1/31/12: NTEU National President Colleen Kelley agreed with one major conclusion of a Congressional Budget Office (CBO) report—that highly-educated federal workers earn significantly less than their private sector counterparts—but cautioned against accepting the report as a definitive statement on federal compensation.

Kelley said that “CBO is clearly the expert on Congressional budget scoring but pay comparisons are not its principal expertise; that is the expertise of the Bureau of Labor Statistics (BLS).” BLS data have shown a consistent pay gap of 26 percent in comparable public and private sector jobs in favor of the private sector.

BLS uses the more accurate comparison of actual job duties as opposed to employee characteristics, which CBO examined.

In its report, CBO does not refute the BLS and Federal Salary Council reports which show the 26 percent pay gap saying only that they “may have ended up comparing federal workers with private sector workers who have more experience,” a statement NTEU refutes.

At the same time, CBO says that other studies, including one by Andrew Biggs of the American Enterprise Institute, “overstates the differences between the cost of employing federal workers and similar private-sector workers.”

The CBO report says that highly-educated federal workers earn significantly less than their private sector counterparts and federal employees without college degrees may be paid more than their private sector counterparts. The report also found benefits for lower-paid workers to be more generous than private sector benefits for those without college degrees.

Kelley questioned the CBO’s findings regarding lower-paid federal workers, “but if that were the case, the question is whether Congress would want to cut the salaries of the lowest paid workers by the amounts this report claims they are overpaid,” President Kelley said. “For example, that would mean cutting the salary of a clerk earning $20,000 a year by 20 percent down to $16,000 while increasing the salary of a highly-paid manager making $200,000 by 20 percent to $240,000?”

Nor, Kelley said, “would or should Congress allow those among the lowest-paid federal employees go without basic benefits, such as paid sick leave and pensions, even if some of their private sector counterparts do not receive those benefits.”

She added that the basic reason there is less dispersion of wages for federal employees is that salaries and their underlying formulas are set by Congress—a body that reflects public opinion. The result, she said, is that Congress will not pay millions of dollars for work the private sector is willing to pay.

On that issue, President Kelley said: “The federal workforce is the most highly-educated and highly-specialized in our country, and a great many of the professionals—the lawyers, doctors, economists, scientists and so many others—working for the federal government could earn much more in the private sector.”

More to the point and in the best interests of the nation, the NTEU leader said, is that efforts to drive federal pay down or reduce the pensions of federal workers are misplaced. All such efforts miss the big picture—jobs and economic recovery, she said. 

“An enormous amount of time and energy is going into studies purporting to show that federal workers are overpaid,” said President Kelley. “It is just a foolish drive for the lowest common denominators, and is missing the big picture—which is what are we going to do to put people back to work and accelerate the economic recovery?”