Are Most Federal Workers Overpaid? CBO Says Yes

The less educated you are, the better it is to work for the federal government -- at least when it comes to your paycheck.

That's more or less the finding of a new study by the Congressional Budget Office, which compared federal workforce compensation to the private sector using data from 2005 through 2010. The big headline figures, sure to make the rounds in conservative media, are that government employees made 2% more in wages, and 16% more in overall compensation, than their private sector counterparts. But as the graph below shows, there were vast variations between education levels. 

The higher your degree, the lower your salary and benefits compared to your educational peers. A high school graduate earned 36% more compensation than an equivalent private sector worker. A college graduate earned roughly the same salary, but made about 46% more in benefits. If you had a professional degree or doctorate, you made an average of 18% less in compensation. 

It's great that the federal government is providing livable wages to workers, and their families, who would probably have a tough time of it in the private sector. But as an efficient use of resources, the current setup doesn't make much sense. This might sound cold-hearted to some, but this is exactly the opposite of what the chart should look like if we're interested in attracting the best and brightest to public service, and keeping them there. According to the CBO, a full 33% of the federal workforce is employed in professional occupations, such as science and engineering, compared with 18% of the private sector. And yet, the better your bona fides, the more likely you are making less money than the friends you graduated with, and the more pressure there is to use government experience as a stepping stone to a more lucrative career. True, federal workers enjoy better job security than their private sector counterparts. As USA Today vividly put it, employees at some agencies are more likely to die than than get fired. Literally. But top performers generally care more about their pay stub than tenure. What we have now is simply a recipe for losing talent.  

And for those wondering, no, the CBO didn't compare investment bankers to USDA program analysts. The analysis controlled for various differences between workers, including years of experience, occupation, the size of their employer and geography. This is, as much as possible, an apples to apples comparison. 

The upshot: Federal pay might be too high overall, and it's probably not getting us a better government.