Federal employee pay
“Today’s News Briefs and Commentaries
Thursday, July 08, 2010
Federal Government Overpaid $47 Billion a Year
Posted by: Townhall.com Staff”
“Guest post from the Heritage Foundation
Today, the White House is launching its second annual SAVE Award, which encourages federal employees to submit ideas on how to save taxpayer dollars. Federal employees will be able to rank the submissions submitted by colleagues, and then the general public will be able to vote on the top submissions later this year. Last year’s contest generated more than 38,000 submissions from government employees and more than 84,000 votes. Last year’s winner? A Department of Veterans Affairs employee from Colorado who suggested that VA medical centers should permit patients to take home extra bandages and medication when they are discharged. Estimated savings: $14.5 million by 2014. Not bad. But we have a better idea. How about paying federal employees what they would be worth in the private sector? Potential savings: $47 billion a year.
In March, USA Today reported that Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations that exist both in government and the private sector. Instead of taking the news as an opportunity to save taxpayers money, the Obama administration pushed back against the news and dispatched Office of Management and Budget Director Peter Orszag to defend government employee pay. Orszag told reporters: ‘I think the key thing to remember about that is the federal workforce is more highly educated than the private workforce. … Basically the entire delta between private sector and public sector federal government average pay can be explained by education and experience.’ The problem is, this is just not true.
Heritage Foundation senior labor policy analyst James Sherk has just released a paper analyzing data from the Bureau of Labor Statistics’ Current Population Survey (CPS) for 2006 through 2009. The data show that even after controlling for education and experience, federal employees get paid 22% more per hour on average than private-sector workers. And that does not include the significant non-cash benefits government workers receive. Federal employees not only can enroll in a Thrift Savings Plan that works like a 401(k), but they also get a ‘defined contribution’ plan, which lets a worker with 30 years of experience retire at 56 with full benefits. And don’t forget the Federal Employees Health Benefits Program, paid leave, group life insurance and on-site child care. To be sure, many private employers offer similar benefits but not all of these at the same time. All told, while the average private-sector employee gets $9,882 in annual benefits, federal government employees get $32,115 on average. Adding cash and non-cash compensation together, federal employees earn approximately 30 to 40 percent more in total compensation than comparable private-sector workers.
And the gravy train doesn’t end there. How much would near-absolute job security be worth to you? While their private sector counterparts have seen the unemployment rate rise from 4.2% to a high of 10.6%, the percentage of federal employees who lost jobs barely budged, going from 2.0% to 2.9%. And if ‘serving’ in the public sector is such a ‘sacrifice’ then why do federal employees voluntarily leave their jobs at roughly a third the rate that private sector employees do?
Why does this pay gap exist? In the private sector, productivity determines workers’ pay. Firms that overpay their employees are driven out of business by competitors that more accurately price their employees’ economic contribution. But the government is a monopoly. It has no competitors to act as a check on employee compensation. If the federal government paid market rates for their employees’ skill, education and experience, it would save taxpayers $47 billion in 2011 alone.
Not all federal employees are overpaid. The most skilled and hardest working are probably underpaid. The problem is that our government operates under a wage-fixing pay scale set by Congress. This seniority-based system divorces federal pay from individual performance. Abolishing the General Schedule system and implementing performance-based pay would go a long way toward getting taxpayers a fair deal. Reducing federal benefits and making it easier to dismiss unproductive employees would also help.”
The basic problem here is that the federal government DOES NOT operate under basic supply and demand principles. When I resigned from my last teaching assignment, I took one of the federal government’s tests to become a civil servant. It was one of the most difficult tests I’ve taken. However, I did well on it and I was eventually offered a job that was either at the GS 11 or 13 level (I don’t remember which anymore) which was unusual at the time. Unfortunately, by the time I was offered the job, I had already moved to Tucson, Arizona and I turned it down because it meant moving to California. I was offered a couple others but they were all in California. I didn’t want to leave Arizona for California.
As stated above, once in a position, all your movement is basically upward. As a tax consultant, I have dealt with very knowledgeable federal employees and I have dealt with employees who did not have a clue of what was going on—basically all they did was read from the tax manual and hoped that they were reading from the correct section dealing with very complex and sometime contradictory tax law. Once hired, once completing the probationary period, they were employed for basically as long as they wanted to stay. Yes, there are ways to get people out, but it is based upon record keeping of misconduct, and viewed as a long drawn out process. Many managers aren’t willing to take the time and effort. (The same tends to be true in the government education establishment too. I hope to post about an exception to this in the near future.)
On my post of September 14, 2009 entitled “Give us more Money,” I wrote that the State of Illinois was the largest employer in Illinois. And that the federal government was the second largest employer in Illinois. And that is part of this huge problem. Government, both at the State and federal level, keeps expanding and keeps hiring more and more employees who then have a vested interest in additional government expansion.
We the people MUST put an end to this or the government will one day CONTROL all aspects of our lives. This election is the time to reverse the process. It is time to REPLACE , REPEAL , and RESTORE!
REPLACE—liberal, “progressive” officials, elected and otherwise
REPEAL—laws and Supreme Court decisions that are contrary to the United States Constitution and limited government
RESTORE—Constitutional government and limited government
“Today’s News Briefs and Commentaries
Thursday, July 08, 2010
Federal Government Overpaid $47 Billion a Year
Posted by: Townhall.com Staff”
“Guest post from the Heritage Foundation
Today, the White House is launching its second annual SAVE Award, which encourages federal employees to submit ideas on how to save taxpayer dollars. Federal employees will be able to rank the submissions submitted by colleagues, and then the general public will be able to vote on the top submissions later this year. Last year’s contest generated more than 38,000 submissions from government employees and more than 84,000 votes. Last year’s winner? A Department of Veterans Affairs employee from Colorado who suggested that VA medical centers should permit patients to take home extra bandages and medication when they are discharged. Estimated savings: $14.5 million by 2014. Not bad. But we have a better idea. How about paying federal employees what they would be worth in the private sector? Potential savings: $47 billion a year.
In March, USA Today reported that Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations that exist both in government and the private sector. Instead of taking the news as an opportunity to save taxpayers money, the Obama administration pushed back against the news and dispatched Office of Management and Budget Director Peter Orszag to defend government employee pay. Orszag told reporters: ‘I think the key thing to remember about that is the federal workforce is more highly educated than the private workforce. … Basically the entire delta between private sector and public sector federal government average pay can be explained by education and experience.’ The problem is, this is just not true.
Heritage Foundation senior labor policy analyst James Sherk has just released a paper analyzing data from the Bureau of Labor Statistics’ Current Population Survey (CPS) for 2006 through 2009. The data show that even after controlling for education and experience, federal employees get paid 22% more per hour on average than private-sector workers. And that does not include the significant non-cash benefits government workers receive. Federal employees not only can enroll in a Thrift Savings Plan that works like a 401(k), but they also get a ‘defined contribution’ plan, which lets a worker with 30 years of experience retire at 56 with full benefits. And don’t forget the Federal Employees Health Benefits Program, paid leave, group life insurance and on-site child care. To be sure, many private employers offer similar benefits but not all of these at the same time. All told, while the average private-sector employee gets $9,882 in annual benefits, federal government employees get $32,115 on average. Adding cash and non-cash compensation together, federal employees earn approximately 30 to 40 percent more in total compensation than comparable private-sector workers.
And the gravy train doesn’t end there. How much would near-absolute job security be worth to you? While their private sector counterparts have seen the unemployment rate rise from 4.2% to a high of 10.6%, the percentage of federal employees who lost jobs barely budged, going from 2.0% to 2.9%. And if ‘serving’ in the public sector is such a ‘sacrifice’ then why do federal employees voluntarily leave their jobs at roughly a third the rate that private sector employees do?
Why does this pay gap exist? In the private sector, productivity determines workers’ pay. Firms that overpay their employees are driven out of business by competitors that more accurately price their employees’ economic contribution. But the government is a monopoly. It has no competitors to act as a check on employee compensation. If the federal government paid market rates for their employees’ skill, education and experience, it would save taxpayers $47 billion in 2011 alone.
Not all federal employees are overpaid. The most skilled and hardest working are probably underpaid. The problem is that our government operates under a wage-fixing pay scale set by Congress. This seniority-based system divorces federal pay from individual performance. Abolishing the General Schedule system and implementing performance-based pay would go a long way toward getting taxpayers a fair deal. Reducing federal benefits and making it easier to dismiss unproductive employees would also help.”
The basic problem here is that the federal government DOES NOT operate under basic supply and demand principles. When I resigned from my last teaching assignment, I took one of the federal government’s tests to become a civil servant. It was one of the most difficult tests I’ve taken. However, I did well on it and I was eventually offered a job that was either at the GS 11 or 13 level (I don’t remember which anymore) which was unusual at the time. Unfortunately, by the time I was offered the job, I had already moved to Tucson, Arizona and I turned it down because it meant moving to California. I was offered a couple others but they were all in California. I didn’t want to leave Arizona for California.
As stated above, once in a position, all your movement is basically upward. As a tax consultant, I have dealt with very knowledgeable federal employees and I have dealt with employees who did not have a clue of what was going on—basically all they did was read from the tax manual and hoped that they were reading from the correct section dealing with very complex and sometime contradictory tax law. Once hired, once completing the probationary period, they were employed for basically as long as they wanted to stay. Yes, there are ways to get people out, but it is based upon record keeping of misconduct, and viewed as a long drawn out process. Many managers aren’t willing to take the time and effort. (The same tends to be true in the government education establishment too. I hope to post about an exception to this in the near future.)
On my post of September 14, 2009 entitled “Give us more Money,” I wrote that the State of Illinois was the largest employer in Illinois. And that the federal government was the second largest employer in Illinois. And that is part of this huge problem. Government, both at the State and federal level, keeps expanding and keeps hiring more and more employees who then have a vested interest in additional government expansion.
We the people MUST put an end to this or the government will one day CONTROL all aspects of our lives. This election is the time to reverse the process. It is time to REPLACE , REPEAL , and RESTORE!
REPLACE—liberal, “progressive” officials, elected and otherwise
REPEAL—laws and Supreme Court decisions that are contrary to the United States Constitution and limited government
RESTORE—Constitutional government and limited government
posted by Christian Gunslinger at 2:44 PM
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