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Monday, September 7, 2009

Federal vs Private Wages

I borrowed this image from Instapudnit, who got it from Cluster Stock.

Before we go to far, I need, in the interest of full disclosure, to mention that my Father was a Civil Servant.  My next youngest Brother made it to SES in the Civil Service, before the urge not to move out of California caused him to resign and go to LockMart.  My youngest Brother is still a Civil Servant.  That is the sum of my Brothers and I talked them both into joining the Civil Service.  My Daughter and two Son's are Godless Contractors, working for the Federal Government.  So, I am not down on the Civil Service.  I have a lot of admiration for those who are members of the Civil Service.

However, it does seem that the disparity between what Federal workers get and what people in Private industry earn is strangely large.

Here is some background data and a little bit of a discussion from the CATO Institute.

On this labor day it is well worth asking if that is the kind of disparity we believe we should have?  Remember, Labor day was created to celebrate the value of private labor to the US economy and the growth of the nation.

What do you think?

Regards  —  Cliff


JoeS said...

Since a higher percentage of the federal workforce is in the "management" category, it is not surprising that the salaries are higher than the private sector. However, the 53.7% increase that federal employees enjoyed in the past 8 years compared to the 28.5% raise in private industry should be cause for deeper consideration.

C R Krieger said...

Joe S makes a good point about the percentage of "management" positions in federal service.  That said, it is still an interesting comparison.

And, the increase in the last eight years is troublesome.  I suspect that what was driving the increase in Civil Service wages was the increase in military pay to keep the all volunteer military going.

Rand Corporation wrote about this a few years back and included this quote:

Public Law 90-207 (1967) required that the “comparable increase” between civilian and military pay raises be determined by equating the RMC increase (apart from the tax advantage) to the federal civil service General Schedule (GS) increase.2 At the same time, the Federal Salary Act of 1967 required increases in GS salaries to close the gap between federal civilian and private sector pays. This act, together with PL 90-207, resulted in a military-civilian pay adjustment linkage.

I wonder what our Delegation thinks about this?

Thanks Joe.

Regards  —  Cliff