Federal Worker Pay: This Much Is Too Much

A new CBO study of federal workers' pay finds that:

Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.

Civil servants with professional degrees do worse than their private-sector counterparts, the others do better. Overall, the federal workers come out ahead.

Megan McArdle asks, Federal worker pay: how much is too much? She says:

The right question is not "Would these people make less in the private sector?" It is "Are we getting a high enough quality workforce?" And also "Could we get the workforce we need for less?" At any rate, that's the right question if you view government programs as a means to provide services.

True, but "Would these people make less in the private sector?" seems a good place to start in answering "Could we get the workforce we need for less?" There are exceptions (financial regulators) but you don't much hear it argued that the qualifications and experience of federal workers need to be significantly upgraded. And we know we could retain the federal workforce we already have at lower rates of pay and benefits, because that's what the study shows. If federal workers are overqualified for the work they have to do, the savings would be greater.

The federal government has an obligation in this. It isn't supposed to pay its workers what it thinks they deserve. It's supposed to pay them wages and benefits like those of similarly qualified private-sector workers. The CBO study says it is failing to do that. So it looks as though something is wrong with the system for setting pay and benefits in the federal government.

If we're suggesting better questions, here's mine: How does that system actually work?