Federal Daily News

CBO says federal-private pay differences vary according to educational level


A new report is further firing up the ongoing debate over how federal employee compensation compares with that of private-sector workers.

One of the main points emphasized by the Congressional Budget Office report released this week is that differences in compensation between the two sectors vary widely depending on educational level.

According to the report—which compared wages, benefits and total compensation in the two sectors between 2005 and 2010—federal employment appeared to be the better deal for workers with no more than a high school education. The report said that civilian feds in that educational category earned an average of about 21 percent more than similar private-sector workers.

CBO found that federal and private-sector workers whose highest level of education was a bachelor’s degree earned about the same hourly wages on average. But feds with professional degrees or doctorates earned on average about a quarter less—23 percent less—than their private-sector counterparts.

The pool of federal workers tends to skew toward the latter two categories—taken as a whole, federal employees tend to be older, more educated and more concentrated in professional occupations than workers in the private sector, the report said.

“Overall, the federal government paid 2 percent more in total wages than it would have if average wages had been comparable with those in the private sector, after accounting for certain observable characteristics of workers,” the report said. Those “observable characteristics included educational level, years of work experience, occupation, employer size, geographic location, and demographic characteristics such as age, sex and gender.

The difference in benefits followed a similar pattern, although the report said that measuring those benefits was “more uncertain.”

According to the report, feds with no more than a high school diploma received benefits that were 72 percent higher than those of private-sector workers. Feds in the second group—those with no more than a bachelor’s degree—earned benefits that were 46 percent higher than for similar private-sector workers. And benefits were worth roughly the same for workers with professional degrees or doctorates in both the federal and private sectors, the report said.

In reacting to the CBO report, National Treasury Employees Union President Colleen Kelley agreed that highly-educated feds earn less than their private-sector counterparts, but largely rejected most of the other findings.

“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,” Kelley said in a press statement. “BLS data have shown a consistent pay gap of 26 percent in comparable public- and private-sector jobs in favor of the private sector.”

NTEU noted that BLS uses the “more accurate” comparison of employee job duties as opposed to the employee characteristics examined by CBO.

Kelley expressed strong reservations about the use of the CBO findings to line up public- and private-sector pay. She noted that doing so would mean deep cuts to the salaries of the lowest-paid workers—which the report seems to indicate are the most “overpaid.”

“For example,” Kelley said, “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 …”



 

Reader comments

Tue, Feb 7, 2012 Fed-Up New York

At the Dept of Veteran's Affairs education and experience mean nothing. What is important here is longevity. You can be dumb as a stump but if you been here thirty years you will be selected for positions you have no business holding. That's the way it is. I have a Masters Degree and years of supervisory and administrative experience as a state employee now retired. I was hoping to bring this to the VA as a federal employee, but all the VA could give me is a WG position. I have tried for five years to advance to a beter position by applying for all vacancies that I am qualified for, and have only found myself as non-selected. It's a shame it has to be this way because the agency is suffering from profound mismanagement because of this unofficial policy.

Thu, Feb 2, 2012

Everything today is higher education. What happened to experience? I was doing a job that an educator told me I could use as my masters thesis. Because I asked for a permotion and was approved by the Nursing Board, I was "demoted" to taking blood pressures and there goes the permotion. All because I have an associates degree. I am not interested in higher education at this point in my career. I have worked for this VA for 25 years, will be 62 shortly and am ready to retire. Also for RN's there is a pay locality survey done on area hospitals and our pay is based on an average of those hospitals. RN's are the only medical professionals that do not get a "pay for performance" bonus every year. Doctors and LPN's get this bonus for doing their jobs. RN's get no bonuses at all, and we are now on a pay freeze.

Wed, Feb 1, 2012

The problem with the lower paid (less educated) federal workers is --- grade creep. There are way to many GS 7, 9 and 11 (administrative, secretary or manual labor) positions. Over the years the GS 3,4 and 5 positions have been classified higher. No need to cut salaries, reclassify the positions correctly and let the encumbents keep their salary until they leave. When is the last time you've seen a GS 1, 2, or 3??

Wed, Feb 1, 2012 Female Fed Dallas, TX

I have seen GS 14s, 13s, and 12s, who have high school educations. The majority of them can't speak, write or spell correctly. They hit the jackpot because of longevity! They won't even interview those of us with advanced degrees because we intimidate them. In the private sector, some of them would be mail clerks or manicurists. If the economy wasn't so bad I would have departed the federal workplace long ago. I have credentials, but am not valued because the higher ups don't. That is why recent college grads quit out of disgust.

Wed, Feb 1, 2012

Russell, not sure if you work for the Feds or not. But if you do, you should know that federal pay and benefits are set by Congress. Federal unions do not negotiate pay and benefits. They can make their opinion known to Congress just as anyone else can, as petitioning the government is a Constitutional right.

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