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Are Federal Workers Underpaid?

In an analysis (Adobe required) comparing federal government compensation to that in the private-sectors published earlier this month by the Cato Institute, Chris Edwards writes, “The average federal worker earned $100,178 in wages and benefits in 2004, which compared to $51,876 for the average private sector worker, according to U.S. Bureau of Economic Analysis data. Looking just at wages, federal workers earned an average $66,558, 56 percent more than the $42,635 earned by the average private worker . . . Since 1990, average compensation has increased 115 percent in the government and 69 percent in the private sector, while average wages have increased 104 percent in the government and 65 percent in the private sector.”

The disparity between federal government and private sector pay has been in a general growth pattern since 1950. According to Edwards, the ratio of federal to private pay was 1.19 in 1950, but by 2004, the ratio has grown to 1.93. Edwards acknowledges there are multiple reasons for the increases in federal pay, but adds that workers move "into higher salary brackets regardless of performance, and by jobs that are redefined upward into higher pay ranges."

Edwards points out one indicator of the adequacy of federal pay is the "quit rate," which is 1/4 that in the private sector. "That suggests," writes Edwards, "that pay in most federal jobs is more than adequate, and workers could be attracted with reduced compensation." As an Arlington sage would say, “government by government for government paid by you know who.”