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Pay Gap Puts Feds on the Defensive

Posted By Rob Bluey On August 19, 2010 @ 3:38 pm In Scribe | Comments Disabled

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 [1] 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 [2]. Berry accused Heritage of comparing “apples to oranges [3]” 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 [1] 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 [4]” just two months ago. He’s ordered a review of the 20-year-old formula [5] 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 [6]. 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 [7] 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 [8].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/08/19/pay-gap-puts-feds-on-the-defensive/

URLs in this post:

[1] government workers earn significantly more money: http://www.heritage.org/Research/Reports/2010/07/Inflated-Federal-Pay-How-Americans-Are-Overtaxed-to-Overpay-the-Civil-Service

[2] claimed federal employees earn 22 percent less: http://blogs.federaltimes.com/federal-times-blog/2010/08/13/opm-stands-by-its-22-pay-gap-assessment/

[3] apples to oranges: http://www.opm.gov/opm_federalemployeepay/

[4] have a credibility problem: http://www.federaltimes.com/article/20100617/BENEFITS01/6170302/-1/RSS

[5] review of the 20-year-old formula: http://www.federaltimes.com/article/20100818/BENEFITS01/8180301/

[6] defending OPM’s claim that private-sector employees were paid more: http://blogs.govexec.com/fedblog/2010/08/opm_says_feds_still_underpaid.php

[7] said two years ago: http://www.opm.gov/oca/payagent/2008/message.asp

[8] federal workers are overpaid: http://www.nber.org/chapters/c7910.pdf

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