A recent report by the Cato Institute claims that federal employees make 26% more than private sector employees, and calls for a freeze or cut in federal wages. Some have seized on this issue, seeking an immediate federal pay freeze. Fortunately, recent efforts to freeze federal pay were defeated.

During a severe economic downturn with concomitant high rates of unemployment, it probably should come as no surprise that there will be those who will seek to scapegoat federal employees. However, the factual assertions used to support a federal pay freeze or cut do not withstand close scrutiny, but instead rely upon fast and loose comparisons of apples to oranges. Consider the facts.

FACT: According to the Bureau of Labor Statistics, federal employees are paid an average of 22% less than non-federal workers, when comparing similar jobs in both the public and private sectors and taking into account the locations where that work is performed.

FACT:  Most of the federal workforce is white collar, which is not true of the private sector workforce. The latter includes large numbers of minimum wage workers, and the federal workforce does not. As pointed out in a recent USA Today article, the private sector typically pays more on average than the public sector in high-skill occupations, such as lawyers, financial analysts and economists. Furthermore, pay comparisons typically completely ignore the impact of large bonus payments for these types of positions in the private sector. In addition, pay comparisons often fail to take into account the large number of lower level administrative and support jobs in the federal government that have been farmed out to contractors and thus are no longer counted.

FACT: Federal employees have higher average educational attainments than their private sector counterparts. More than half of all federal employees have at least a college degree, compared to 35% in the private sector. And approximately 20% of federal employees have a master’s degree, professional degree or doctorate, compared with only 13% of private sector workers. Better credentialed workers typically command higher salaries.

FACT:  Federal employees are, on average, older than their private sector counterparts, and thus receive higher rates of compensation.

FACT:  Federal employee pay is not the problem. The national budget deficit last year exceeded $1 trillion. A pay freeze of the entire federal workforce would have saved less than one third of 1% of that amount.

The federal government right now needs to replace large numbers of retiring employees. Freezing and/or cutting federal pay would undermine the government’s effort to recruit and retain the best qualified workforce, at a time when we need the most qualified employees we can find. These employees perform essential functions. Indeed, approximately 80% of recent federal hiring has been in State, DOJ, Homeland Security, Defense and Veterans Affairs. America should not be penny wise and pound foolish. The attacks on federal employee pay should stop.

by Chapter 293 President Greg Gilman