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Stunning wages/benefits for federal workers

Tuesday, October 27, 2009

Having first been tipped off to this particular set of data via this item over at the Daily Bail, the details behind the charts get even more interesting the further you look.

In short, the gap between wages and benefits between federal workers and the private sector has grown to stunning proportions and is accelerating rapidly.

As if the wage differential isn't bad enough - some $29,000 a year! - while private sector workers now get an average of about $10,000 in benefits every year, the average federal worker receives a stunning $41,000 in benefits.

The average combined wages and benefits for federal workers is $120,000!!!!

As a point of reference, this is about $8,000 higher than computer system designers.

Chris Edwards at the Cato@Liberty blog had a look at the most recent data from the Commerce Department and put together a few charts in this post over the weekend which are just mind-boggling.

They are certainly worthy of a little poking around by yours truly who has long marveled at how well gubment workers have made out over the last ten years, after successfully playing catchup (and then some) following the big wage gains in the private sector during the 1990s.

Anyway, here's the news from Cato:

Federal Pay Continues Rapid Ascent
Posted by Chris Edwards

The Bureau of Economic Analysis has released its annual data on compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D here). The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.

The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.

Figure 1 looks at average wages. In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $50,028 for the nation’s 108 million private sector workers (measured in full-time equivalents). The figure shows that the federal pay advantage (the gap between the lines) is steadily increasing.
IMAGE Figure 2 shows that the federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909.
IMAGE What is going on here?
Good question...

There are a couple of follow-ups on this - responses to some rather heated questions and comments by federal workers (surprise!) were provided here and more employment categories were charted here.

I just can't get over the fact that millions of federal employees get $31,000 more per year in benefits than the private sector.

Note: According to Labor Department data, total government employment stands at 22.3 million which includes 14.4 million at the local level, 5.2 million working at state governments, and 2.8 million at the federal government level. Presumably, the data above refers to the 2.8 million.

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Anonymous said...

There are many factors at work here. Global wage arbitrage doesn't impact government workers. Government workers are limited by conflict of interest laws and the need to maintain security clearances an conform to drug testing. These "lifestyle restrictions" are difficult to value in an increasingly competitive and permissive society. Government employees are expected to make decisions about spending other peoples' money. They should do so with a reasonable assumption of a secure future for themselves and their family so they are not tempted to "throw themselves a forward pass" in their decisions.

Tim said...

I think the biggest factor at work here, one that I read in a comment somewhere over at the Cato blog, is that the federal government doesn't have to make a profit or balance a budget.
In fact, the more money that Washington "loses" (i.e., borrows), the more it pays its workers and the more it hires...

Ben said...


I'm as small-government as the next guy, but let's be realistic. One of the chief objections (presented by the author of the piece) to this analysis of averages at the Cato website was the following:

"Third, people argue that a better analysis would be to compare similar jobs in the private and public sectors, rather than looking at overall averages. I agree that that would be very useful. Unfortunately, the BEA data is not broken down that way. At the same time, the BEA data provides the most comprehensive accounting for the value of employee benefits of any data source. Benefits are a very important part of federal compensation, and so that’s why I look to the BEA data."

I can agree that benefits may be disproportional between federal and private employment, but enough to skew it 100%? I doubt it.

A little context is required to put this statistic in perspective. According to OMB Circular A76, the federal government is REQUIRED to contract to private companies if they are less expensive than performing the services or providing the goods in-house. The feds don't have janitors or food service people anymore - those are all Aramark employees, and don't count towards bringing the average down. I don't know of many minimum wage paying jobs with the federal government; If there are some, it is certainly disproportionate to the private sector, which has millions. That's what will skew the fed average up. That's why a job by job comparison is a much more revealing statistic. I'd wager you'd find that the feds make less than the private sector, though with the cost of health care going up, it might be loser than it was in the past.


Tim said...


Yes, I saw that objection and had the same thoughts. Then I looked at the data and saw that the average computer designer makes $8,000 less in wages and benefits than the average of the 3 million federal government workers (which includes hundreds of thousands of postal workers, if I'm not mistaken).

There's something terribly wrong with that relationship...

Anonymous said...

You can't compare public and private sector jobs, for although the job descriptions may be similar, the former always result in a net loss in economic production. Better to have termites in your house than bureaucrats at "work" (with credit to S. Clemens).

Ben said...


I see your point about the computer designer. But maybe that says more about union vs. non-union compensation than about federal vs. private sector jobs.

I did want to provide a link to the chart at BLS that shows the difference in distribution among occupational groups between federal and private sector jobs:
Occupations in the Industry

It is very much skewed towards Management, business, financial, and professional related (total of 66% for public as compared to 30% for private). Of course the chart excludes the postal service, but I think they are pretty well compensated and would fit in on the upper end of the scale (see my union comment above).

PS - This blog is a daily read for me, thanks for what you do here.


Working in the private sector, that Twain quote can apply to half of my coworkers, even in this day and age. Bureaucracies aren't just for governments anymore unfortunately (see unions, universities, my contracts dept., etc.).


Anonymous said...

No wonder taxes/deficit are so high. The private sector is being forced to support an ever more expensive public sector. This leaves very little for the private sector.

Half of all public workers should be immediately laid off, and the other half have their pay/benefits trimmed back to what private sector workers make.

Anonymous said...

Don't be fooled. There's nary a difference between Democrats and Republicans when it comes to growth of government. Both parties are completely, sadistically, out of control. There is NO spending restraint on either side of the aisle, just hot air, promises, and purple unicorns. Oh and bubbles.

Meanwhile, members of Congress enjoy "cradle to grave" SOCIALIST medical and retirement benefits that outstrip those of the old Soviet Central Committee members.
1) Make all politician's pay a percentage of the AVERAGE pay of their constituents. That would give them INCENTIVE to get jobs back from China.
2) Make all politician's retirement plans a percentage of the AVERAGE retirement plan of their constituents, that provides INCENTIVE to work for the PEOPLE.
3) Make all politicians get on SOCIAL SECURITY, like the rest of us, and dissolve their fancy, overpaid plans. All State/Federal workers also.
That will provide INCENTIVE to fix what THEY BROKE.
4) Make all politician's medical benefits a percentage of the AVERAGE benefits of their constituents, that provides INCENTIVE to work for the PEOPLE .
5) Make all politician's pensions dependent on the security of their constituent's pensions.
If the People are losing their pensions due to economic distresses then the politicians should also.

Anonymous said...

....most of the gov't workers hired in the last 20 years have been hired on political or social grounds and not on competance....most have trouble getting to work on time consistently

horace manoor said...

i have a second cousin who's lazy as sin -- he got a federal job because he ferried obama campaign workers between rallies -- republicans are just as bad

deficit spending, which crowds out the private sector, started with george w, who also first bailed out wall street -- instead of stopping the spreading federal waste, obama's accelerating it

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