The Congressional Budget Office (CBO) released a report yesterday showing that federal employees receive substantially more compensation than similarly skilled workers in the private sector. National media, from The New York Times to National Public Radio, reported this “news.” The CBO report was spurred in part by two years of work conducted by The Heritage Foundation and the American Enterprise Institute (AEI) on federal compensation. We have repeatedly argued that the average federal employee makes more than similar private-sector workers and that Congress can cut costs by reducing this premium. …
Education Secretary Arne Duncan called for dramatically raising teacher pay last Friday on MSNBC, declaring that the current average salary (about $55,000) should be doubled to improve teacher quality. It’s a familiar refrain for Duncan, who in the same interview declared himself a “radical” when it comes to paying teachers more. Leaving aside whether the federal government should have any say in how local school districts pay their teachers, Duncan’s position is unwise. According to a recent study by The Heritage Foundation, public school teachers already receive total compensation (wages …
In yesterday’s “Room for Debate” feature, The New York Times asks whether public-school teacher compensation should be increased. The answer we give, based on our recent report, is that teachers already receive more compensation than comparably skilled private-sector workers. If the current compensation bonus has yet to increase the quality of the teacher workforce, it is not clear how an additional raise would produce better results. Public school districts should focus on maximizing the value of their existing resources rather than spending even more money inefficiently. But why is there …
In our work on public sector compensation, Andrew Biggs of the American Enterprise Institute and I have routinely counted enhanced job security as a benefit for public workers, and we have tried to quantify just how valuable it can be. Some critics have argued that public workers actually have no extra job security, but this is demonstrably untrue. A more interesting criticism comes from a recent letter to the editor in the Columbus Dispatch: While job security usually is considered a benefit for public-sector employees, it should be included in …
According to public employees’ unions, federal employees are substantially underpaid, and this year’s pay freeze is just one more slight against workers who could easily earn much more outside the government. It is curious, then, that so many people without federal jobs are lining up for them, apparently hoping to become “underpaid” themselves. Even out in the southern Maryland region, where farm fields predominate and fresh fish is usually on the menu, interest in federal jobs is apparently high. The College of Southern Maryland offers continuing education for adults, and …
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 …
The Federal Times calls it a “steel cage match” in which “two wonks enter, one wonk leaves.” Congressional hearings are never that exciting, but Wednesday’s House Oversight Committee hearing on federal pay does promise some spirited debate. At issue is how the federal government pays its civilian workers—and, more importantly, whether it pays them too much. Leaders of the Office of Personnel Management and National Treasury Employees Union will confront critics of federal pay for the first time in public. Those critics – “in the red corner” as the Federal …
The Heritage Foundation has posted a new working paper that considers whether public workers in California are overpaid compared to their private sector counterparts. The paper’s findings are summarized today in a Wall Street Journal op-ed, coauthored by myself and AEI’s Andrew Biggs. We argue that previous public-private comparisons at the state level have undercounted important fringe benefits. While existing studies claim that pay is roughly comparable between the sectors, we find that California workers could be overpaid by as much as 30 percent. The working paper has all the …
Lawrence Mishel, president of the Economic Policy Institute (EPI), does not like President Obama’s call for a two-year pay freeze. He writes: [The freeze]…will only enlarge the degree to which federal pay lags that of the private sector (a gap of 22%, according to the federal pay agent’s report. See Table 4.) ….and in the process [it] reinforces conservative myths, in this case the myth that federal workers are overpaid. This statement is not merely false, but also intellectually inconsistent. First the “false” part: Labor economists have been documenting a …
In an article titled “Scapegoating Federal Pay,” Paul Waldman of The American Prospect predicts that we will hear much more in the coming months about “outsized federal paychecks.” I hope he is right. The labor economics literature, going back more than two decades, is clear that federal workers enjoy a substantial pay premium over comparably skilled private workers. Two separate Heritage analyses have updated that literature for recent years and come to the same conclusion. President Obama’s deficit commission seems to agree, as it has suggested freezing federal pay. Despite …
