Overpaid Federal Workers?

  • Megan McArdle and Arnold Kling had posts on government pay. Essentially they both used a new survey which indicates that individuals moving from the public to private sectors make less money while those going the other way make out better.

According to the SIPP data, the average federal worker shifting to a private job actually accepts a small salary reduction of around 3 percent. Similarly, private sector workers who move to federal jobs don’t take a pay cut. They get a first-year raise averaging 9 percent, well above the raise other workers get when they switch jobs within the private sector.

. . . Nationwide, non-teachers who move into teaching receive an average raise of around 8 percent, according to SIPP data, while teachers who leave the profession take an average salary cut of around 3 percent. Similarly, three recent state-level studies (in Florida, Missouri and Georgia) using administrative records found no average wage increase for ex-teachers.

I don’t think either McArdle or Kling were that taken by the data and frankly I found it rather flimsy as well. Maybe I’m just tired of the whole debate about whether public workers are overpaid. They are or they aren’t but either way the status quo is going to persevere.

Nevertheless, their posts did elicit some interesting thoughts from Foseti:

There are two defining characteristics of federal government pay: 1) the pay structure is very flat compared to the private sector and 2) lots of the compensation is deferred or tied up in benefits.

Talking about the pay of the “average” government worker doesn’t mean anything. When Tim Geithner gets a new job after leaving Treasury, he’ll undoubtedly make a lot more money. On the other hand, the federal government is filled with secretaries that make 10 times more than they could make in the private sector.

His conclusion is probably as close to the truth as one is likely to find.

My guess is that about 2/3 of government employees would make much, much less in the private sector (frankly, even in government, their jobs could be eliminated without much – if any – loss), while the other 1/3 could more – in some cases a lot more.

Foseti’s post is an interesting insider’s take but I think I’ll make a New Year resolution not to write about this anymore. It really is a dead end sort of conversation.

N.B. Foseti is an anonymous blogger. He works for the federal government or at least he says he does. He is decidedly not politically correct so if you find yourself offended do not blame me, you were warned.
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