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  • OPM Director John Berry’s Mistaken Statements to Congress

    Even the more jaded observers of Washington politics had to be disappointed with the performance of federal pay defenders during yesterday’s House Oversight Committee hearing.

    As was written on Monday, defenders had to deal with a mountain of empirical evidence that federal workers are paid above-market compensation, and I was looking forward to a vigorous discussion of that evidence. Instead, defenders of the existing pay system avoided that discussion almost entirely.

    John Berry, director of the Office of Personnel Management, was the worst offender in this regard, going so far as to fundamentally mischaracterize our research. When pressed by Chairman Dennis Ross (R–FL) on whether he agrees with reports by The Heritage Foundation and the American Enterprise Institute that federal workers are overcompensated by 30–40 percent, Berry responded:

    Absolutely not. … Their comparisons are based on gross averages. … The federal workforce is now a very skilled, white-collar, high-sophisticated workforce. … So we need to compare the federal government with like-to-like.

    In fact, the Heritage and AEI reports do control for a whole range of worker skills and characteristics. Far from an obscure methodological issue, using control variables to make apples-to-apples comparisons was the whole point of both reports, the point that separated them from non-scholarly analyses that use raw averages. Even a cursory glance at either report would tell the reader that worker characteristics were controlled. It is disappointing that Berry could be mistaken about such a fundamental aspect of our research.

    During a break in the hearing, I told a staffer on the committee about Berry’s mistake, which led Representative Darrell Issa (R–CA) to say to Berry:

    Earlier you commented that the AEI and Heritage reports did not include an adjustment or a recognition of education, experience, and so on. In fact I reviewed them, and they do. So would you look at them again and commit for the record to give us an answer on why you think there are flaws in their process.

    Issa suggested two weeks to put together his answer, and Berry quickly agreed. So maybe the evidence-based discussion will happen after all. Maybe.

    Posted in Ongoing Priorities [slideshow_deploy]

    6 Responses to OPM Director John Berry’s Mistaken Statements to Congress

    1. George Colgrove, VA says:

      OPM is a federal office employed by federal employees. When a federal office employed by federal employees is asked – "Are you paid too much?" The obvious answer is "No we aren't” and then they will go on with a list of obfuscations like the White collar comparisons. They will not answer the question truthfully if it will ultimately hurt themselves – they are feds – they lie!

      The federal workforce has janitors, it has mail clerks it has soda dispensers and "Burger Flippers" at the very high end and elite taxpayer supported outdoor theatre complex at Wolf Trap. The federal work force has carpenters, mechanics, painters, lumberjacks and so many more "BLUE collar" workers. With 2.7 million workers, the federal workforce is not that much different than the private sector. Yes it does edge a little more on the white collar side – but not enough to massively skew the numbers as they are.

      No, there is little federal factory work (unless you count in Government Motors), but with union factory workers, they often get paid far more than the average household income anyway. Union facotr work actually helps out the private sector side – ALOT!

      The point with this debate is that job for job – I think it was 96 out of 98 job categories – inept, inefficient, ineffective self-serving federal employees are paid substantially higher than their private sector counter parts in cash alone. Then you add on their lucrative $41,000 average benefits package, that gets them up over the 2x mark.

      Feds like to obfuscate that government lawyers are paid far less than private sector layers (one of the few jobs where the private sector does better than the feds). I believe them, but the obfuscation is in how the lawyer is employed. Self employed layers or partners to a law firm carries a lot of risk and are paid highly. However, they advertise for their business and they seek out and take on risky and/or elite clients (can you say Charlie Sheen?). These firms also have staff lawyers. Lawyers who are paid substantially less. These lawyers take on tasks assigned to them by the principals – they often do not seek out work. Federal lawyers are the equivalent of the staff lawyer – for their entire career. They do not seek out work, they are assigned work by the AG office or equivalent. Their job is not in defense of individuals who are willing to pay big sims for, but their job is to defend a criminal and corrupt federal government and gets paid via extortion from the taxpayers.

      Heritage did not account for the fact that most federal jobs are extremely specialized. In an office setting, you can have a single paralegal dedicated to ensuring a set of documents meets one specific law – and because of the size of the bureaucratic structure and volume of that work, will do nothing else. Whereas in a legal firm, the paralegal needs to know how to do hundreds if not thousands of different tasks on a dime. The paralegal in the feds will get paid $120,000 in total compensation for their job, where the paralegal in the private sector will only get $50,000 if they are lucky! The paralegal in the private sector actually has far more broad marketable experience and skills learned on the job, than their federal counterpart. This has to be factored into the equation as well.

      I believe Heritages analysis is far too forgiving to the feds for credentials. I place a lot more value on a MBA than a MPA. Go look at the curriculum in any college. When I was in school (years – ahem – ago) there was a major difference in the students who got a MBA (who were worked to the grind) and those who got a MPA who really did not have to work hard at all. In addition, of the two, who becomes the wealthy CEO’s? I do not believe a MPA will ever get you beig more than a high ranking public official.

      According to USA Today – almost nine months ago, the average non-fed (private sector) employees got paid $51,000 – average! Private sector employees gets about $9,700 average in benefits. The feds was paid (in cash) an average of $82,000 with average benefits of $41,000. The average private sector employee got a total compensation of $61,000 compared with $123,000 for the federal workers. USA Today's work was based on 2009 incomes.

      Since then, the feds got a 2% or 3% raise – I can't remember (2010). When Obama froze salaries (i.e. stopping a 1.1& raise, the feds awarded themselves with cash bonuses (upwards of a thousand or more – with taxpayer money!) and gave themselves in seat promotions (either by awarding a “merit” step increase or promoting up a pay grade). Obama has been hiring GS13,14 and 15's all over the place. Also during that period since USA Today published their report, household incomes in 28 states went down. Hundreds of thousands of more people are out of work then they were 9 months ago.

      Heritage’s analysis is 9 months old now with a lot of changes in the economy. I will speculate that if the USA Today redid their work, we will be seeing a federal workers’ total compensation hover at $125,000 or more whereas the private sector employee compensation will have actually drop to less than $60,000 to something like $58,000 to $59,000. Moreover, if Heritage redid its work – keeping the same level of conservative assumptions they will find the feds will be overpaid by 40% to 60% over the private sector.

      Solution:

      1.Link Federal pay to private sector pay by law – not collective bargaining.

      2.Using data from three private sector sources, come up with job classes with corresponding salaries accounting for time in service. Revise this index annually.

      3.To stretch public dollars and to encourage public sector employees to eventually seek some career time in a more lucratuive private sector (i.e. eliminate the dead wood), public employees should never be paid more than 90% of this index, but should also be protected by being paid more than 75% of the index.

      4. Legislate thatif the economy goes down – thereby bringing down private sector wages – that public workers compensations will also go down.

      4.Benefits should be based on private sector averages. Governments can offer more benefits than what the private sector does – if teh employee is willing to pay the added costs. But for basic benefits, the average taxpayer contribution should not exceed the private sector company contribution average, and that the average government workers contribution does not exceed the private sector employee average.

    2. George Colgrove, VA says:

      People may think I am hard on the federal workers – maybe I am.

      However, here is proof in the pudding: We have busloads of feds going to Wisconsin to protest against their "evil" boss (THE TAXPAYER). We have droves of feds during work hours protest in DC against their "evil" boss (THE TAXPAYER).

      But I ask this question: Where are the groups of federal workers who know they earn so much more then they should, and know that their benefits are way out wack and of this world? Where are these federal workers organizing and coming together side by side with the Tea Party to support the idea that we all should be getting fair pay and benefits? Where are these feds after a demonstration helping the Tea Party members picking up the grounds to make DC beautiful again?

      Where are they in the debate? They are polluting DC, Madison Wisconsin, making the citizens of Wisconsin pay a million dollar cleaning tab for the feds, the union thugs and Wisconsin state employees trashing their beautiful capital building. Or worse, quietly setting at their desk.

      It was said in the Batman Begins: “It is not what you are that defines you, it is what you do”. WHAT YOU DO! A fed working in the DoD can say he is working to assist with the defense of the country, but what he is doing is taking twice what he should for compensation – furthering the countries plunge into serious debt. It is the DHHS federal worker who says she also working for the people to eliminate poverty. But she is talking far more than she should for compensation. In addition she may also be going to Madison to fight the cash-strapped taxpayers there.

      Any fed who says by the fact they are a fed, makes them virtuous is lying to themselves. Who they are lies squarely in what they actively do. If they fight against the will of the taxpayer, they are not working for the taxpayer. If they cannot come out to support their fellow citizens in these tough times and agree to take a massive pay and benefit cut, then who they are is in what they do (or not do). The federal workforce who are not protesting against the people are just as egregious as those who do. They are quietly and secretly waiting out this storm behind their desks with high hopes we all forget this episode and soon they can continue to steal from us just as the protesters are in the open. These quiet feds are the bad ones – they risk nothing and gain everything.

      We the people are not going to forget. We are not going to slip aside and let the feds take us down as they are. We have a looming debt that is so big, that alone will not let us forget. The feds have cast shadows of lies, secrecy, deception and obfuscations over the country and these shadows will be long lasting.

    3. Jeremaih, San Antoni says:

      While I think the evidence is incontrovertible that the vast majority of Federal employees are compensated at significantly higher levels when taking all relevant factors into account than those in the private sector – especially when benefits and enhanced job security are taken into account – I'm taken aback by the personally vituperative tone taken in much of the current debate directed at the Federal workforce. They are NOT the root of the problem; the current compensation and related sytems used in the Federal government didn't just arise in the minds of evil,bureaucrats seeking devious ways to rip off Joe taxpayer. Congress and past administrations colluded to bring this about. To expect, as an earlier commenter did (perhaps tongue in cheek) that Federal workers should join Tea Party demonstrations against their favored status goes against the grain of human nature; indeed, much of the angst regarding the Feds sais favored status must be chalked up to envy. Were there real national outrage working here, you wouldn't find Federal agencies being swamped with applications for most vacancies, as they are, seeking to get in on the gravy train. So let's dial down the anti-Fed rhetoric. There IS pay inequity, but the personal, ad hominem attacks on the Federal workforce, but the public debate over how to resolve this issue is not furthered by such dubious tactics.

    4. J Woland says:

      Colgrove–

      Individual federal employees do not set their own salaries so why do you attack them on as if they do? The government, like any other employer, made an offer and the citizen accepted that offer. Why whine jealuously about deal that was made? It seems like what you really want is a smaller government with less entitlement and other programs. That sounds better to me than denegrating the work, credentials, and esteem of federal positions. It is easy to attack the federal employee but I applaud those that have the courage to take on the real fight which, in my opinion, is to reduce govenment programs, entitlements, and regulations. I would like a small government that pays enough to attract the "best and brightest" young people. Their willingness to forgo the opportunity to become rich should be acknowledged by competitive pay and benefits, respect for the profession of public service, and slightly more job stability than the private sector. The last thing we need are less talented people in the Government! And I would submit that it is beyond dispute that the quality of the talent pool for jobs is directly related to salary offered.

    5. Bobbie says:

      What gives government the right to set salaries at tax payers unknown expense? Private sector jobs don't do that! If people have a desire to serve the public, money wouldn't be an option, especially when it's not government's to give away. The reason for government acts of dereliction is directly because they hire anyone. At a salary not worth the positions.

      In government, if you have a degree, nothing else matters. Even if you don't live up to that degree. If you've gotten free college chances are it was just to get that degree and costing nothing shows no sincere effort was made in earning that degree. All for show, in government work. All accountable in the private sector.

    6. Joe says:

      OK. Let's say for the sake of argument that the Heritage Foundation's numbers are dead on accurate. Let's say that the federal workforce is paid more, job for job, than the private secotr in both compensation and benefits.

      My question then is: Who says the private sector is doing it correctly? Who says the private sector isn't skimping on compensation and benefits for the sake of profit? And if they are, why must the government underpay its skilled workers, just so they can say they are following suit?

      Make me understand why American workers, public or private, should be paid less just so we can increase the bottom line of employers.

      This is the question nobody wants to answer, because nobody can justify lower wages as a way of stimulating economic growth.

      You're all smart enough to have a sense of history, so I will remind you to look at the economic policies of all those fascist (and communist) regimes of the early 20th century. The very first thing they did was implement wage controls. Do we really need to just start destroying middle class earning power?

      Nobody will argue against the fact that lower taxes are good for the economy. But why do those taxes have to be reduced by slashing wages of public sector workers?

      Is it my fault that I went to colege and law schoolto better myself? Should I feel bad about maing $62,000 a year for doing work that I could probably get more for in the private sector?

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