Study finds federal government pays more than the private sector

Share |
Study finds federal government pays more than the private sector
Font Size:
Default font size
Larger font size

Make a comment about government workers' pay and you're likely to start an argument. Left-leaners will conjure up images of noble, underpaid public servants, while the right will mutter about overpaid bureaucrats. So, who's right?

The nonpartisan Congressional Budget Office attempted to answer that question, at least for the federal workforce, in a study released last week. And the answer is, it depends on which workers you're talking about.

For workers with a high school education or less, a government job is a dream job. They earn 36 percent more in total compensation -- wages plus benefits -- than similarly educated workers in the private sector.

The federal pay advantage declines to 15 percent for workers with a bachelor's degree, and it disappears for workers with a doctorate or professional degree. Those employees earn 18 percent more (again, in total compensation terms) in the private sector than in the federal government.

When the CBO aggregates all those numbers, there is an overall winner:

Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.

Most of that higher compensation comes in the form of benefits. Federal wages, overall, are just 2 percent higher than in the private sector.

The CBO accounts for location, age, experience and other factors, but it takes pains to note that it's impossible to control for every factor that might affect pay:

Even among workers with similar observable characteristics, however, employees of the federal government and in the private sector may differ in other traits, such as motivation or effort, that are not easy to measure but that can matter a great deal for individuals’ compensation.

Motivation? Effort? Now, those are words that could ignite an even more vigorous public- vs. private-sector argument.

 

Read more from David Nicklaus, who is the business columnist for the Post-Dispatch. On Twitter, follow him @dnickbiz and the Business section @postdispatchbiz.

Copyright 2012 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Print Email

Sponsored Links

David Nicklaus

Looking for intelligent discussion of our fast-changing economy? You've come to the right place. Pull up a chair, pour yourself a tall glass of iced tea and join the conversation with business columnist David Nicklaus, who's been observing the St. Louis business scene for more than two decades.

most popular