We're No. 1 -- In Public Employee Pay

August 15, 2013

Pay for state and local government employees has gotten a great deal of publicity. Lost in the press attention, however, is that federal employee compensation remains a problem, too, and new data again indicate that Washington, D.C., may be overpaying for the 2 million workers it employs, says Andrew G. Biggs, a resident scholar at the American Enterprise Institute.

In a 2011 paper with Jason Richwine, Biggs concluded that federal workers receive salaries and benefits around 37 percent higher than do private sector workers with similar levels of education and experience. A study by the Congressional Budget Office, using slightly different methods, showed a smaller wage premium for federal workers, but still reached a qualitatively similar conclusion: Federal workers receive pay and benefits 16 percent above private-sector levels.

Data from the Organization for Economic Cooperation and Development (OECD) allows Biggs to compare how U.S. federal government employees are paid relative to central government employees in 18 other countries.

The OECD analyzed the salaries, benefits and paid leave for government employees; the combined value of these three categories equals total compensation. The OECD looked at four main categories of public employees:

  • Senior management.
  • Middle management.
  • Professionals. The OECD examined two specific professional positions, statisticians and economists/policy analysts.
  • Secretarial staff. This category is made up of two groups, senior/executive secretaries and office secretaries/general office clerks.

The key factor is benefits:

  • U.S. federal employees don't merely receive more generous benefits than do private-sector workers; they receive much more generous benefits than do public employees in most other developed countries.
  • The OECD data show that U.S. federal employees' total benefits add up to 37 percent of their wages, compared with 16 percent for central government employees in Australia, 25 percent in the Netherlands and Belgium, 27 percent in Great Britain, and 23 percent across the OECD as a whole.

Source: Andrew G. Biggs, "We're No. 1 -- In Public-Employee Pay," National Review, August 12, 2013.

 

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