CBO: Government workers paid more than private sector counterparts

Alexis Levinson Political Reporter
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Government workers earn more in combined wages and benefits than their counterparts in the private sector, according to a Congressional Budget Office (CBO) study released on Monday.

All told, government shells out 16 percent more to employees than the private sector.

The study was commissioned by Sen. Jeff Sessions, the ranking member of the Senate Budget Committee, to look into what federal government workers are paid compared to those in comparable positions in the private sector. The report notes that this has been a source of concern as the government seeks to cut spending.

The study compared persons with similar education levels, “years of work experience,” occupation, size of their employer, “geographical location,” and “demographic characteristics.” Obviously, the report notes, there may be other differences between the federal workforce and that of the private sector, but the authors were unable to quantify those.

The resulting data found that wages for someone whose highest level of education was a high school diploma would earn, on average, 21 percent more in wages and 72 percent more in a benefits package than their private sector counterpart. All told, the total compensation — wages and benefits combined — is 36 percent higher for government workers.

For those with a bachelor’s degree, there was little difference between their earnings in the private and government sector. But government workers receive about 46 percent more in benefits, amounting to a 15 percent greater total compensation package.

The reverse is true for increasingly educated people, with a professional degree or a doctorate. Private sector workers with these qualifications make on, average, 23 percent more than their peers in the government jobs, though both groups earn similar sums in benefits.

All told, compensation for government employees with advanced degrees is 18 percent less than than in the private sector.

The report noted that the difference in compensation between the highest-paid and the lowest-paid government workers is very small, which the CBO suggested “may reflect the constraints of federal pay systems. Federal pay systems make it harder for managers to reward the best performers or to limit the pay of poor performers employees.”

“[T]he federal government,” the report continued, “spent about $200 billion in fiscal year 2011 to pay” its workforce.

Additionally, the CBO pointed out that some of the reasoning behind higher compensation “is the ability to recruit and retain a highly qualified workforce.” The analysis, however, does not extend to value judgments on what compensation policies the government should employ.

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