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The Case for Federal Employee Compensation Reform


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Ed Feulner
The Case for Federal Employee Compensation Reform

Growing up in Chicago, it seemed everyone knew the route to a safe, secure future: Get a government job. Such jobs offered lower pay but greater security; once on the payroll it was virtually impossible to get fired from a government job.

Well, that last part remains true -- red tape still makes it extremely difficult to get rid of a federal “civil servant,” even if that employee is no longer serving the public well (or at all). But in recent decades, the other half of the equation has changed. Now, federal employees make more -- much more -- than their private sector counterparts.

A recent survey by economists at The Heritage Foundation found that “the average federal employee earns $28.64 an hour compared to $18.27 an hour in the private sector.” That’s more than half-again as much.

Of course, it’s not always easy to compare federal jobs with private sector jobs. There are many federal jobs that don’t exist in the “real world,” (and many that probably shouldn’t exist at all). Still, the Heritage analysis uses two different methods to control for the differences, and finds that federal employees are comparatively overpaid.

And it’s not simply better pay. Federal workers also enjoy better benefits.

These include excellent coverage through the Federal Employees Health Benefit Program, which contributes 33 percent more toward health care costs than private-sector programs do. Federal workers also enjoy a defined-benefit pension program, something that’s almost unheard of these days in the private sector. Plus, federal employees can retire at age 56, take another job and still collect their full pension.

There’s one more benefit it’s impossible to put a price tag on: job security. “Civil service rules make it difficult to fire federal employees for bad performance once they pass their probationary period,” writes labor expert James Sherk. Probation usually lasts just a single year. Once hired, feds “keep their jobs unless their supervisor works through an arduous process of exhaustively documenting their performance and working through a complex appeal process,” Sherk notes.

And in these recessionary times, Uncle Sam’s about the only one doing much hiring. The federal government has added almost 200,000 jobs since the recession started, while private employers have pared some 8 million net jobs. Federal employees seem to have been protected from the recession.snip
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