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.