The average federal government employee receives a salary of around $75,000 per year. With present and future fringe benefits equal to about 76 percent of salaries, that makes for total annual compensation of around $133,000. How does this match up to the private sector?
CNN Money has a nice survey of the 25 highest-paying companies in the country, outlining the average total compensation per employee in each one. According to CNN, the closest match to federal employment is Microsoft, whose average employee compensation is $132,023 per year, making it the 17th highest-paying company in the country.
When high federal pay is pointed out, public employee unions counter that federal employees are more productive than the average private sector worker, due to their greater education and experience. But do you think that the average federal employee is more productive than the average Microsoft employee? Or Intel, or Qualcomm, both of which pay around the same?
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Something that is also missing here is that federal employees are forbidden by law from going on strike. USPS may be the exception because of their “unique” characterization.
Remember the air traffic controllers and what Pres Reagan had to do because both sides ended up backing themselves into a corner? Remember the consequences of that action. If we do not rmember our history we are doomed to repeat it.
Mr. Biggs is a flame baiter and inciter. His “facts” are incorrect and he only writes his drivel to instigate rebuttals and to be used as arguments by the people that watch Fox news all day. I just checked my earnings and leave slip and although I believe that my benefits are very high, they only come out to 34%, not 75% of my pay. He must be talking about the “derived benefit” I get for working in this 100 year old building with inadequate heating and cooling that the federal government cannot afford to bring up to 20th century standards. The only extra benefit I see is that I am working for the Army and doing my duty for my country to keep it safe for idiots like Mr. Biggs.
Not sure if it has been done but….about about half of the civil service isn’t on the GS scale….how does that effect the calculation? Congress has given many agencies the authority to set pay themselves, which resulted in far higher pay for Federal employees. Even though DoD has returned to the “normal” pay schedule, there were many people who were over the normal pay for their grade.
Also, the bump for job security is bogus.
Mr. Biggs has it in for federal employees because it was evident that he was an absolute joke during his tenure at the Social Security Administration, where Bush appointed him on a recess appointment during his failed social security privatization scheme. Biggs was run out of the Social Security Administration in disgrace (ask anyone in “the know”). He appears to still remain bitter.
What’s wrong, pray tell Mr. Biggs, with professional federal employees being paid on par with highly skilled workers in similar fields? Also, note the fact that he’s comparing average pay at Microsoft to average TOTAL COMPENSATION with the federal government. He also neglects to state that federal workers are mostly concentrated in and around high cost Washington D.C.
As Mr. Biggs is undoubtedly aware from his own meager salary as DCOSS at SSA in comparison to the exorbitant salary he is certainly now making on the Koch Brothers payroll, federal employees are most certainly underpaid. The only reason this is even an issue right now is the right wingers want to distract the country from the fact that CEO pay is now at record highs despite the current crisis. Therefore, they invent fantasies where federal employees are living high on the hog on $75,000 in Washington D.C. (what a joke).
Dear Mr. Mackay: The CNN Money figures are for total compensation, including benefits. As for my own salary, I took a very significant pay cut upon leaving the federal government.
I took a pay cut going into Federal service. Don’t blame us Feds for your poor negotiating skills.
The more I read this the more mad I get. I personally know and work with people in IT from Microsoft and the Federal Government, their pay and how efficient and knowledgeable they are. This article is rubbish.
Mr Biggs also forgot to mention that over half of the employees in Microsoft work in foreign countries where pay and benefits are lower. He needs to compare apples to apples with regards to just American workers. He will find out that the total pay and benefits for Microsoft workers in the US is twice as high as federal employees. Hate when people massage the facts.
I’m pretty confident the CNN figures are for US employees.
Quite amusing that Mr Biggs questions if federal employees are more productive than Microsoft employees. Considering how Microsoft continues to lose market shares and is losing it’s grip on the computer OS market, I would have to say yes, federal employees are more productive.
Using your mixed up logic, federal employees would still be overpaid if they were paid nothing, because of the value of all their “benefits.”
What a pile of cr*p. You totally skewed, if not outright lied, statistics to come up with your worthless conclusion and whatever mission you’re on. I don’t even know why I bothered to read this junk.
I think problem is not a governmaent job, problem is that privete sectors do not want pay good money to their employees. another thing is people should not blame gov workers, do not be jelous just apply for job. i dont think that avarage emps making 75k, not true, i would say 35-40k
Mr. Biggs,
There is something wrong with your analysis. On 18 January the Wall Street Journal reported that the average pay at Goldman Sachs was $367,057 in 2011, which they also reported was down from $430,700 the previous year. The chart above shows total compensation at Goldman Sachs at less than $150,000. Perhpas your figures don’t include bonuses, which are very small for Federal Employees. If you did not include bonuses, your analysis is worthless.
I believe the CNN figures exclude top executives, who obviously would push the average higher. So the CNN figures are close to a median or typical employee at a given company, which (as I noted in a different response) may strengthen the point of the blog.
Mr. Biggs, in your analysis of the average federal pay, does it also exclude “top excutives” in the federal work force? If so, wouldn’t that lower the federal average too?
Does the study exclude the pay for top federal AND private executives? The average federal employee these days is well-educated and takes a federal position understanding they are making a choice between the possibility of very high total compensation in the private sector, or the stability of a federal position with much lower compensation potential. This is why I took a pay cut to become a federal employee and earn a fraction of the total compensation of my college classmates in the private sector.
Article claims that the average federal salary is around $75,000. I don’t know how it was calculated, but to make that salary a federal employee in most of the U.S. would need to be a GS 12 step 4. I guarantee that the average fed is no where near that grade/step. Let me see what the average grade of a federal employee is and I’ll decide if it seems they make too much money. I’m guessing that some kind of arithmetic mean, skewed by the high salaries of presidential appointees and congressional staffers, was used to arrive at the “average” salary. Most feds make no where near that kind of pay.
High salaries for top executives obviously would push the average up, but a) there aren’t that many political appointees, SES, etc., and b) the mean federal wage isn’t that far above the median. So I take your point, but in practice it doesn’t generate a big difference.
Did the study exclude the salaries of top executives for private companies and include the salaires of top federal executives?
I was a government employee early in my career. I think many bureaucrats develop a fear that they could not compete in the private sector, which may explain why they react so aggressively when their comfortable status quo is challenged.
Perhaps that fear is justified after they have spent years adapting to the public sector bureaucracy that does not reward individual initiative, values inefficiency, and rewards the ability to consume one’s entire budget every year rather than finding ways to streamline and do more with less.
I also remember a culture that had a distinct “us vs. them” attitude when it came to the public. The allegience of agency folk seemed to be more to themselves and whatever resource or sector they were charged with “owning” then to the public who supplied the revenues to support their activities.
This is consistent with the attitude toward the taxpaying private sector we see exhibited by the ultimate Big Government promoter, Barack Obama. Taxpayers are just lambs to be fleeced. If government is spending too much for the available revenues, it’s because the lambs aren’t giving their “fair share”.
This guy Biggs looks familiar. Did he not testify before Ross’s committee to reduce federal pensions last week? Check it out on YouTube. I apologize in advance if I’m mistaken.
By the way, I have a PH.D. degree as a federal employee. Most of my colleagues have at least undergraduate degrees. Quite of few of them have Ph.D. degrees. I have never had so many coworkers with Ph.D. degrees except in universities.
I started my federal employment in October 2009. My pay was actually lower than my private employment when the locality was considered. On top of that I lost the potential bonus of up to 20% of the salary.
One benefit for federal employment is that I have better health insurance. My private employment also has pension plan which I did not have to contribute although it is less generous. The big advantage for federal employment is job security. This is all.
I truly doubt that most federal employees are more educated and more experienced. They attend the same schools and make the same grades as the rest of the population. They just happened to apply for a federal government job and get hired. That statement was a stupid argument. You also have an added problem with a federal employee in that once they are hired, it’s next to impossible to get them fired, due to the fact that the union protects them, whereas in private business, if you don’t perform as expected, you’re fired. Another point needs to be made on the Federal payscale. I may be wrong here, but I believe that a federal employee of a , say Grade 13, is paid the same amount whether they live in Peoria, IL or Ville Platte, LA. The scale is therefor set so that a person can make a living wage no matter how high the cost of living is. Since many Federal employees reside in and around the DC area, that pay must be higher than average for them, so it’s higher than average everywhere.
That CNN article talks about average salary, but you’re comparing it to total federal salary and benefits. Those aren’t the same things.
No, fed salary is not the same everywhere in the U.S. It is much higher in DC then it is in the rest of the U.S. For instance a G.S 13 in DC makes about 8 grand a year more than some one in the RUS (Rest of United States) category.
You are wrong about a few things. First, Unions ensure employees get fair treatment. There is a protocol for firing people who do not perform. That person is first placed on a PIP (performance Improvement Plan) at the end of which, they have either inmproved and can continue employment or they have not and employment is terminated. I have seen dozens of people fired for poor performance in the past 3 years. Second, pay is adjusted for locality. Meaning if you live in a high cost area like Los Angeles or Washington DC, you get paid more than someone working in New Orleans or Baton Rouge even though you are the same pay grade. Third, there are unions in the private sector that protect employees much more than any government union. Autoworkers, plumbers and electricians are just a few who have unions that work to protect their employment.
Tina you can’t really make a statement about the education and experience of federal employees if you really have no idea what you you are talking about. There are many different areas of government that people can work that are not just limited to administration, like for instance medical and engineering, and these people would have to go to medical school and probably have advanced degrees in engineering, so they wouldn’t go to the same schools and get the same grades as the rest of the population. As far as we just happened to apply for a federal job and get hired, we are hired to do a specific job because of our experience and education. You make it sound like luck, we just walk in file out a form and we get hired. Everyone is free to apply for a Federal job. I can’t understand why federal employees are being targeted. When the economy was good and everyone was thriving in their private sector job getting bonuses and huge raises no one was complaining, now everyone points a finger at federal employees, why? When all this was going on, we weren’t getting that. Federal employees don’t get raises and promotions and bonuses like in the private sector. If we complained about that we were told to if you want to make that kind of money then leave the government. They choose not to work for the government, why should we be demonized for it. And you are wrong about the pay-scale. If you are a GS-13 in AZ and in DC you are paid the same base salary, but you are paid locality pay and this is based on the cost of living in the area where you work and reside, so someone living in AZ is not going to make the same amount overall as a person living in DC.
That Heritage foundation study said that almost 1/3 of the federal benefits premium was job security (i.e low risk of layoffs). That’s pretty problematic to begin with, and it makes it almost impossible to compare to a specific company. You either have to discount it completely, in which case average federal employee compensation is at least $20K less than Microsoft’s, or you have to figure out what the job security premium or discount is for the company–since companies that compensate their employees really highly have a lower risk of layoffs, they’ll all going to have a job security premium that’s pretty close to the federal government’s.
The figures I cited here did not include the value of job security; they’re salary and benefits only.
I submit that the wrong comparison is being made. I believe that if salaries of federal employees are to be compared to anything, they should be compared to those of similar size companies that do similar work and provide the temp employees that the federal govt uses. Lockheed Martin, General Dynamics, L3, Booz Allen, Etc.
To include all the SES employees into the federal sample (most of who make less then $175K annually) and not include the Senior Executives with similar responsibilities in the private sector severely skews the comparison of average to average.
Another thing that I believe severely skews the total cost of ownership of the federal side of things is that I believe that the “fluff” built into costs on the federal side is due to lack of efficiencies. I worked in the private sector for seven years as an executive after I retired from the military and did a lot of hiring of personnel. I can say that the benefits and salaries we offered to our employees were actually better (other then the pension) than what the federal govt offers and our costs were RADICALLY lower. Far lower than the cost of the pension explains.
As another anecdotal incident, I too took a $35K pay cut to work in the federal service a couple of years ago, and my benefits aren’t truly comparable. It may have something to do with me being in the IT field where I haven’t ever seen pay parity with the private sector for the equivalent position and skill.
does this include USPS workers?
“When high federal pay is pointed out, public employee unions counter that federal employees are more productive than the average private sector worker, due to their greater education and experience”
ive yet to see more lazier workers than at my local USPS branch (mind you, the rockefeller center one in NYC, which is one of the major ones in the country)
Andrew – do the numbers you cite for federal employee pay averages vs private sector include all salaries and bonuses – Federal government SES and non SES vs. Private sector Executives and non executives?
Dennis, I don’t believe they include bonuses on either side, but the private sector numbers don’t include senior executive pay at all. They’re more for the typical (as defined by CNN) employee at the company. If you did include private sector salaries/bonuses for senior executives then the Microsoft average would go up, presumably by a lot. But that’s the difference between the median and the mean. In other words, what these (admittedly non-scientific) numbers show is that a typical federal employee receives about the same pay as a typical Microsoft employee. Maybe they have the same skill levels as well, but overall I kind of doubt it.
Then the whole mean and median is flawed because two dissimilar groups are being compared. That is the whole point of my comment. You cannot legitimately compare an average of all federal salaries against the average salaries of just part of the private sector, especially when you include the highest earners in the federal group but exclude them in the private group.
There is also another flaw in the “non study” and that is entire compensation is taken into account on the public side but not on the private side. Again the whole comparison is designed to skew and favor one point of view and is not legitimate.
Yes. Pay = salary compensation.
According to Microsoft’s latest annual report, in 2011 they paid out $2.1 billion in ‘stock-based compensation’ to their employees (note that they’re not called “stock options” anymore by most companies). The company currently pays 100% of health care costs for its employees, which also has to be quite expensive – enough so that they are ending 100% coverage next year. It’s very much apples and oranges to compare pay+compensation for federal workers to only base pay for private industry workers.
Sorry, should be a “not equals” sign between ‘salary’ and ‘compensation’ in the first line of my reply, appears the blogging software rendered it as an HTML tag.
After looking at the CNN/Fortune survey methodology at http://money.cnn.com/magazines/fortune/best-companies/2012/pay/ their “pay” figures are for “Average annual pay: yearly pay rate plus additional cash compensation for the largest classification of full-time salaried and hourly employees.” It is unclear if “additional cash compensation” includes all benefits to employees, is just cash bonuses, or some mixture.
What a load of el-toro-poopoo! What they do not tell you is this average includes the government employee SES or Senior Executive Service salaries, state and local government salaries as well but doesn’t include private sector Executive Salaries. If you compare apples to apples, state and local government employees do average higher versus private sector when comparing like jobs because of Union influence at the state and local level. Now if you compare federal employees (Hourly and SES) against private sector employees (hourly and Executive) average salaries then federal workers are actually underpaid versus their private sector counterparts. I actually had to take a 35K per year pay cut when I decided I wanted to make a difference in Veteran’s lives and went to work for the Veterans Affairs Administration. Even with that 35k more job in the private sector my company was still underpaying me. So stop spewing the half truths and tell the whole story. Yes the Federal State and Local governments have become to large and intrusive in our everyday lives but federal employee salaries are a very small part of that overall monstrosity we call the federal budget.
Dennis — Not to overstate the relevance of a single example, but wouldn’t omitting senior executives at Microsoft in the CNN average actually strengthen the point, since it shows that the comparison is more toward a typical Microsoft employee and not toward an average driven up by a small number of really highly paid executives?
That is the point. Private sector executives pay is not included in the numbers of the private sector but their equivalent counterpart is included on the public sector side. This skews the average dramatically. if a comparison is being done it should actually be three types and then by job comparison. The two types should be Executive comparison pay, non executive pay and then a average of both on each side.
It is also important to include stock options available in the private sector and not available in the public sector. Exercising stock options that are available to a private sector employee simply because he/she works for said company is income and that income is not not available to public sector.
Very few private sector workers have access to stock options — around 8% overall (http://www.bls.gov/opub/cwc/tables/cm20040628yb01t1.htm) and as BLS points out, “having access to stock options differs considerably from actually receiving them.” So we don’t have a great idea of how many people really have stock options and what they’re worth, but I really, really doubt it would affect the results very much. Federal employees, I’ve noticed, seem to think that every private sector worker gets stock options when actually it’s not that common.
Mr Biggs, the fact that you left executive pay out of the comparison skews the private sector pay downward. The fact that you and others advocating lower federal pay compare “averages” also skews compensation. One CANNOT compare averages, the results are useless. You cannot compare a doctor at the the VA or Center for Disease with a worker at McDonalds. Job classification comparisons indicate many federal positions are underpaid. Sure some are overpaid, mostly in the lower clerical positions. Try telling the seven CIA operatives’ families that they are overpaid. Compare apples to apples please.
‘Federal employees are more productive than the average private sector worker, due to their greater education and experience’. Ha!!!! That is the most ridiculous statement I have ever heard. I worked for the Department of Labor for about 2.5 years out of college and I have seen more productive manniquens at the mall. Seriously, that is one of the reasons I left is because of feeling like I didn’t deserve such high pay and for other reasons of course. Working for the federal government use to be an honor but today I would say it is an embarassment.
“But do you think that the average federal employee is more productive than the average Microsoft employee?”
Yes, considering there are hundreds of thousands of active military personnel that are federal employees.
And you think Microsoft employees are more productive than our heros? How dare you.
An interesting retort… yet I feel obliged to point out a couple of problems with it.
A) Most statistical analyses (such as this) that I’ve seen tend to separate out Military Personnel (active duty, retired, etc.) from Civilian Federal Employees.
B) Few would argue that younger active duty military personnel are over-paid, and nobody has ever argued that hazard pay (tax-free boost of income while in deployed in danger zones) is too generous.
C) As effective and incredible as our military men and women are (heck, I couldn’t do what they do!), they are not ‘productive’ in the economic sense. Microsoft and the other private companies on the chart above produce and sell various goods and services, for which they are compensated in the market. Military personnel provide a valuable and important service, and are compensated, but that system is distinct from the economic markets being discussed.
D) If we stipulate that the military is wonderful and awesome and worth more respect than I can adequately put into words, do you have any comment on the actual meat of Mr. Biggs’ post? (IE: non-military Federal employees are neither productive nor underpaid)
JL: Members of the military aren’t included in the salary figures I cite, nor are they included in any of the work I’ve done on federal pay.
Yes, the same statistics are flung around in my country by the media as well. What they usually forget is that the mass of low ranking federal workers (the vast majority) isn’t anywhere near that, while this spike is generated by a small minority of high level Feds who make a lot of money. This statistic is practically worthless.
Nice try, but this form of “argument” has been debunked a bazillion times all across the globe. You Yanks really are slow.
The next step by our media is then to flaunt statistics over how women still earn less than men. Of course there they too forget several highly important facts. So when are you going to bring something like that?
Populism, nothing more, and a rather pitiful attempt at it.
For what it’s worth, the median federal wage — that is, the pay for the typical worker — isn’t that much lower than the mean or average wage, because the federal pay distribution is a lot more compressed than in the private sector.
Says who Andrew Biggs???? Where are “you” getting your info. I agree with AK47 he is so on the money. It all depends on how you firgure averages or how the averages are twisted. WG pay is very low and the majority of people that work for the goverment are WG not GS.