Correcting Myths About Federal Pay

Conservatives Compare Apples to Oranges

Lauren Smith breaks down the shoddy analysis underlying false claims about federal pay levels, which have been misrepresented by conservatives and major news outlets.

Brett Tolman, pictured here, is a federal prosecutor in Utah. Federal workers on average not only are better educated than those in the private sector, but are also more experienced and older. This helps explain the compensation gap that appears when looking at unadjusted wages. (AP/Douglas C. Pizac)
Brett Tolman, pictured here, is a federal prosecutor in Utah. Federal workers on average not only are better educated than those in the private sector, but are also more experienced and older. This helps explain the compensation gap that appears when looking at unadjusted wages. (AP/Douglas C. Pizac)

More than half of Americans mistakenly believe that federal workers are overpaid, and a third also wrongly think they are underqualified, according to a recent Washington Post poll. The truth is federal workers earn 22 percent less than their counterparts in the private sector, according to the U.S. Office of Personnel Management.

The public’s misperception of federal employees as overfed bureaucrats underscores the recent success of conservative commentators at perpetuating false stereotypes about public servants, co-opting even USA Today, America’s second-largest newspaper, which recently published a misleading analysis of public and private sector pay levels. These myths fuel antigovernment resentment and buttress right-wing talking points on this topic on the campaign trail.

One of many cases in point: House Minority Leader John Boehner (R-OH) says that taxpayers are subsidizing "fattened salaries and pensions of federal bureaucrats who are out there right now making it harder to create private sector jobs." In fact, the federal workforce today as a proportion of the total U.S. workforce is about half what it was in 1970. This downsizing has come as the government’s responsibilities have increased in size and complexity.

The facts about the federal workforce

Yes, it’s true—according to unadjusted numbers from the Bureau of Economic Analysis—that the average government total compensation was $123,049 in 2009, and that the private sector worker’s average was $61,051, as USA Today reported in August. That does not mean federal workers are paid more than their private sector counterparts. The newspaper made the elementary mistake of comparing apples to oranges. It didn’t compare similar job types, educational level, time on the job, or geographic location.

So in the newspaper’s analysis, the salary of a McDonald’s cook and that of a federal prosecutor are given equal weight in the average. USA Today did acknowledge this weakness in its August article, but attributes criticism of its approach to “public employee unions,” as if it were a political point rather than a factual one.

Federal workers on average not only are better educated than those in the private sector—in 2008, 42 percent of employees in the public sector had at least a college degree, compared with just 28 percent in the private sector—but also more experienced. This further explains the so-called compensation gap that appears when you look at unadjusted averages. More than half of federal workers are 45 or older, compared to 38 percent of private sector workers.

The libertarian CATO Institute conducted a similarly flawed study in August. It used Bureau of Economic Analysis data to track average changes in pay over time, finding that federal pay is rising faster than are private sector salaries. According to John Berry, the government’s personnel chief, not only does the CATO report also compare apples to oranges, but it masks the changing nature of the federal workforce. “Thirty years ago over 22 percent of [the federal] workforce was in blue collar jobs,” Berry said in an August 16 statement. “Now that percentage has dropped by half while the percentage of IT and Health professionals has doubled.”

As the federal workforce becomes better educated and more skilled than the private sector, it’s natural that average wages would go up. Moreover, these higher-skilled federal workers are underpaid relative to their private sector peers. When properly compared, accountants and auditors in the federal sector earn $74,871 while their private sector counterpart earns $100,152. And a federal engineer makes $90,180, while a private sector engineer working at the same level takes home $111,794.

It’s also important to note that low-skill jobs make up a much smaller percentage of the federal workforce than in the private sector. Retail salespersons, cashiers, and foodservice workers were the three largest occupations in the private sector in May 2009, making up over 9 percent of the private workforce. Those three occupations combined account for less than 1 percent of federal workers.

Aside from the U.S. Postal Service, the largest occupation categories in the federal workforce include people who oversee compliance of health and safety regulations, computer specialists who work on complex software systems, and nurses, all of whom require advanced training and specialized expertise.

Berry has repeatedly pushed back against the myopic conservative attack, warning of the danger of fueling mistrust of federal workers. “If the American public knew the data that was the basis for these outrageous claims, they’d see how ideologically biased it is,” Berry told The Washington Post. With four out of five hires under Obama going to defense and homeland security jobs and the Department of Veterans Affairs, Berry was right to ask: “Which one of those people would you like to fire?”

In contrast to Berry’s sober-minded analysis, Tad DeHaven, the budget analyst who wrote many of CATO’s reports on federal versus private pay, recently told Federal News Radio that “the numbers are a secondary issue.” His analysis is driven by a foundational assumption that federal workers necessarily earn their benefits and compensation at the expense of the private sector.

In fact, kicking people off the federal payroll when jobs are scarce only increases the taxpayer’s burden, as separated workers file for unemployment and other benefits. And many federal workers, such as the thousands who approve patents for new products and drugs for medical breakthroughs, help stimulate the economy through their work.

To be sure, at a time of budget constraints the American public and policymakers should welcome a serious discussion about the federal workforce, including potential reforms. But good benefits and better job security in the federal workforce are valuable components of compensation packages and should be duly considered when comparing the relative rewards of public versus private employment.

President Barack Obama indicated that his administration will soon take up the topic. The president said he may consider leaving unfilled federal jobs open, and did not rule out unpaid furloughs, acknowledging that as the private sector struggles, “government should have to tighten its belt as well.”

Whatever the outcome, the debate should be grounded by a responsible and accurate statistical analysis, not one designed to score cheap political points.

Lauren Smith is a research assistant with the Doing What Works team at the Center for American Progress. Please go to the Doing What Works page on our website to learn more about this project.

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