Are Federal Workers Overpaid? (II)

About a year ago I wrote a post about whether federal employees are overpaid. It’s a never-ending debate — and now the Congressional Budget Office has weighed in.

The CBO conducted a study that compared the wages, benefits, and overall compensation of federal employees and private-sector employees who shared certain comparable observable characteristics.  The study noted, of course, that certain important qualities that can have a significant impact on compensation — such as effort and motivation — can’t really be compared.  So, the study focused on objective, measurable factors, like educational levels, years of experience, occupation, geographic location, and demographic characteristics.

The study found that federal workers with just a high school level of education make considerably more than their private-sector counterparts — 36 percent higher in total compensation.  Federal employees with a bachelor’s degree also made materially more, receiving 15 percent higher total compensation.  Only when education levels reached graduate degrees and doctorates did private-sector employees earn more than federal workers, pulling in 18 percent more in total compensation.  Overall, federal workers earned 16 percent more than comparable private-sector workers.

The CBO study probably isn’t the last word on this topic — but it does provide significant ammunition for those who think government workers often are overpaid, and that we should look long and hard at the federal government payroll as a potential target for federal spending cuts.

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