s worth pointing out that both BLS and CBO are very well-respected, nonpartisan government agencies. That doesn’t stop folks on both sides of every debate from using their research and data to support their specific arguments.
This week, President Obama said he did not want the government’s response to the storm on the East Coast to get bogged down in red tape. In that spirit, here’s a reminder about a final rule on travel for feds working on disaster relief that was in last week’s Pay and Benefits column:
GSA published a final rule allowing agencies to approve travel expenses without GSA’s sign-off for employees responding to presidentially declared disaster areas. Prior to the change, agencies were not authorized to provide blanket approval for employees to incur expenses that exceeded the government’s lodging and travel rates without asking GSA first. “Now, federal agencies can process these waivers independently without GSA when processing expenses for temporary duty travel to disaster relief areas,” [GSA spokesman Dan] Cruz said. “This minor change offers a more streamlined policy for federal agencies.”