January 24, 2007

Govt. Pensions: Federal pay, benefits double private sector's

Report: Federal pay, benefits double private sector's

By Karen Rutzick

New figures from the Commerce Department's U.S. Bureau of Economic Analysis show average compensation for federal employees to be double that of private sector workers for the first time.

Federal workers earned an average of $106,579 in 2005, including benefits, or about twice the average private sector compensation of $53,289 with benefits included. This marked the first time federal compensation reached this point; for 2004 the bureau's statistics put it at slightly less than double the private sector's.

Without benefits, the difference for 2005 is less. Federal employees earned an average salary of $71,114 while their private sector counterparts earned $43,917.

Read the full article here: http://www.govexec.com/dailyfed/0806/080406r1.htm

May 18, 2006
Pay Gap: A Different Take

By Karen Rutzick

The pay gap between private and public sector employees seems to be a given. Just this week, 10 congressmen made their case for a higher 2007 civilian pay raise than President Bush has requested by citing a 30 percent private-public gap reported by the Bureau of Labor Statistics.

"The federal government may never be able to compete with the private sector, dollar for dollar, but we must ensure that we do not fall further behind in the battle for talent," Reps. Tom Davis, R-Va.; Jon Porter, R-Nev.; Steny Hoyer, D-Md.; Chris Van Hollen, D-Md., and others said in a letter to fellow members.

But a new paper from the libertarian Washington-based think tank the Cato Institute argues that the pay gap actually travels in the other direction. Pointedly titled "Federal Pay Outpaces Private-Sector Pay," the paper by Chris Edwards, the institute's director of tax policy studies, makes the case for freezing government salaries.

By bundling federal benefits -- including defined pensions, the Thrift Savings Plan and health care subsidies -- together with wages, Edwards calculated that the average federal worker earned $100,178 in 2004, compared to $51,876 in salary and benefits for the average private-sector worker. Those numbers were based on statistics from the Bureau of Economic Analysis.

"The federal civilian workforce has become an elite island of secure and high-paid workers, separated from the ocean of private-sector American workers who must compete in today's dynamic economy," Edwards wrote.

Read the full article here: http://govexec.com/dailyfed/0506/051806pb.htm

Also for a really interesting read take a look at the Cato Institutes article on the "Parasitie Economy"

excerpt: "It is useful to describe the United States as having a dual economy. On the one hand, there is the private-sector economy, which produces goods and services in response to the wants of consumers and businesses. On the other hand, there is the government sector, which largely redistributes income. Typically, government is said to redistribute income from rich to poor or from young workers to older retirees, but increasingly there is evidence that individuals use government to redistribute income from the general taxpaying public to themselves. Author Jonathan Rauch has termed Washington, D.C., a "parasite economy."[2] Of course, not all governmental activity is of a parasitic nature. The protection of rights--through police, courts, and national defense--is an essential function of government. Many traditional functions of government such

as providing roads and schools do yield benefits to taxpayers, (though some of those services might be produced more efficiently in the private sector). However, as government as grown larger, the parasite economy--that is, the people who derive their livelihood from government spending and taxes--has flourished. The amount of government spending defines the potential "pie" from which the parasites ("rent seekers" to economists) try to siphon off income for themselves.[3]"

Read the full article here: http://www.cato.org/pubs/pas/pa-250.html#

Mallard Fillmore 9/14/06:

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