CRS report revisits public-private pay debate

Government employees on average are older and more educated than private sector workers -- factors that generally contribute to higher pay, according to a report from the Congressional Research Service.

Fifty-one percent of full-time public sector employees were between the ages of 45 and 64 in 2010 compared to 43 percent of full-time private sector workers. The report found that federal workers were slightly older than state and local government employees. "Older workers typically have more years of work experience than younger workers," the report said. "Employees with more work experience generally earn more than workers with less experience."

More education typically translates into more pay, too, the report found and public sector workers hold an edge over their private sector colleagues in this category as well. In 2010, 52 percent of government employees had a bachelor's, advanced or professional degree compared to 34 percent of private sector workers. State and local government employees were more likely than federal workers to have at least a bachelor's degree, the report said. "Other things being equal, the higher educational attainment of public sector workers, especially workers with an advanced or professional degree, should result in higher pay for public sector workers compared to workers in the private sector," said the report.

CRS also found that more public sector employees (55.4 percent) than private sector workers (36.9 percent) have jobs in management, professional and related occupations -- positions that typically pay more. The report, however, cautioned that "occupational comparisons between private and public sector workers may be difficult."

The latest CRS report on public and private sector pay revisits controversial political territory. It continues the debate that came to the fore during the 2010 election season over whether federal employees are overpaid, or in the view of some, underpaid. Comparing wages and benefits of government employees and private sector workers is an imperfect science, accounting for many variables including age, education, different pay scales and bonus opportunities.

The report tracked data spanning the decades between 1955 and 2010. In 1955, public sector employment -- including jobs in local, state and federal governments -- accounted for 13.8 percent of total employment in the United States. That percentage rose to 19.2 percent in 1975 and then fell to 17.3 percent in 2010, according to the report. An increase in local and state government jobs largely contributed to the growth between 1955 and 1975; federal employment as a share of total employment fell from 4.5 percent in 1955 to 2.3 percent in 2010, even though there were 664,000 more federal workers in 2010 than in 1955.

Another factor that affects pay in the public and private sectors is union coverage, which can mean that employees who are members of unions pay dues, or are covered by collective bargaining agreements. Since 1979, the number of workers in both sectors covered by unions declined; currently, union coverage is higher in the public sector than it is in the private sector. Most federal employees, however, cannot bargain over pay.

Correction: The original version of this story reversed the dates in a comparison in the penultimate paragraph. There were 664,000 more federal workers in 2010 than in 1955.