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  • Pay Gap Puts Feds on the Defensive

    The Obama administration has been on the defensive about exorbitant federal pay ever since a Heritage Foundation report revealed government workers earn significantly more money than their private-sector counterparts. Now the administration’s personnel office has resorted to attacking the report under the false pretense that Heritage failed to compare the correct data.

    Heritage economist James Sherk estimated that salaries and benefits — for identical jobs — are 30 percent to 40 percent higher in the federal government than in the private sector.

    In effort to refute Heritage’s study, Office of Personnel Management Director John Berry claimed federal employees earn 22 percent less. Berry accused Heritage of comparing “apples to oranges” by “look[ing] only at gross averages” when analyzing the salary data. But that’s just plain false — and an indication that Berry never read Sherk’s study or the nine appendixes that explain how Heritage used controlled data to arrive at the conclusions.

    OPM did not respond to a call or email seeking comment about Berry’s remarks.

    The questionable figure is the 22 percent cited by Berry. It comes from the government’s own “pay gap” estimates, which even Berry admitted “have a credibility problem” just two months ago. He’s ordered a review of the 20-year-old formula by OPM, the Office of Management and Budget, and the Labor Department. The review is slated to begin in September.

    In the meantime, it appears Berry is using the government’s figure simply for purpose of political expediency. It should also come as no surprise that one of the pay gap’s biggest defenders, Sheldon Friedman, is a former union operative now serving as chairman of OPM’s Federal Prevailing Rate Advisory Committee.

    Friedman held a press briefing last week defending OPM’s claim that private-sector employees were paid more. He said the government doesn’t “know of anything better” than the current pay gap formula. Friedman is a former research coordinator for the AFL-CIO’s Voice of Work Campaign and a past president of the Labor and Employment Relations Association.

    This isn’t the first time OPM’s pay gap methodology has sparked debate. The agency said two years ago there were flaws in pay-gap studies, before the issue became a political hot potato. And it is the same conclusion that Alan Krueger, the man who is now Obama’s chief economist at the Treasury Department, came to in his own analysis: federal workers are overpaid.

    Posted in Scribe [slideshow_deploy]

    16 Responses to Pay Gap Puts Feds on the Defensive

    1. Bobbie says:

      It's not just the federal level! Thank you Mr. Krueger, for your honest analysis.

      How will this enormous problem be fixed?

    2. Stuart Kline, Thousa says:

      Thoughts on Fanatical Islam, the Religion of Peace, Peaceniks, and the True Immorality of Pacifism at the Challenge to Courage

      Never trust Pacifists – they will betray you every time. Take for instance the French. They thought it best not to defend their country in 1940. Surrender to Germany was more peaceful. So when the Nazis said “Give us your Jews,” most thought it best to go along, because peaceful compliance would cause less hassle, and after all, there were just a few Jews, not a large portion of the French population. But the Poles complied enthusiastically, for there were many more Jews in Poland; and they saw the benefits of confiscating their property peacefully, since they merely had to walk into empty homes to grab what they could carry. In contrast the Italians protected the Jews, not for pacifism’s sake, but as a moral imperative. They were not sent to death camps from Italy. Even as Fascists allied with Germany, and as evil as they were, they did not follow the Grand Mufti of Jerusalem’s recommendation to Hitler, that Jews should be destroyed for the greater good of a peaceful new world order. And recently, from a minaret a Muezzin of the Religion of Peace summoned the faithful to prayer, and a loving mother strapped explosives around her eldest daughter who found no peace at a crowded restaurant in Tel Aviv.

      Are these the facts? Undoubtedly, but they mostly occur in obscure history’s dull background, not close in the crisp brightness of daily life, and thus seem less than real. Don’t think the flickering distraction of work, home, friends and family, your personal desire for peace, goodwill and enlightenment will tame the larger world rife with dreadful enmity. The best course for a righteous life is to courageously defend individual liberty, while striving for a moral civil society under the Rule of Law. Unlike rocks and trees, we are shown what is good and that the Lord requires “…but to do justly, and to love mercy, and to walk humbly with thy God,” for He gave Cain the choice for good or evil. Sorrowfully, we have been driven from Eden.

    3. Hugh Taylor says:

      Maybe Mr, Berry was better suited to function in his previous position which was director of the Washington National Zoo. He certainly doesn't know what he is talking about in his appointed position at OPM.

    4. John Pummell, Alexan says:

      I find myself agreeing with Heritage–facts are stubborn things–and I work for the federal government. I love my job and my benefits, but I must admit we are a bit spoiled. Not only to we get a good salary, but we also receive locality pay (a hefty sum) and a mass transit benefit which pays for our commute. Most private firms cannot afford to pay these extras. So when OPM defends its workforce, no one should be surprised.

    5. Dennis Georgia says:

      This pay gap is the result of vote buying by politicans and the UNIONS, that obama owes all to. I work for a local government, worked for the state for 30 years, my pay never equaled the private sector, still does not. I DO NOT AND WILL NOT BELONG TO A UNION!

      The federal unions are a pimp on society, they demand more money and benefits and the federal gives it up. Why not, the government is not a company, we the tax payer gives the money with out any one checking on the cost. I know the worker is glad to get the money, but do they earn what they are paid?

      I have to go to the VA for helth care from an injury while in service. Some of the personal not all have an attitude about their jobs, they want do as little as possible, talk down to the patients, and still look at you with a look of dare you to say anything. I have seen some that did speak up, they paided dearly for that action. Yes they can be reported, but the UNION protects them and the patient looses in the long run.We the tax payer are the ultimate looser in thsi mess, we pay big bucks and get nothing in return for our money.

    6. Tyler Durdern says:

      Wow – shocker that a republican think tank would come to this conclusion. Once again the party of "no" to the rescue.

    7. Jeremiah says:

      Mr. Berry is engaged in revisionist hsitory. The flawed BLS pay comparability methodolgy that resulted in the spurious 22% pay gap he cites, has been in use since the early '90s, and neither the intervening Democratic nor Republican administrations has seen fit to accept it dubious outcomes. The President's Pay Agent, an entitiy made up of the Directors of OMB and OPM and the Secretary of Labor, has consistently year after year refused to accept the recommendations of the union-dominated Federal Salary Council to grant inflated high percentage pay increases to the Federal white collar workforce based on the poorly designed BLS pay data assessment process. He now is singing a different story than what he previously said reagrding the lack of credibiltiy in the current process, but that just reflects a panicky attempt on his part to find cover for his miscues on this topic.

    8. Ned Ward, Chicago says:

      I have worked most of my career in the private sector, and the past 11 in the Federal Government so I have ample experience in both. The government has worked since 1990 under a legal mandate to figure out how pay in the private sector compares with pay under the Government’s General Schedule. The best analysis of the data collected over 2 decades has shown a longstanding pay gap. This analytical process has been reviewed and fine tuned and reviewed again. But no analysis has ever shown that for comparable work that Federal workers are overpaid compared with their private sector counterparts. Recent assertions of such overpayment claims have stuck a chord in the conservative readership, but this does not mean these claims are credible research. For my own part, I am struck by the consistency of Federal pay over my tenure and prior to my arrival. Pay for my grade and step, in real terms, is virtually unchnaged in over a generation. Compensation in the Federal workplace is not running wild. To the contrary you might say it has mainly been keeping up with inflation. While the Federal Pay Comparability Act of 1990 has been a method of studiying Federal pay and implementing adjustments based on local area differences, the mandate to close any pay gap found has never been implemented for political reasons. The future of Federal pay should be shaped by the Human Resources needs of the government using all appropriate information. Compensation in any organization should not become the proverbial football, subject to the enthusiasms of players and spectators alike.

    9. George Colgrove, VA says:

      These are some ideas I have heard batted around and agree with. I think they should be considered.
      To enhance output from the federal government, it is time to weaken the federal employee body. I think we ought to impose term limits on feds. I think feds should not be allowed to work for more than 10 years in total in the federal government and an additional limit on the total number of years at all levels of public employment to 15 years. This will force the public employee to work and gain experience in the private sector at some point in their career. Young people can enter the federal workforce to gain early experience they will use in the private sector. People who gain early experience in the private sector will be better able to suit the needs at the management levels in government with efficiency and money saving skills learned from the private sector. Upper level management skilled by the private sector will properly train the entry level employees with the principals of the private sector. Though government does not make profit, skills that lead to profit is necessary to save taxpayer’s hard earned cash. Private sector experienced feds will write policies that will better enhance efficiency rather than increase complexity. Profit minded managers will look for and eliminate overlap and redundancy. Because job preservation will no longer be a goal, focus on solving problems will be introduced to the federal workforce. In the end, all feds will lose the government employee mentality and adopt the private sector mentality. Moreover, federal employees will never be in the job long enough to gain strength or complacency to abuse the trust the public puts in them as is being demonstrated now.
      As for benefits, I think the government and all corporations should get out of the benefits business. We should start a new industry of benefits brokerages. These services will be available to the worker directly where they can package together their own benefits with full competition in the open market. No longer will large companies have a corner on the entire workforce in government or a corporation. Packages can be al-le-carte providing products including healthcare, life insurance, investments like 401K and other investment vehicles. The worker then carry that package with them from job to job and can tweak them as the wish as they gain income. This makes employees mobile and can make the cost of healthcare go down with greater competition. These brokerages would have their own preferences of group insurance companies they will offer the employee. People can choose the broker that fits their personal needs. Any company or government body would then simply compete for the worker based on the amount of that package they will pay for. They will be free to pay a percentage, a set amount, or a combination of both by setting a cap amount. At that point, governments may have an easy to determine index for which they apply a maximum contribution based on the average of the private sector. This process would be fully transparent.

    10. Frank Inserra, Wobur says:

      Thank you, Mr. Ward, for your brief and appropriate summary. I'm not going to be as brief.. Mr. Colgrove, having worked 14 years in the private sector followed by 22 years in the public sector, I appreciate what the private sector has to teach. I think you would be surprised, however, at how many public sector employees have already spent a good deal of time working in the private sector.

      I have seen a great number of studies from both public sector and private sector sources, and they generally tend to obscure or ignore the impact of one or more of the following attributes of Federal employment:

      * Many Federal jobs have no private sector analog

      *The Federal workforce is heavily concentrated in expensive geographic areas with high pay scales (excluding Federal employees from the calculation)

      *The Federal workforce is now heavily concentrated in white collar and professional jobs (having been required to outsource much of its unskilled, semi-skilled, blue collar, and pink collar workforce since the 1980s)

      *Due to its lackluster pay (until recently) and the incessant degradation of Federal work by political elites, the media, and others — the Federal Government has been unable to attract and retain younger workers and maintains a graying workforce at the top of its payscale (which payscale, in most cases, is still substandard by comparison to the same private sector jobs — where they exist — in the same labor market performed with comparable skills, and, where relevant, the same experience level and education).

      *Federal benefits, while certainly competitive by private sector standards, are nowhere near what they used to be under the CSRS system, and, were it not for the offshoring, creative ues of the bankruptcy laws, and outright renunciation of contractual commitments to their employees by major corporations over the last 20 years, would be nothing remarkable

      In addition, the Federal retirement system is heavily invested in American securities markets by the choice of its participants, and those participants, like the rest of the America, had their retirement savings severely eroded by the market downturn.

      The Federal government hires veterans in heavily disprorportionate numbers.

      The Federal Government has nothing even remotely resembling a corporate "golden parachute" and its highest paid personnel would not even deserve a footnote on a corporate balance sheet..

      Federal employees, especially those in the Executive branch, live under a unique and comprehensive set of criminal conflict of interest, pay supplementation, and disclosure laws that would have most of of corporate and private America, if applied to them, screaming in agony from Jump Street.

      Federal employees pay the same taxes as private sector America, but many of them will be fired for delays and mistakes in tax payment that would result in modest monetary penalties for most Americans. Oh yes, they also have their political activity restricted (during off-duty hours).

      This preoccupation with Federal pay and benefits will end as quickly as it started (i.e. as soon as the labor market picks up). Then Federal employees can go back to being underpaid, unnoticed, and a laughing stock only suitable for stories on "The Fleecing of America." Dreck.

      Next time Big Pharma sells you a life-saving drug, please understand that it was brought to 99% maturity by Government scientists first. When you complain about illegal immigrants camping in your back yard, imagine what it would be like without Border Patrol, CBP, and ICE officers. The next kid to take a bullet in Iraq or Afghanistan is a Federal employee. When they lift the latent fingerprint off the cave in Afghanistan and it pops up positive at Kennedy in the DHS electronic fingerprint system, think of Federal employees. When the hurricane and tornado warnings come, think of the Federal employees. When the damned train runs on time, think of the National Institute of Standards and Technology. Oh, just forget it. The Heitage Foundation, right. Our heritage would have been sold off by carnival barkers years ago, without the National Archives.

    11. Greg b. Vail, AZ says:

      Wow, Ty, Not in the tank for the dems are you? I have been keeping tabs on government pay discrepancy since 1998. It has existed under both dems and the GOP. This is not a party issue, this is a government issue. No one is trying to pin the blame on any one party. Get over your prejudice and look at the facts. Even non partisan groups such as Americans against Government tax abuse agree with the discrepancies.

    12. Bob, Philadelphia PA says:

      What is the average pay for Heritage foundation employees? Perhaps they should compare Fed with their own folks. The same goes for Fox and MSNBC.

    13. George Colgrove, VA says:

      *Our heritage would have been sold off by carnival barkers years ago, without the National Archives.

      - But you know, I think it already has.

      - The bottom line is this. It is not how much or how little you are paid. It comes down to the fact you are not being paid with cash – you are being paid with debt that you and I and your lineage as much as mine will be responsible to pay back. Using thought and care, much of what the federal government does can be shifted to the states with little state government growth, or to the private sector. With bias being placed with the private sector. With all that you allude to in your defense, you should be eager for this – wanting to break down all the barriers to move your job to the private sector as fast as possible,. If your assumptions are correct; and God I hope they are; in the private sector you should be paid even more. You should meet happy customers wanting to use the services you once provided in the federal government, but now provide in Hometown America. Your pay will go up with cash supplied by willing paying customers – not disgruntled taxpayers. I desperately want this. One your tax paid position is converted to a customer paid position, the national debt burden goes down, thus increasing the ability to pay back the debt and also decreasing tax rates. Two, and more importantly to the economy, your pay should go up (at that lower tax rate) thereby providing more money to be circulated in the economy. We all win. In fact, you personally would win even more than I! If I the same thoughts as you have on your skills and specialties; If I were you, during my frequent down times at my government job, I would be writing my business plan on my new private venture that will be on the front line of taking over government responsibilities. I would be talking to the banks to get my small business load – which would no longer being administrated by feds. Those who start now, will be the founders of the new industries of government services provided by the private sector. IT WILL BE BIG!!! Rather than being scared of being without your fed job – which I do think are going away (unavoidable) – I would be excited about being on the ground floor on the new emerging industries that come out of the ashes of the federal government.

    14. Alan, Washington, DC says:

      One of the problems we will always have when studies such as these are published is the generalization of "federal employees". While some feds do have jobs that have comparable private sector jobs, such as attorneys, managers, or accountants, many do not. I am a federal agent (after spending 7 years in the private sector as an engineer. I entered into federal service with a Master's degree, but took a put cut to do so. There is no private sector comparison for my job. Nor is there one for many government jobs. Additionally, limiting my service to 10 years as suggested above would be absurd. What would I do with the skill set I have developed in the private sector? Do we really want the leaders of federal law enforcement to have less than 10 years of law enforcement experience (not counting, of course, the law enforcement experience they previously gained in the private sector, whatever that means)?

      If there are sectors of federal employment that are overpaid, are there likely are, lets talk about them. But lumping ALL government workers into one big "overpaid" category does nothing but force people to chose one extreme over another.

    15. patrick luby, baltim says:

      why can't we place mandated total , hiring freeze on new government employees, which include no replacements, and a pay freeze until the public and private sectors are inline. place this on the ballot for 2012. the hiring freeze to continue till government shrinks to the size of the 50s time period this will clear our debt rapidly .

    16. Teofil says:

      The private sector has to perform or they get a pink slip. I've observed from personal experience that government employees are there for merely a economy stimulus. No other explanation is possible. Where I live they have been referred to as "slugs" for the past 40+years. I can bear personal testimony of this not just being supposed but an accurate moniker.

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