Cut Federal Pay and Benefits

Filed in Accounting, Business, Politics, Tax, Savings by on March 22, 2011

We must now cut federal pay and benefits. They are now 30 percent to 40 percent more than in identical private sector jobs. This is not justified by higher skills, especially since the federal government can rarely fire workers for poor performance. Cutting federal pay and benefits to market rates will save about $47 billion in 2011.

There are many reports that average federal pay and benefits the higher than average private-sector payments.[1] You cannot justify higher pay and benefits based on the federal government employing more skilled workers.

  • Federal pay gives the average employee hourly earnings 22 percent above the average private worker pay for the same skills and characteristics.
  • Average private-sector employees get $9,882 in annual benefits. Federal benefits average $32,115 per employee.
  • Overall, federal pay and benefits are around 30 percent to 40 percent more than comparable private workers.
  • Federal employees have job security. Since the recession, federal employment rose 240,000 (12 percent). The unemployment rate for federal employees rose from 2.0 percent to 2.9 percent.
  • Federal employees show they get better pay and benefits by quitting jobs at one-third of the rate of the private employees.
  • The number of federal emplyees getting more than $100,000 in salary increased about 40% in recent years.
  • These differences are damaging competing state and private employers. 

These averages mask large differences in pay across occupations and skill levels. Many federal employees in highly skilled occupations receive market wages. However, semi-skilled federal workers earn substantially more than in the private sector. Congress should not cut federal pay across the board. This would unfairly penalize the federal workers who earn market wages.


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