Still Club Fed

A CBO report says that on average the compensation paid to federal workers is nearly 50% higher than in the private sector.

By STEPHEN MOORE

Federal workers on balance still receive much better benefits and pay packages than comparable private sector workers, the Congressional Budget Office reports. The report says that on average the compensation paid to federal workers is nearly 50% higher than in the private sector, though even that figure understates the premium paid to federal bureaucrats.


CBO found that federal salaries were slightly higher (2%) on average, while benefits -- including health insurance, retirement and paid vacation -- are much more generous (48% higher) than what same-skilled private sector workers get.
Federal workers with just a high school education had the biggest compensation advantage over their private-sector counterparts. Benefits were an enormous 70% higher, and their wages were 21% better. Workers with doctorates or professional degrees actually fared worse than they might have in the private sector.
The unions have cited the report as evidence that their pay advantage is exaggerated. They're wrong, mainly because the biggest benefit to being a federal worker is not calculated. Unlike in the private sector, federal employees enjoy near life-time job security. They rarely get fired under civil service rules. Especially in a turbulent economy as we face today, that job security, and the avoidance of layoffs with the trauma of loss of income, is a very valuable perk that is almost unknown in the private sector. This explains why voluntary quit rates among government workers are much lower than in the private sector. That differential is proof-positive that federal workers are overcompensated at the cost of taxpayers.
This issue will heat up in the months ahead as Republicans try to implement a federal pay freeze. But even if they're successful, the CBO report suggests that it could take years for private sector workers to match the government's Club Fed generosity.