Pen Waggener/Creative Commons
The Congressional Budget Office has released a new study showing that federal-government employees receive significantly higher compensation than private-sector workers with the same levels of education and experience. The CBO report confirms many of the findings of a 2011 study I wrote with Jason Richwine of the Heritage Foundation and helps rebut union claims that federal workers are underpaid.
"While I have my quibbles with some of CBO’s methods and assumptions, it’s very good work and broadly consistent with the 2011 AEI study."
CBO found that federal employees’ average salaries are about 2 percent higher than those for similar private-sector employees and their benefits exceed by 48 percent private-sector levels, putting total average federal compensation at 16 percent above private-sector levels. With federal-employee compensation totaling $200 billion per year, a 16 percent pay premium is big money — almost $390 billion over ten years.
While I have my quibbles with some of CBO’s methods and assumptions, it’s very good work and broadly consistent with the 2011 AEI study. We found a larger federal pay premium because we sought to capture a broader range of federal compensation — including the implicit value of federal workers’ near-total job security — and because we used somewhat different economic assumptions. Nevertheless, the CBO report serves as a valuable contrast to the claims coming out of the federal Office of Personnel Management, which says that federal employees are underpaid by 26 percent relative to private-sector jobs.
Andrew G. Biggs is a resident scholar at the AEI.