Government Employees Are Overpaid

Remember the good old days when it was possible to talk about “public servants” with a straight face? In 1958, liberal economist John Kenneth Galbraith wrote a book titled The Affluent Society, in which he contrasted America’s fabulously wealthy private sector with its alleged poor relation, the public sector. Galbraith was probably wrong, even then–he was wrong about nearly everything–but in the decades that have since gone by, the idea that the public sector is underpaid has become increasingly risible.

Today, we live in a two-tier society, with government and its employees and hangers-on lording it over the rest of us. Governments are the greediest institutions in our society, and government employees use their power to, among other things, overpay themselves.

A number of economists have tried to quantify the difference in compensation between private sector and public sector workers. This calculation by the Committee to Unleash Prosperity is not as disproportionate as some I have seen. That is likely because it only applies to state and local government employees:

We keep harping on this outrageous scandal of the pay inequity between government and private employees. This taxpayer rip-off has been going on for 40 years and NOTHING happened.

Our CTUP economist, EJ Antoni, notes that taxpayers are paying a 40% premium to state and local government employees over comparable private employees. The data show that taxpayers pay public sector employees 23% higher salaries and a whopping 79% higher benefits than private employers. This doesn’t even include the value of lifetime tenure (i.e. you can’t get fired from a government job no matter how poor your performance).

The disproportion is probably even more grotesque with regard to federal employees. At what point will taxpayers tell our employees that we are no longer able to keep them in the style to which they have become accustomed?

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