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Federal employees earn more than those with private companies

Old 08-14-10, 12:09 PM
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Federal employees earn more than those with private companies

I knew that Federal Employees earned more money, I didn't realize the gap had grown so much. Couple of thoughts off the top of my head,

-This is one reason I didn't/don't want more federal involvement and more federal employees in traditional private roles (health care for example). Their overhead will balloon.
-In recent years due to the economy many private companies have lowered or stopped raises/bonuses. And even lowered or taken away pay/benefits. Yet the Federal Government doesn't seem to be bothered by such things.
-And most importantly, my wife has been looking to go from part time to full time work. I'm having her look at government jobs!! LOL I mean, you guys don't mind paying (thru taxes) my wife more than she could earn in the private sector do you?


http://usatoday.printthis.clickabili...partnerID=1661

Federal workers earning double their private counterparts
By Dennis Cauchon, USA TODAY

At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.
Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.

"The data are not useful for a direct public-private pay comparison," says Colleen Kelley, president of the National Treasury Employees Union.

Chris Edwards, a budget analyst at the libertarian Cato Institute, thinks otherwise. "Can't we now all agree that federal workers are overpaid and do something about it?" he asks.

Last week, President Obama ordered a freeze on bonuses for 2,900 political appointees. For the rest of the 2-million-person federal workforce, Obama asked for a 1.4% across-the-board pay hike in 2011, the smallest in more than a decade. Federal workers also would qualify for seniority pay hikes.

Congressional Republicans want to cancel the across-the-board increase in 2011, which would save $2.2 billion.

"Americans are fed up with public employee pay scales far exceeding that in the private sector," says Rep. Eric Cantor, R-Va., the second-ranking Republican in the House.

Sen. Ted Kaufman, D-Del., says a pay freeze would unfairly scapegoat federal workers without addressing real budget problems.

What the data show:

•Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government's contribution to pensions. Employees contributed an additional $10,569.

•Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers
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Old 08-14-10, 12:54 PM
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Re: Federal employees earn more than those with private companies

First I've heard of this.
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Old 08-14-10, 01:51 PM
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Re: Federal employees earn more than those with private companies

How does their pay compare to private employees in the same cities?
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Old 08-14-10, 02:35 PM
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Re: Federal employees earn more than those with private companies

Or of the same level of education and experience?
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Old 08-14-10, 02:41 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by wendersfan View Post
How does their pay compare to private employees in the same cities?
That is a good question. Given how much is concentrated around here with a higher locality pay (I think DC is only behind NYC and CA in locality adjustment).....I don't know if it takes the locality adjustment into account.

But like I said in the other thread - the retirement benefit for the older fed employees is pretty damn sweet.
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Old 08-14-10, 02:43 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Decadance View Post
Or of the same level of education and experience?
Still higher.

Though I don't know why looking at specific cities should matter.


And how in the world does the fact that federal employees earn more total compensation than their private counterparts surprise anyone? It is difficult for them to be removed from their job,driving up their earnings, and they receive much better non-cash compensation, including such simple things as far more paid days off.

Note I am not commenting on if this is good or bad.
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Old 08-14-10, 02:44 PM
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Re: Federal employees earn more than those with private companies

Adding:

I don't know how those with the most advanced degrees compare.
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Old 08-14-10, 02:47 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Pharoh View Post
Still higher.

Though I don't know why looking at specific cities should matter.


And how in the world does the fact that federal employees earn more total compensation than their private counterparts surprise anyone? It is difficult for them to be removed from their job,driving up their earnings, and they receive much better non-cash compensation, including such simple things as far more paid days off.

Note I am not commenting on if this is good or bad.

I thought the old adage about working for the public vs. private sector was that you sacrifice salary as a public employee for better benefits (current and retirement, and obviously the job security is better). If public employees are now earning more in salary too, it would probably surprise a lot of people.

Last edited by Red Dog; 08-14-10 at 02:55 PM.
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Old 08-14-10, 02:48 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Pharoh View Post
Adding:

I don't know how those with the most advanced degrees compare.
The charts I've seen - the higher the degree, the better to be private. For example, I think physicians is one of the few professions where private beats federal. For those of my ilk, it's pretty close, but again the locality might make a difference.
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Old 08-14-10, 02:57 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Red Dog View Post
That is a good question. Given how much is concentrated around here with a higher locality pay (I think DC is only behind NYC and CA in locality adjustment).....I don't know if it takes the locality adjustment into account.

But like I said in the other thread - the retirement benefit for the older fed employees is pretty damn sweet.
Chicago's is also higher.

Originally Posted by Pharoh
Though I don't know why looking at specific cities should matter.


And how in the world does the fact that federal employees earn more total compensation than their private counterparts surprise anyone? It is difficult for them to be removed from their job,driving up their earnings, and they receive much better non-cash compensation, including such simple things as far more paid days off.
Because Federal workers are concentrated in DC, which has a higher cost of living (and hence, higher salaries) than most other places. I doubt that's the biggest factor, but I'm sure it skews it.

I have to disagree on the better non-cash compensation part. When I switched from private to federal employment, I got worse health benefits, half as many days off (after 15 years I'll have the same amount I used to), much worse life/disability insurance, no bonus, and a lot less schedule flexibility.

There are certainly benefits to Federal employment, such as job stability, somewhat better retirement, and fewer hours (around 45-50 versus at least 60 per week), but it isn't all unicorns and rainbows, either.

These surveys come out every year, and every year they are bullshit. Show me a comparison of salaries in the same general job classification and it will be worth discussing. But comparing a largely professional federal workforce with the population at large is just plain silly.
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Old 08-14-10, 03:06 PM
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Re: Federal employees earn more than those with private companies

While it is with no small amount of reluctance that I agree with something that a public sector union talking head says, this is exactly right:

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.
Comparing all Federal employees to all private sector workers is not an apples to apples comparison at all. There are many a Federal position for which there is no direct comparison in the private sector.

While I will be the first to agree that Federal employees are, on average, pretty substantially overpaid (thanks largely to those same public sector unions), the comparison quoted in the article above is pretty misleading.

While using numbers from 2008, here is a more equitable comparison from the same publication:

http://www.usatoday.com/news/nation/...eral-pay_N.htm

Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds. Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.
Is that disparity even larger in 2010 than it was in 2008? I would comfortably wager serious money that it is, perhaps even by another $1000 or two.

The next paragraph makes reference to the same "total compensation" issue:

These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.
I guarantee you that these two numbers came from a total average of all Federal employees versus all private sector workers, so we are into apples and oranges territory again. A benefits value comparison between your average Federal chemist or accountant would be far more equitable (although still in favor of the Fed no doubt).
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Old 08-14-10, 03:11 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by jfoobar View Post
A benefits value comparison between your average Federal chemist or accountant would be far more equitable (although still in favor of the Fed no doubt).
This is the 2008 chart I've seen and posted before. I don't know if locality is factored.



Rest here:
http://www.usatoday.com/news/nation/...ay_N.htm#chart


I was wrong - I thought physicians had a high disparity.

Last edited by Red Dog; 08-14-10 at 03:13 PM.
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Old 08-14-10, 03:30 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Duran View Post
These surveys come out every year, and every year they are bullshit. Show me a comparison of salaries in the same general job classification and it will be worth discussing. But comparing a largely professional federal workforce with the population at large is just plain silly.
There are several news reports out on this, but I posted the one I posted because it had several things in it. Not just a comparison between private and public. Perhaps the one that caught my eye the most was these:

Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers

Regardless of the comparison of private firms, total salary growing 33% faster than inflation and compensation growing almost 37% is amazing!

Seriously, if you were looking for a job and you weren't sure what industry to go in, wouldn't you go look at those industries with that had that kind of salary growth in a down economy?

And your partially right. A person in the article noted that the Feds are kicking the low paying jobs to the private sector. Funny, "we" often complain about those private companies that only pay low wages. Yet it seems the Feds "outsource" them to the private sector.

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Old 08-14-10, 04:36 PM
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Re: Federal employees earn more than those with private companies

Don't get me wrong, I am no defender of the federal bureaucrats: Pendleton's Premise was correct though, merit based civil servants do the job better than appointees.

http://sitemason.vanderbilt.edu/file...%20Promise.pdf
(Published in the Journal of Politics 2008)
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Old 08-14-10, 04:38 PM
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Re: Federal employees earn more than those with private companies

Liberals: you think CEOs are overpaid, you become a CEO.
Conservatives: you think government workers are overpaid, you become a government worker.

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Old 08-14-10, 08:48 PM
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Re: Federal employees earn more than those with private companies

Well the obvious, that no one has mentioned, is that since the Federal Government doesn't make 800% profit like most private companies they can afford to pay their employees more rather than make all share holder billionaires.

Tho since we have a federal deficit you would think employee pay would be significantly less....
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Old 08-14-10, 10:15 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Sdallnct View Post
There are several news reports out on this, but I posted the one I posted because it had several things in it. Not just a comparison between private and public. Perhaps the one that caught my eye the most was these:

Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers

Regardless of the comparison of private firms, total salary growing 33% faster than inflation and compensation growing almost 37% is amazing!
What does that actually mean? 33% faster than inflation - if inflation is 3%, that means 4%. Is that really a huge difference? Add to it the fact that for the majority of federal workers, raises are a combination of pre-defined step increases plus cost of living.

And for "Total Compensation" - what is "Federal compensation"? Is it the aggregate amount? Per person? Is it skewed because of the locality adjustments for DC being higher than most of the country?

I'm not trying to argue that federal workers are over or underpaid with regards to the private sector. Some are underpaid, some are overpaid. But these USAToday articles are not a good critique of anything, because the issues are deeper and more complex than they appear to believe.
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Old 08-15-10, 01:07 AM
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Re: Federal employees earn more than those with private companies

Originally Posted by Duran View Post
What does that actually mean? 33% faster than inflation - if inflation is 3%, that means 4%. Is that really a huge difference? Add to it the fact that for the majority of federal workers, raises are a combination of pre-defined step increases plus cost of living.

And for "Total Compensation" - what is "Federal compensation"? Is it the aggregate amount? Per person? Is it skewed because of the locality adjustments for DC being higher than most of the country?

I'm not trying to argue that federal workers are over or underpaid with regards to the private sector. Some are underpaid, some are overpaid. But these USAToday articles are not a good critique of anything, because the issues are deeper and more complex than they appear to believe.
But wouldn't those same questions be asked of private sector increases? Wouldn't your points apply to them as well (except for the DC part)?

And I don't believe anyone has said they are over or under paid. The comparison is private sector. And the increases they are getting. Those are not the same. Could be the evil empire of big private corporation vastly underpays employees and only the government pays a fair wage.
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Old 08-15-10, 08:52 AM
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Re: Federal employees earn more than those with private companies

Originally Posted by Sdallnct View Post
But wouldn't those same questions be asked of private sector increases? Wouldn't your points apply to them as well (except for the DC part)?

And I don't believe anyone has said they are over or under paid. The comparison is private sector. And the increases they are getting. Those are not the same. Could be the evil empire of big private corporation vastly underpays employees and only the government pays a fair wage.
No, not really. Total compensation is a difficult metric to use because the Federal government might have more or less employees between the two time periods. For example, if in 2000 the federal government employs 2 engineers at $100K and a secretary at $40K, inclusive of benefits, the average total compensation is $240K/2 or $80K. By 2008, however, the secretary has retired and been replaced by a contractor (something that occurred with great frequency the past decade), and the engineers received absolutely no raise at all. Average compensation is now $200K/2 or $100K. OMGWTFBBQ! Government total compensation went up 20%! But the engineers are making the exact same amount they did in 2000.

In other words, the problem with using a average total compensation number is that a lot more goes into it than just salary increases. To paint it as such is disingenuous at best. And the clear implication of the article is that federal employees are overpaid. Which may indeed be the case, but this article doesn't shed much light on it.
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Old 08-15-10, 09:58 AM
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Re: Federal employees earn more than those with private companies

And private companies don't change their staffing models that would "change" how their total compensation looks?

Look, there are a lot of "points" that could be made on these reports. But one of the points that I'm making is people regularly question the pay of employees in the private sector. Sometimes saying they get paid to much sometimes to little. And this was also a push to get the government to take over health insurance (government will be able to charge less because of their lower overhead). Yet study after study "seems to indicate" that government employees make more than those in the private sector.

I really don't have a problem that they do. IMO, salary is/should be market driven by everyone. Certain businesses (private) pay more than other companies. And I'm sure some private companies pay better than government employees. And each employee is worth exactly what they can get paid (that goes for the minimum wage worker at the mom and pop store, to the CEO who earns 20 quadtrillion dollars, to the clergy who earn $30,000 MORE working for the Feds). And each company/government pays exactly what they need to to maintain their enterprise (private or Feds) and get/keep the best employees.

But before we start ragging on private companies and how inefficient they are, how much they over pay (or underpay) maybe lets not forget the Federal government has to do exactly the same thing.

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Old 08-15-10, 12:23 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Sdallnct View Post
And private companies don't change their staffing models that would "change" how their total compensation looks?
Not as a whole. An individual company, sure. But if there's a position that needs to be filled, when talking about private industry as a whole, it doesn't matter whether Company A or Company B has the employee.


I really don't have a problem that they do. IMO, salary is/should be market driven by everyone. Certain businesses (private) pay more than other companies. And I'm sure some private companies pay better than government employees. And each employee is worth exactly what they can get paid (that goes for the minimum wage worker at the mom and pop store, to the CEO who earns 20 quadtrillion dollars, to the clergy who earn $30,000 MORE working for the Feds). And each company/government pays exactly what they need to to maintain their enterprise (private or Feds) and get/keep the best employees.

But before we start ragging on private companies and how inefficient they are, how much they over pay (or underpay) maybe lets not forget the Federal government has to do exactly the same thing.
The issue with the Feds is that there's no profit motive. Companies can use at least two factors to determine salary - what they need to pay to attract qualified candidates (the market), and how much profit that position will contribute to the bottom line. If hiring a lawyer costs $150K, but they'll only drive/secure $50K of profit, it's probably not worth it, and other options should be explored. The government only has the first factor - how much it costs to attract qualified candidates. Since the second factor limits salaries, it wouldn't be terribly surprising to find out the government pays a bit higher. On the other hand, this "study" doesn't really shed any light on it.
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Old 08-15-10, 02:27 PM
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Re: Federal employees earn more than those with private companies

If I'm a private company, I only hire people when they make more money for me than they cost me. I don't have such silly worries when I am the government.
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Old 08-15-10, 04:17 PM
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Re: Federal employees earn more than those with private companies

I always heard it was the other way around.
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Old 08-15-10, 04:21 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by kvrdave View Post
If I'm a private company, I only hire people when they make more money for me than they cost me. I don't have such silly worries when I am the government.
Maybe if you're a rather small business, but it seems as if US Gov't wants business to depend on it exclusively, so we have more businesses getting government cash and not really caring if they make a profit or not. Most of the money has to do with being Green and getting special programs related to the environment as well as hiring particular people who fall into particular groups.
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Old 08-15-10, 04:38 PM
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Re: Federal employees earn more than those with private companies

Originally Posted by Red Dog View Post

I was wrong - I thought physicians had a high disparity.
Physician jobs in the VA system can be pretty sweet gigs. Great hours, solid benefits, good time off, and while there are performance numbers....they aren't like a public/private hospital. With the tanking economy the competition for healthcare positions in the VA has gone up a lot (minus the "Siberia" locations). Healthcare jobs in federal prisons are $$, but much higher turnover rates.
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