FactCheck.org Examines 'Are Federal Workers Overpaid?'

Both sides in great pay debate are misleading the public.

Summary

President Barack Obama's recent announcement to freeze the pay of federal civilian workers did little to ice the debate over whether federal workers are overpaid or underpaid. Republican leaders and conservative think tanks claim federal workers are overpaid. They say the average federal worker is paid twice as much as those in the private sector. The federal Office of Personnel Management and unions that represent federal workers say on average they are paid 24 percent less than those in the private sector.

Both sides are armed with official government statistics, but neither side is right.

Senator-elect Rand Paul of Kentucky, for example, said recently: "The average federal employee makes $120,000 a year. The average private employee makes $60,000 a year." This has become a GOP talking point and the basis for the House Republicans' call for a hiring freeze in the "Pledge to America." But it's misleading.

The analysis is based on data from the Bureau of Economic Analysis and crudely done by dividing total compensation (salary and benefits) by the number of current federal civilian employees. Comparing such averages is quite misleading, for two reasons:

* First, BEA says the figure is inflated by including compensation that is actually paid to benefit retirees, not just for current workers. The figure is at least several thousand dollars too high, by our calculations.
* Second, the average federal civilian worker is better educated, more experienced and more likely to have management or professional responsibilities than the average private worker.

Officially, the Office of Personnel Management says federal civilian workers on average are paid 24 percent less than private workers — a figure based on surveys conducted by the Bureau of Labor Statistics and often cited by unions and their Democratic allies. But this is misleading, too. The BLS surveys don’t include the cost of benefits — which both sides agree are more generous for federal workers. Experts also say there are other flaws in OPM's methodology that prevent a true apples-to-apples comparison.

The last time the federal government undertook an in-depth analysis to compare federal and private-sector pay was in 1990. Howard Risher, the managing consultant on that 1990 report, says the data doesn't exist today to support either side in the great pay debate. Risher recently wrote in Government Executive magazine that "we truly don’t know" which side is right because "neither has detailed job-to-job comparisons to support their arguments."

Note: This is a summary only. The full article with analysis, images and citations may be viewed at FactCheck.org.

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