Are Government Employees Overpaid?

Today the Congressional Budget Office released a report comparing compensation of federal employees with comparable workers in the private sector. This chart sums up the results:

The CBO concludes:

Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.

It is interesting that less-educated federal workers are the best paid, relatively speaking. One thing the CBO study did not try to address is how hard government employees work compared to those in the private sector:

People’s compensation is also affected by many characteristics that are not easy to observe or measure, such as their natural ability, personal motivation, and effort. The degree to which federal and private-sector employees may differ with regard to those characteristics is much harder to quantify, and no adjustments were made for those attributes in this analysis.

The study also does not consider job security. There can be no doubt that federal employees enjoy much greater job security than those in the private sector. It is not unreasonable to conclude that federal employment is a very good deal: 16% more compensation, on the average, perhaps for doing less work, and certainly with better job security. The CBO study, which was requested by Senator Jeff Sessions, suggests one way in which runaway federal spending might be reduced.

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