Krugman Misleads on Federal Pay
4th September 2018
n criticizing President Trump’s decision to withhold a cost-of-living increase for federal workers, Paul Krugman writes:
Federal workers with low levels of education are paid more than their counterparts in the private sector — but do you really want our government to emulate the always-low-wages policies of, say, fast food chains? More educated workers, on the other hand, are paid substantially less than private-sector equivalents, and CBO finds that overall the federal government pays only about 3 percent more than it would if it matched private pay schedules.
Four Pinocchios! An economist with less of a political axe to grind would have specified that federal wages are 3 percent higher, but that wages are only part of compensation. The same CBO report found that federal benefits are 47 percent higher than private-sector levels. Combine wages and benefits, and the average federal employee enjoys a 17 percent compensation premium. Furthermore, “more educated” federal employees are paid less only when we are talking about people with professional degrees and doctorates. Federal employees with bachelors’ and masters’ degrees still receive a premium.
Government employees are inevitably going to get better wages than they can get in the private sector because current political realities mean that they are increasingly drawn from Fashionable Victim Groups rather than on the basis of actual qualifications. (Ask grandad where the phrase ‘good enough for government work’ came from).