Report: Federal pay, benefits double private sector's

New figures from the Commerce Department's U.S. Bureau of Economic Analysis show average compensation for federal employees to be double that of private sector workers for the first time.

Federal workers earned an average of $106,579 in 2005, including benefits, or about twice the average private sector compensation of $53,289 with benefits included. This marked the first time federal compensation reached this point; for 2004 the bureau's statistics put it at slightly less than double the private sector's.

Without benefits, the difference for 2005 is less. Federal employees earned an average salary of $71,114 while their private sector counterparts earned $43,917.

Libertarian scholar Chris Edwards of the Cato Institute think tank wrote about the increase on his blog.

"I thought that new data for 2005 would show the federal advantage narrowing due to strong private sector growth," Edwards said. "Instead, the federal advantage increased once again. Average federal wages rose 5.8 percent in 2005 compared to an increase of 3.3 percent in the private sector."

But the growing divide cannot be attributed to out-of-control federal pay, said National Treasury Employees Union President Colleen Kelley. She argued that increased government outsourcing means more blue-collar jobs were in the private sector.

Kelley called for a direct comparison between the same jobs in the private and public sectors.

"The federal workforce is a white-collar workforce and more and more federal jobs are in professional categories, like lawyers [and] accountants," she said. "A much larger percentage of federal workers have college degrees than private sector workers. So the comparison of the white-collar federal workforce to the entire private sector workforce, which includes many blue-collar jobs, isn't apples to apples."

She also said benefits have not increased for federal employees, so any gap would likely be due to a decrease in private sector benefits, such as eliminating health care or pensions.

"This is a huge problem that would be much more worthy of review," Kelley said.

Edwards is an advocate for government downsizing and a transfer of highly skilled jobs to the private sector. In May, he released a paper arguing the pay gap between the public and private sectors runs counter to the current thinking.

In 1990, Congress passed the Federal Employees Pay Comparability Act, which was designed to bring federal employees closer to their private sector counterparts in pay, but was never fully implemented. That program uses the Labor Department's Bureau of Labor Statistics to find salary comparisons. BLS matches salaries for specific jobs.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec