Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Tuesday, August 10, 2010

Compensation for Federal Employees

Ok, I have been waiting for this. Here is a recent article from USATODAY that will turn heads. The grabbing headline "Federal workers earning double their private counterparts". OK, let's talk about this myth.

I am always curious about data like this because for me, it is more telling about the private workforce than the Federal workforce, of which I am a part. The private sector is exploiting its workers and reducing benefits while paying CEOs and bankers huge sums. The CEO of BP, for instance, is going to walk away with a nice sum. And they justify that because he had years of "good service" and it was part of his deal from the start. The government sector has maintained the good old middle class value of worker benefits and stability. It's the only place left where you can count on a paycheck. The real story of GS salaries is much more complex and nuanced than the general public is willing to tolerate. Where to begin . . . .

1) All Government service salaries are capped. The most any GS employee can make in salary is $155K. That means you have to be a GS15. All government salaries are public information. Want to see? Check here. To be a GS15 you have to climb up the latter, it isn't given for free. Within any GS rank, there are 10 steps before you turn over to the next rank. Many people retire at GS12 or 13 after years of service. To go from a GS11 to a GS12, you are looking at 10 years of strong performance.

2) Government employees have a nice health care plan. In fact, if you recall, Obama wanted this to be a model for the entire country until Republicans scuttled it.

3) Government employees do not change employers every 3-4 years. They stay and as the saying goes, "Slow and steady wins the race".

4) Pensions are not what they used to be. Currently, pensions are small but we have the equivalent of a 401K now. It's called the "Thrift Savings Plan". The plan is built around a small set of high-quality, straight-forward index funds with low management fees. The reason they do so well is because they are so big and so many people are participating. The government matches 100% the first 5% invested by the employee.

5) People who have been in the service since before 1984 were not able to draw social security and they didn't pay in. They had a pension and they paid into that. This was changed in 1984. We now pay in, but we don't have the pensions. Newer ones like me can take Social Security, but we don't have the pensions like they older workers do. to read more about this check the link and scroll down to myth # 2.

6) There is no mandatory retirement. So it is more and more common to see workers beyond retirement age maintaining their work. I've talked about this is previous posts. These people will drive the averages up because 30 years of 3% raises adds up. And, a concession to the article, GS pay raises used to be much more generous. The most I've ever gotten over 7 years that I've been in service is like 4%. But in the past, they could be as much as 6%-8%.

7) The jobs on offer now require higher qualifications. We are in a defense laden economy and often these jobs require specialized skills and technology backgrounds that command higher salaries. All government salaries are based on department of labor statistics. So when the initial salaries are set, they should be in line with private sector salaries. In fact, it's the Republicans that really pushed for contractors. We have a contractor who told its employees that to win the new round of bidding, they would all have to take pay cuts. That's lie. I know because I was part of the selection panel and we never saw prices. We based the decision on the quality of the proposals only. This is how the private sector treats its employees. Is that really what Americans want? I want to make all these people GS and get rid of these contracting companies who line their pockets at the expense of working people.

8)Many government agencies are located in expensive areas. Salary is linked to the cost of living in local areas. 35% of the base pay for federal employees in the California Bay Area is locality pay. Try living on less than that in these areas? And even at that, with property prices what they are, even in a downtown, many federal employees can't afford to buy. The Beltway, Maryland and Virginia have entire economies based on government salaries. And many of those are much higher than they would be in the middle of the country. In fact, The Washington Post covered this aspect of things in its articles. So these drive up the average. I would love to move to where my house is actually located and work in an area that is cheaper to live. And that community would love the jobs. I always said that Congress would work much better if it were located in South Dakota. The Beltway is little more than 68 Sq. miles surrounded by the real world.

I do not earn more than my private sector counterparts. I know this because there are others in my area that do the same or very similar job that I do and they make $20K more a year than I do. They also have benefits and stock options. SO I don't apologize for my solid, middle class existence. Read some of the comments from other Feds if you want a view other than mine. But we all agree that rather than complaining, people should look to Federal Employment as a model. Please, all you bitter private sector employees, come join us. We'd love to spoil you.


The Law Talking Guy said...

The report is such obvious BS that it's surprising it's even reported. Recent college and professional school grads are never knocking down the doors of government offices for jobs. As a lawyer, I see this acutely: private sector "big firm" jobs start at $145 or $160K/year, which is almost the same salary as federal district court judges, and well above senior salaries in the US Attorneys' offices. And USWest is right that private firms of all kinds adjust salaries upwards in big cities (where fed jobs are) but fed salary "locality pay" is much less remunerative.

The only serious advantages of federal employment is that most (but hardly all) still have a 40-hour workweek for salaried employees (unlike the private sector where that has become a rarity for salaried employees thanks to Reaganism) and that, over time, one can begin to approach and exceed private sector salaries because the feds do not discourage seniority benefits while private firms now basically cycle out their workers every few years to prevent seniority from accruing.

Raised By Republicans said...

I was sitting next to a person on a plane recently who I think typifies the kind of person who buys into these myths. She was complaining about how 1) college is pointless 2) it's unfair that you need a college degree to get a good job/promotion in her company 3) she was "afraid" to go back to school because she didn't think she'd do well. Of course in other parts of what turned into a 30 minute lecture on the universe from this person, she also said that she spent most of her senior year in high school drunk.

From this I conclude, that many (certainly not all) of the people who get most upset about things like federal pay scales, are really displacing their own self recriminations and regrets for not taking K-12 seriously enough to make college or even tech school an option. Basically, this person had no skills other than literacy and punctuality. From this she concluded she was equally qualified with with all the "fancy college grads" that get promoted over her in her company. Rather than admit that her skill set was limited by her own life choices as a teenager, she blames the system.

The Law Talking Guy said...

"Basically, this person had no skills other than literacy and punctuality."

Which puts her ahead of a great deal of the workforce...

USWest said...

One problem is that people fail to understand what college gives you. It isn't just subject matter knowledge. Anyone can read a book. It's a dicipline of intellect and analysis. College graduates have learned how to learn and have demonstrated a desire to take responsibilty for their education, and their lives, as RBR points out.

My problem is that I have spoken to very educated people who have the same attitude as what RBR describes. However, I think it is coming more from an emotional response due to their dissatisifaction with their own jobs. The fact that government employees get 2-3% raises annually when many private sector workers don't eats at them.

The media hypes this- which feeds misconsceptions. I made an 8 point arguement that took a page. Which of these people are going to read all that? The headline that we make all this money is much more of a splash and I don't have to read the article to get the finer points.
So, as I mentioned in my post, let the federal system be the model. It isn't perfect, and there is abuse, just like in any other workplace. But for people like me, who value security and hard work (and we do work hard), a government job is it.

The Law Talking Guy said...

Everyone is pouring out of schools looking for government jobs. Every college student says they want to work for the government. Private firms are constantly losing people to the government. All these statements are false. And they would be true if government employment were so much better compensated than private employment. It just isn't so.