The Federal Pay Scale: Inflated Yet Compressed
25th April 2013
Bryan Caplan gives you the news.
Here’s what the CBO found:
1. After adjusting for education, occupation, work experience, and other observable characteristics, federal salaries are only 2% higher than in the private sector.
2. HOWEVER, federal workers’ fringe benefits are 46% higher than in the private sector. As a result, total compensation (salary + benefits) is 16% higher for federal workers than comparable private sector workers.
3. Overcompensation is highest for the least-educated federal workers – +36% if you’ve got a high school diploma or less. As education rises, the federal worker premium falls. Federal workers with professional or doctoral degrees actually earn 18% less than private sector counterparts.
And why would they do that? The power, my friend, the power.