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Obama's New Economic Chief Understands Federal Employee Pay

9:30 AM, Sep 13, 2011 • By ANDREW G. BIGGS and JASON RICHWINE
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While current data on job applications is difficult to obtain, we suspect federal jobs are still highly desirable. Why else would people buy books like Ten Steps to a Federal Job or pay to attend classes entitled, “The Secrets of Acquiring Federal Employment”? Probably not so that they can become underpaid workers.

Overcompensation of federal employees isn’t a small matter for the budget. The total premium—including wages, benefits, and job security—implies that reducing federal employee compensation to market levels could save taxpayers hundreds of billions of dollars over 10 years. Given the size of the premium, even large cuts should not harm recruitment and retention.

In other words, federal pay reform could generate savings to the budget without significantly reducing services to the public.

Just ask President Obama’s top economic advisor.

Andrew G. Biggs is a resident scholar at the American Enterprise Institute. Jason Richwine is a senior policy analyst at the Heritage Foundation. 

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