Federal Pay Continues Rapid Ascent - Is this a problem?

Great Debates
21

Yeah, I let my exasperation with your minimalist style run away with me, but I shouldn’t have been rude: sorry about that. Thanks for the explanation.

Yes I did, and no it wasn’t, but thanks for explaining what you meant. I think it would help if you were more willing to provide actual links to cites, or use informative descriptors for them that reference their actual titles, as in “the tables from the Bureau of Economic Analysis data that are linked at the start of the OP’s cite”, rather than just thinking up a vague new name of your own like “source document” to apply to them.

I still don’t see what that has to do with the Cato Institute’s claims that federal civilian workers have been seeing bigger compensation increases than private sector workers. Yes, compensation for military employees has definitely gone up a lot, but compensation for military employees appears to have been excluded from the data considered by the Cato report, so how is your conclusion relevant to this particular debate comparing federal civilian pay to private sector pay?

22

Thank you for being a gentleman.

You are correct, I’ll be more specific in the future.

As I said, you are free to draw your own conclusions, and I made no attempt to be exhaustive. One conclusion is that federal civilian pay is in fact rising faster than all but five private industry sectors. This means that not only is federal civilian pay rising more than average private pay, it is rising faster than all but a very few sectors of private pay. It’s rising in the range of the oil companies and the commodities brokers, which have received much opprobrium for their skyrocketing salaries.

23

But as mentioned averages mean nothing. The only way to truly compare is to compare comparable positions - and these I’d say are comparable. I’d expect several levels of C level management at most large companies make more than government executive levels.

24

WTF?? I think you must mean that the percentage change in average federal civilian pay over the past 11 years is exceeded in only a few sectors of private pay.

It would seem kind of ridiculous to describe an increase in average federal civilian pay from about $48K in 1998 to about $79K in 2008 as “in the range of” the pay increase accruing to securities analysts ($121K to $198K). And even more ridiculous to describe it as “in the range of” the rapidly rising compensation levels of top-level oil company execs (e.g., from $28M in 2001 to $76M in 2007).

Still, an increase of $30K in average pay for federal civilian employees over about 11 years, while it would be laughable to treat it as really analogous to the compensation gains made by Wall Street hotshots or oil company leaders, is nonetheless a fairly hefty rise compared to the stagnant wages of the average middle-class private sector worker, and it would be interesting to know what caused it.

According to the Inflation Calculator, about $16K or a little over half of that increase would be required just to keep up with inflation.

Where does the rest of the increase come from? Well, Ravenman makes a good point that the federal government has been replacing many employees in lower-paid jobs with private contractors, and this article apparently agrees with him that it’s had a non-trivial impact on the composition of the federal workforce in the last decade or thereabouts:

So maybe, and we’d need specific data about the numbers and pay levels of different types of civilian fed workers changing over time to be sure of this, the bigger increase in average compensation for civilian government employees is largely due simply to the fact that the government has been busily shedding its lower-compensated employees into the private sector.

25

Yes, percentage change. The government pay has been rising very fast in percentage terms. Is this a meaningful statistic? Up to you, as I said before, I’m providing data, you can draw conclusions.

However, it is worth noting that Gov’t pay rise in dollar terms is also higher than all but four of the industry categories, so calculating the rise in percentage terms is not an illusion as you suggest. We get the same results whether we calculate it in percentages or dollars.

One note. The graph only shows wages, not total compensation. According to the data, average federal compensation (excluding military) increased from $70,000 to $120,000 over the period. This means that the increase in total compensation (wages + benefits) for civilian government employees is not thirty thousand, it is fifty thousand … which means that their average increase is about the size of my total compensation. Don’t like that.

I’ll be traveling for a few days, I’ll be interested to see what else comes up in this.

My best to all.

26

That strikes me as either (another) example of ineptitude or else flat-out dishonesty and cowardice (motivated by the obvious fact that anything that seems to sneer at the military would not go over well with either the peanut gallery the author is playing to or with Cato’s donors).

27

That is precisely what would be expected if the apparent rise is an artifact caused by comparing apples (the old mix of high-skill and grunt jobs) and oranges (the current mix of more high-skill jobs, with many of the grunt jobs contracted out and thus now shifted to the private-sector statistics). A change in the salary of high-skill jobs will be amplified in absolute terms for the obvious reason that high-skill jobs tend to have a high base salary.

Your evidence that the “rapid rise” is not an illusion is, in fact, additional evidence that it is just that.

28

No, you didn’t. Your cite refers to "“private companies working under federal contract”.

Then why did your cite refer to them as if they were federal employees?

Regards,
Shodan

29

The cite shows a shift in the composition in the federal workforce consistent with the original hypothesis (that its apparent rate of pay increase is illusory, and caused by transfer of low-paid support and service tasks from the federal rolls to private employment). Please try to keep up with the class.

30

I’m not quite following your point – is it that the number of minimum wage employees would be fairly consistent between the private sector, in general, and companies who contract with the government?

If that’s what you’re saying, then you should be aware that the Davis-Bacon act requires the Federal government to pay the local “prevailing wage” in certain types of contracts, particularly for construction jobs. While construction jobs aren’t typically minimum wage, there is constant criticism of Davis-Bacon by Republicans who argue that the law inflates the compensation for construction workers by making it difficult or impossible for contractors who pay less than the prevailing wage to bid on Federal contracts.

So, if your point is that low wage earners would be roughly equally represented in private companies and federal contractors, then Davis-Bacon is an example why that wouldn’t really be true.

If this is off-topic, forgive me if I’m not fully following your point.

31

Government workers are way overpaid when you compare them to industry standard at all but the top levels. There you see the opposite. But these people have other ways of getting monies. Mr Obama (and every other president) pulls in far more than his allotted salary. You also have to pull in things like transportation and living costs.

Look at your own local government and compare a file clerk on a city payroll to a file clerk working at a business. A file clerk is a minimum or slightly higher than minimum job, but in Chicago we have file clerks pulling in 45K.

32

That requires a very generous definition of “top levels” to include ordinary white-collar professionals like scientists, engineers and accountants, and even some lower-level clerical or administrative jobs.

As this 2000 Congressional Budget Office report notes, even clerical positions on average are paid less in the federal government than in the private sector, although the pay gap is much smaller than for professionals:

So your notion of the fat-cat unionized government bureaucrat pulling down big bloated bucks at the taxpayer’s expense, while his counterpart in the private sector struggles to get by on a much smaller salary, is at the very least wildly exaggerated. Most federal employees are not “way overpaid” but rather underpaid relative to their counterparts in the private sector.

Sure, the high-level politicians tend to be much wealthier than their law-school classmates who work for private firms, but remember that many of them were already wealthier before they got into politics. In fact, it’s hard to run a high-level political campaign without significant personal wealth these days; campaigning is bloody expensive.

33

I have been a federal employee for about ten years. The Office of Personnel Management (www.opm.gov) posts civilian pay tables going back for the past 15 years. There is a base GS (General Schedule) pay table, and depending on where in the country you work, there is a locality adjustment layered on top of that to reflect local cost-of-living deviations from the national average. For those not familiar with the General Schedule, your grade is determined by the nature of your work (level of responsiblity, leadership, project management, etc.) and the step increases are essentially pay raises that happen every few years as long as you deliver acceptable job performance. When you reach the top step in your grade, the only way to get increased salary (other than annual COLA’s) is to take a promotion to a job that encompasses greater responsiblity and puts you in the next grade.

Looking at the national base general schedule tables for 1999 and 2009, every grade/step on the table has seen an increase over that time of 31.2 percent. That amounts to an annual increase of just 2.76 percent, hardly what I’d call a “rapid ascent” in federal pay. (Note: there is also a Senior Executive Service pay schedule, for people in high levels of management. The salary range is higher, but the 1999-2009 increase was actually slightly less, about 29.6 percent.)

People hear “federal government” and immediately think of the politicians - the senators, congressmen, and white house staff that they see on TV every day - and it’s easy to think to themselves, “those rich bastards.” But the folks on TV are a tiny percentage of the federal work force. Next time you’re in a national park, ask the nearest ranger what’s happened to his salary over the past decade. Next time you get audited, if you can check your rage toward the IRS agent who’s just doing his job, ask him the same question. Ask any long-term federal civilian employee, and you’ll get the same answer, as dictated by those GS pay tables: on average, 2.8% increase per year.

The Bush administration pushed hard for “competitive outsourcing,” trying to see what jobs currently done by federal employees might be done more cheaply by outside contractors. Usually this ends up being low-level stuff like janitorial, groundskeeping, and cafeteria work. At the same time, more and more high-level research is being done by government-employed scientists and engineers. During my own ten years, my division has hired close to a dozen new engineers, all of whom have either a master’s degree or a Ph.D. Old-timer technicians who lacked the skills to work on the new stuff we’ve been playing with have been bought into early retirement, and replaced by guys who possessed the skills and experience we needed. I don’t have a cite, but I will say that this meshes well with what I’ve heard before, i.e. the nature of the federal work force is different from that of the private workforce. We’re paid more, but we’re doing, on average, different work. Compare a geologist working for the USGS and a geologist working for Exxon-Mobil, and I’ll wager the salaries will be comparable.

34

Recommended reading: Count Thy Blessings (column starts at left of front page).

35

Yeah, I’ve been a gov’t lawyer for nearly 25 years. I make what I consider pretty good coin - but anyone looking at those GS payscales can decide for themselves whether or not I am overpaid.

GS 15-10, the highest non-SES level, tops out in my region just shy of $155K. (I’m not saying that is my current pay level - it isn’t.) Enough to support a mighty fine living IMO. But you have to decide who you are comparing it to. The guys I graduated with who went to private firms are making considerably more than that - but I’m certain they have worked considerably harder than I over the past quarter century. And there are a lot of lawyers working as sole practitioners or for non-profits who are making considerably less than me.

A lot of lower-level secretarial and clerical positions start at GS 5, $33K in my region. Again, you tell me - is that too much or too little for full-time clerical work? IME, during good economic times the gov’t has trouble hiring qualified workers as they can make more in the private sector, but in tough times like today, we get applicants with far shinier resumes.

Another thing, when you talk about compensation, you cannot ignore bennies including pension, and job security.

36

Unless you have topped out at your career ladder, you are also getting step increases along the line. A worker at any particular grade advances from step 1-4 every year, step 5-7 every 2 years, and steps 8-10 every 3 years. And many positions have career ladders. For example a lawyer might be hired in as an 11 and if they work satisfactorily after 2 years they get promoted to 12, and then to 14 another couple of years after that.

So not only do gov’t workers get an average 2.8% COLA increase, but they also get a “raise” to the next step at least every 1, 2, or 3 years - something I am certain many if not most private sector employees would like.

37

Oddly enough, that sound very similar to the last and current jobs(semi-conductor and bio-tech), except the yearly raise was combined COLA and performance (in a weird complicated way). Also it sounds exactly like my wife’s current job (non-profit private hospital), except she gets step increases every year. This is the first year we have been together were neither of is getting a raise.

How many jobs do not increased pay with seniority? Most places may combine seniority with COLA like my current and former job, but it usually happens. Seriously, how long would you work a job if you never got a raise?

The real question to look at would be how much has the pay changed for X-level of years of service over time. Even then, since government pay scales are affected by political factors, you can’t look at any specific period in isolation. I remember there have been a few huge COLA increases in military pay over the years to make up for the fact that for a long time (and maybe still) yearly COLA increases were based on a fraction of inflation (it was politically embarrassing that a large fraction of military families where on WIC).
Jonathan

38

For reference, the BLS has estimated salary data for various industries broken down by occupation.

Here are average occupational salaries for all workers in the US, from May 2008. Here is the same type of breakdown for Federal government employees. (For another couple comparisons, here’s the petroleum industry and here’s the textile industry).

Note that this gives a better comparison than overall averages because it seperates out high- and low-paying professions. However, there could still be other factors–job experience, for example–that are skewed when comparing the federal workforce with the nation as a whole.

39

FedSmith ran a series of articles addressing the report described in the OP.

[ul]
[li]Federal Employees and Their Pay: How They Stack Up[/li][li]Federal Employees Making More Than Members of Congress? How Can That Be?[/li][li]Federal Pay Gap With Private Sector Growing[/li][li]Highest Human Resources Salary in the Federal Government in 2008: $213,005[/li][/ul]

It’s amazing how non-GS and wage grade salary structures skew the reality.

Let’s also not forget the number of civilian federal employees hasn’t change much in the last 70 years. During that same period the US population more than doubled, while the overall federal budget has gone from $20 billion to more than $2 trillion.

The “problem” isn’t federal employees and their salaries/benefits. The problem is all those federal programs they manage that your Congress decides to fund at your insistence.

Disclosure - Federal employee who makes nowhere near what the private sector pays in equivalent jobs I perform.

40

I would say that you are mostly correct. The federal GS scale starts pretty darn low and at the higher level pays significantly less than than their private sector counterparts.

I would also note that the COLA adjustments have not really been keeping up with private sector wage increases from the 70’s through the end of the Clinton years (although there was some catching up during the Bush years because private sector wages were so stagnant) so there is still about a 20% gap between federal pay and private sector pay on average and at the top end, you have to take a severe pay cut to work in the federal government.