It is widely accepted that government workers earn less than their counterparts in the private sector. New data from the Office of Personnel Management (OPM) backs up this belief, showing that federal employees earn 26.3 percent less than those in the private sector. However, according to an editorial in the Federal Times this pay gap might be significantly smaller or even not exist at all.
Federal Times points out that if such a massive difference in pay actually existed, "midcareer feds would be quitting in droves, even in the midst of this flagging economy, because they could earn so much more in the private sector." Since federal employee turnover rates are actually lower than those in the private sector (1.3 percent compared to 3.5 percent) there is reason to believe that civil servants are not seeing greener pastures outside the government. Why are federal employees earning a quarter less than private sector workers and yet turnover remains low? Because, the article argues, the pay gap data is wrong.
The editorial claims that there are three reasons why the pay gap reported by the OMP is not to be trusted. First, the General Schedule, used by the federal government to determine the pay scale of the majority of civil servants, has not been updated to match an increasingly educated federal workforce. Second, the calculation employed to determine the pay gap uses a single pay adjustment for all federal employees including those in hundreds of different job types covered under the General Schedule. By lumping together the pay of low skilled (e.g. clerks) and high skilled (e.g. lawyers) federal employees, the pay comparison statistic is likely skewed to such a degree that it does not accurately reflect the true public-private pay difference for any individual job. Third, the information on nonfederal employee salary used to compare to federal employees is often not real. In fact, up to 89 percent of the data by the Federal Salary Council is "manufactured, or modeled, rather than derived directly from real private-sector and state and local government jobs."
The solution, claims the editorial, is to compare individual federal jobs directly with their private-sector equivalents (e.g. federal doctors to private doctors and federal clerks to private clerks). If the government is going to compete with private sector employers, it has to have accurate information on how its compensation compares, in order to attract the best and the brightest.
Mike Jones is a researcher, writer, and analyst on national and international security. He lives in the DC area.