Federal Workers Paid More : Who Knew?

With the incredible growth of government jobs with Obama, some reports indicated that the government grows now at nearly 100 new jobs every day. The IRS hiring 16 thousand  agents to administer ObamaCare and the EPA hiring 100's to enforce new regulations on energy and land use.

It seems hard to understand why anyone would want to give up the government job for less compensation from a private sector job. And if you are employed by the State Department, you can't be fired even if you have a hand in negligent homicide. It can't get any better. Remember Ted Kennedy?

Given the situation that now exist in the private sector, no jobs or any hope for more jobs, there won't be much movement of people leaving the government employment.

For Federal Workers, the Grass Isn't Greener in the Private Sector
January 3, 2013
Source: Jason Richwine and Andrew Biggs, "For Federal Workers, the Grass Isn't Greener in the Private Sector," Wall Street Journal, December 14, 2012.

Conventional wisdom says that public employees are often paid less than their private sector counterparts. The Federal Salary Council, for example, claimed that federal employees are paid only 65 cents for each dollar earned by workers, say Jason Richwine, a senior policy analyst at the Heritage Foundation, and Andrew Biggs, a resident scholar at American Enterprise Institute.
However, much of the data that has been collected does not control for the individual person who has moved from the public sector to the private sector. There are immeasurable characteristics of an individual that may merit more or less pay even if he or she works the same job.

According to new data from the Census Bureau's Survey of Income and Program Participation (SIPP), public workers make comparable salaries to private sector workers.

• The data analyzes salaries for the same worker, which is an important distinction between this study and other ones.
• If the Federal Salary Council's claims are accurate, if a federal worker moves to the private sector, he or she should see a 54 percent increase in salary.
• However, the average federal worker who moves to the private sector accepts a salary reduction of around 3 percent.
• Private sector workers, on the other hand, get a first year raise averaging 9 percent.

The case of school teachers, who are often branded as the least compensated for their work, shows that they make just as much if not more than comparable positions in the private sector.

• One study says that public school teachers receive 14 percent less on average than private sector workers with similar skills.
• However, according to SIPP data, people moving into the teaching profession received an average raise of around 8 percent.
• Moreover, teachers who leave to work elsewhere receive an average salary cut of 3 percent.

Some argue that the public employees who move to the private sector are among the least-skilled workers, explaining why they don't receive big pay increases. However, it implies that government workers don't leave their jobs in the first place since they have a salary comparable to their private sector counterparts.