Friday, August 13, 2010

Wider government, private pay gap explodes old myth


Perhaps the argument that local, state and federal governments needed to pay premium salaries to prevent workers from returning to higher salaries in the private sector was true several generations ago.

That now is likely a myth.

On average, federal government salaries and benefits are now nearly double those of private-sector workers.

The disparity certainly disposes of fears that government employees will flee to non-government private jobs, especially when joblessness is high and government jobs are even more secure and well-paying.

With government spending at all levels under attack, now as never before is the time for a thorough national study of government versus private job compensation. To guarantee credibility, a nonpartisan board with the believability of the base-closing and 9/11 commissions should be appointed to conduct the expert study of non-military pay and benefit scales.

Some data already are available from the Bureau of Economic Analysis:

( The federal government pays on average 20 percent more than private firms. Federal salaries have increased 33 percent faster than inflation since 2000. Total compensation for federal workers—salaries and benefits—have grown 36.9 percent since 2000 compared to 8.8 percent for private employees.

( Average pay and benefits for 2 million federal workers in 2009 was $123,049 ($81,258 in pay, $41,791 in perks) and $69,913 for state and local government workers ($53,056 in pay, $16,857 in benefits), while private-sector employee compensation averaged $61,051 ($50,462 in pay, $10,589 in benefits).

Until the current economic slowdown, government workers at all levels had another benefit that private workers did not—security from layoffs and furloughs.

The raw numbers indicate not only a gap between government and private firm compensations, but also a rate of compensation growth in government that is neither defensible nor justified.

Reasonable critics of government spending will acknowledge the need for fair and adequate compensation for employees that bring skill and devotion to their jobs in behalf of the public.

However, there's also a place for equivalence and equity in compensation. The system is out of whack where tax funds from private-sector workers are used to pay higher salaries for government workers in similar jobs.

The Pentagon is making a serious, productive study of compensation easier. In announcing a $100 billion slimming down cost-cutting drive for the next five years, Defense Secretary Robert Gates is testing all lawmakers about whether they're serious about reducing Washington spending.




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