The Corner

Are Federal Employees Overpaid?

Before this becomes a one-day story, Congress needs to take a long, hard look at federal employee compensation. Data indicate that taxpayers may be paying their public servants more than a little too much. On Friday, USA Today provided interesting data on the pay of high-level federal government employees:

  • On average, federal employees earned $71,206 per year, compared to $40,331 in the private sector.
  • From December 2007 through June 2009, average federal employee salaries increased by 6.6 percent, while average private-sector salaries increased by 3.9 percent. Federal employees at the top of the pay scale received pay increases of 8.6 percent during that period.
  • Federal employment is getting top-heavy. Federal employees making more than $100,000 increased from 14 percent to 19 percent of total government employment. In fact, the number of federal employees making more than $100,000 has more than doubled in less than two years. There are now more federal employees making more than $100,000 per year than $40,000 per year.
  • The disparities don’t end there. According to other government data, federal employees make almost double what private-sector employees make when benefits such as health care and retirement are included ($119,982 vs $59,909).

    In addition to higher pay, federal government employment is far more secure than private-sector employment. In the past ten years, private sector employment has grown by a measly 1 percent, while federal employment has grown by nearly 3 percent. Excluding the U.S. Postal Service employment, federal employment has increased by more than 15 percent.

    Defenders of excessive federal employee compensation argue that federal workers are older and have achieved higher levels of education than private-sector employees. To a certain extent this is true, but it does not justify federal employees making double in salaries and benefits compared to private sector.

    When determining appropriate levels of compensation, management must determine if the employee turnover rate is too low, too high, or just right. If turnover rate is high enough to adversely impact the entity’s performance, then employee compensation is probably too low. However, if turnover rate is too low, then employee compensation is probably too high. Also, a low turnover rate means that fewer people from outside government are contributing with new ideas and perspectives based on experience in other workplaces.

    Congress must act quickly to review and address this issue. As a member of the Oversight and Government Reform Committee and Ranking Member of the Federal Workforce Subcommittee, I have requested a hearing on this issue.

     – Jason Chaffetz is a freshman Republican congressman from Utah.

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