The Magazine

The Privileged Public Sector

Mommas, don’t let your babies grow up to be ­anything but civil servants.

Sep 20, 2010, Vol. 16, No. 01 • By ANDREW FERGUSON
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

"Be happy in your work,” Col. Saito advised his prisoners in Bridge Over the River Kwai, and it seems that employees of the federal government are taking the adage to heart. The Washington Post—which, having shed many other functions of a news-gathering organization, nevertheless maintains its role as cheerleader for the hometown’s number one industry—reported the other day that government workers are getting happier by the week. 

The Privileged Public Sector

In one way, the news isn’t surprising. Americans like their jobs, as a rule. For the last 20 years the Gallup organization has polled the public about job satisfaction, and the percentage of Americans who were “completely satisfied” or “somewhat satisfied” has never fallen below 80 percent and usually bumps up against 90. “Completely dissatisfied” has never risen above 4 percent. While government employees have lagged private workers in job satisfaction, the gap is narrowing, according to survey data from the Office of Personnel Management. Spirits are evidently rising under President Obama, himself a good friend of public-employee unions and a great defender of government in general. Indeed, the percentage of working Americans who say they “like the work they do” is now the same in government as out.

This, said the Post, is “an encouraging sign as the government continues to woo applicants for hundreds of thousands of new positions.” Satisfaction among federal workers increased in nearly every area of the government, from the Nuclear Regulatory Commission to the Department of Transportation. Only sectors that have been publicly humiliated over the last couple years—for example, the SEC and the “intelligence community”—saw a decline in the satisfaction numbers. Typical, instead, was the Federal Deposit Insurance Corporation, where morale surged: The agency, said the Post, “was buoyed by its central role in the recent economic downturn after years of low morale. It took third spot among large agencies as it managed 140 bank failures in 2009.” Nothing like a surge in bank failures to brighten a government worker’s day.

Should we begrudge our government workers these glimmers of professional contentment? Lots of people think so. “Compensation reform,” a freshly minted phrase that must chill the bones of anyone in the federal government, is now a popular topic among conservative policy wonks. Government pay has become a hot topic among supposedly skinflint Republican legislators, who have begun calling for hiring and pay freezes as a help in balancing the federal budget. This led Jonathan Cohn of the New Republic to call government workers “the new welfare queens”—the new scapegoats, he meant, of Republican electioneering and antigovernment demagoguery. And it does seem to work. Scott Brown made the size and pay scale of the federal government an issue in his upset victory in Massachusetts this January. “Americans are fed up with public employee pay scales far exceeding that in the private sector,” says Rep. Eric Cantor, the House Republican whip.

Cantor’s statement served as decoration for a USA Today story last month. “Federal employees’ average compensation,” the article reported, “has grown to more than double what private sector workers earn.” The figures from an analysis by the newspaper’s Dennis Cauchon were jaw-dropping. Over the last decade, the average federal salary has risen 33 percent faster than the inflation rate. When total compensation is measured—salary plus benefits like health insurance and pension guarantees—government workers have seen an increase of more than 36 percent, adjusted for inflation. Over the same period, private workers got an 8.8 percent increase. The result: Average private sector compensation is $61,051; the average federal compensation is $129,049. 

The USA Today figures, and others making a similar point got up by conservative and libertarian think tanks, have been widely attacked by friends of government, and from here the battle descends into the trenches of pure wonk warfare, calculator-to-calculator, the bloody earth littered with one dismembered regression analysis after another. The defense of “apples and oranges” is often invoked: Government jobs, say union economists, have no exact analogue in the private sector, and so “a direct public/private pay comparison” is impossible.

When USA Today did make such a job-to-job comparison, however, the private workers nearly always came up short. With a few exceptions—lawyers, optometrists, airline pilots, paralegals—someone who chooses to work in government will wind up better off than if he’d sought private employment. Only 36 of more than 200 job titles offered higher average salaries in the private sector. 

President Obama’s former budget chief, Peter Orszag, acknowledged the apparent pay advantage, or pay premium, enjoyed by the feds. But he said the difference was inflated by the workers’ average education and skill levels, which are higher in the federal government than in the private labor force. So the conservative economists Andrew Biggs and Jason Richwine ran the numbers again, controlling for the higher educational attainment and skill level of federal employees. They discovered that federal workers still received a premium of 24 percent over similarly trained private workers. 

Others have argued that the difference between pay scales has been inflated by age and seniority: The federal workforce is older than the private workforce, and the average government worker has longer tenure in his job, and thus receives higher pay. Biggs and Richwine controlled for these factors too, as well as “race and gender, full- or part-time work, firm size, marital status,” and so on. The pay premium then stood at 12 percent, with no chance of falling further. As they pithily put it: “Private employees must work 13.5 months to earn what a comparable federal worker makes in 12.”

The arguments, all on their own, are revealing. The educational attainment of federal employees is higher in part because government has a built in ladder of incentives—subsidies, bonuses, and salary increases—designed to encourage workers into further education; this education is of course financed by taxpayers who are making less, on average, than the worker whose extra education they’re subsidizing. Most private businesses would love to offer their employees such a ladder—if they could afford it.

Moreover, the very long tenure of federal employees, which puts upward pressure on the pay scale, is by itself a testament to the government’s relatively lavish compensation and comfy work rules. Turnover in the federal workforce is infinitesimal. The “quit rate” in private industry last year was 19.1 percent—that is, one out of five private employees quit his job in 2009. In the federal government the quit rate was 2.3—that is, hardly anybody leaves Club Fed until they retire.

It is odd and unsettling when an employer, in this case the public, makes less money than his employee, the federal bureaucrat; if nothing else we can feel free to retire the phrase “public service” once and for all. 

Even so, we shouldn’t forget the demagoguery in the Republican campaign against federal pay, especially when it’s waged on grounds of frugality and budget discipline. While not quite as negligible as foreign aid and “earmarks”—two other targets of the phony deficit hawk—the federal payroll amounts to much less than 10 percent of the government’s budget, and firing every federal worker tomorrow would still leave a deficit next year of roughly $1 trillion, except nobody would be around to count it. 

There’s an irony to go along with the demagoguery. One reason the difference between federal and private pay widened at an accelerated pace in the last decade was the Bush administration’s decision to contract out many lower-paying government functions to private business. With fewer low salaries, the average federal salary rose. Another reason was the administration’s vast expansion of antiterror activities, giving the federal government an insatiable appetite for college graduates—raising the average federal salary again. The federal pay premium is in part a consequence of privatization and a strong national defense. 

If the issue of federal pay does take off, surely somebody, somewhere, sooner or later, will make the obvious point. Republican politicians were in charge of the entire federal workforce when compensation went into the stratosphere and federal employees began living a life beyond the reach of the average citizens who pay their salaries. Eric Cantor will want to explain that to all those “fed-up Americans.”

 

Andrew Ferguson is a senior editor at The Weekly Standard and the author of Crazy U: One Dad’s Crash Course in Getting His Kid Into College.

Recent Blog Posts