Thursday, August 27, 2009

Is it time to freeze federal wages?

According to The Cato Institute:

"Federal Pay Continues Rapid Ascent
Posted by Chris Edwards

The Bureau of Economic Analysis has released its annual data on compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D here). The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.

The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector."

The article includes several charts which dramatically highlight the difference between federal and private-sector pay, especially when benefits are included.

"In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909."

No wonder most Americans think our government is out-of-control and has no real understanding of economic realities. As Edwards notes, with pay like this, federal workers are "insulated from the economic reality of recessions and from the tough competitive climate of the private sector." Plus they have job security that most in the private sector would never dream is even possible.

With all the talk from politicians (of both parties) in Washington, does anyone find it strange that bemoaning the debt of the nation and talking about 'fiscal responsibility' never extends to doing what many state and local governments are doing - freezing wages, laying off workers and *gasp* actually cutting spending?

4 comments:

Tim Higgins said...

Maggie,

Surely you wouldn't have the federal government push to reduce hiring and layoff workers at a time when the only job growth in the United States is that of federal employees! Why the jobless rate is significantly affected by the number of new czars alone!

Kadim said...

Well part of this would likely be explained by where all these government employees live--the expensive Maryland-Northern Virginia-DC area. (I seem to recall that Maryland is now the nation's richest state by per capita income.)

That area was a bit of a backwater even 30 or 40 years ago. Then the government got big, a lot of contractors and sub-contractors followed, and DC really started to become crowded.

What that implies to me is troubling: the government has to pay federal employees well, because it's so expensive to live in DC. The growth of the population of DC, as well as the wealth of its residents, is due to the federal government, and that drives up the price of housing in DC. So the federal government has to pay its employees more to live there...lather, rinse and repeat.

Hooda Thunkit (Dave Zawodny) said...

Maggie,

I have an idea, howze about "We the Sheeple" sit on a "Feral" pay board every 4-years (an "off" year) and propose a wage scale, which is then voted on by us.

If/when 38 states vote in favor, in the same election, the new wage scale takes effect.

Maggie Thurber said...

Ah, Hooda - I like it!!!!

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