Wage-freeze proposal puts federal pay in spotlight

**Prince** · 11-30-2010, 09:55 AM

IF YOU WANT TO MAKE A DECENT WAGE AND HAVE GREAT MEDICAL BENEFITS BECOME A GOVERNMENT WORKKER!!!

Wage-freeze proposal puts federal pay in spotlight

President Obama's proposal to freeze most federal workers' salaries has intensified the debate over whether U.S. government employees are overpaid.

A report by the libertarian Cato Institute says that in 2009, the average federal civilian wage was $81,258 per year, compared with $50,462 in the private sector, based on U.S. Bureau of Economic Analysis data.

If you add benefits, total compensation swelled to $123,049, roughly twice the private-sector average of $61,051.

"In 200o, federal compensation was 66 percent above private-sector compensation. Today it's 102 percent above, so the gap is increasing," says Chris Edwards, author of the Cato report (available at downsizinggovernment.org).

Critics say such studies are flawed because the federal workforce has a lot more college-educated, white-collar workers than the labor force at large, which increases its average pay.

However, a study by USA Today, published in March, compared pay (excluding benefits) for more than 216 occupations that exist in both the public and private sectors. It found that average federal salaries exceeded average private-sector pay in 83 percent of these occupations in 2008, the most recent year Bureau of Labor Statistics data were available. On average, federal workers earned $67,691, almost 13 percent more than their private-sector counterparts, it said.

Larry Mishel, president of the liberal-leaning Economic Policy Institute, says that federal workers are underpaid compared with their private-sector counterparts, based on the annual report by the President's Pay Agent. The report, authorized by Congress in 1990, is prepared by the Labor Department, Office of Management and Budget and Office of Personnel Management. It is designed to compare pay rates for federal versus non-federal workers for the same job in different parts of the country, and eliminate any disparities.
22 percent less

It estimated that on average, federal workers were making 22 percent less than their private-sector peers in 2009.

Edwards calls that report "a giant black box. It's an extremely complicated calculation, a bunch of statistical modeling. There is no published study on how they do it." (Read it at links.sfgate.com/ZKRD.)

Edwards says, "Congress or the White House should hire an outside auditor to audit the whole federal pay and methodology."

Ralph Smith, a former federal employee and government contractor who now runs the website FedSmith.com, says government pay could use an overhaul. "It's a big clumsy system designed in the 1940s. It is kind of tuned, but not really, to job markets."

Based on his experience, Smith says that government employees can be overpaid or underpaid depending on the position and location.

Some federal agencies have problems hiring administrative people in New York City or San Francisco because the salaries are not high enough. Likewise, it has a hard time competing for technology employees because companies such as Google "will pay more and get the best people," he says. But "if an administrative person in Alabama gets a job with the Army or NASA, they will be there for life because they make so much more" than they could in the private sector.

Smith says federal employers don't have the flexibility that private-sector employers have to quickly adjust pay to meet local competition.

Also, "There is not a good performance appraisal system," he says.

Government workers get raises when they move from one pay grade to the next. They also get step increases at certain intervals, which must be approved by a supervisor. Obama's proposal would not freeze either of these increases, Smith says.
Across-the-board raise

The freeze would affect the annual across-the-board increase federal workers typically get. The president proposes this increase, which must be approved Congress. Obama had proposed a 1.4 percent increase for 2011 before calling for a freeze.

The proposed freeze would apply to all executive branch workers, including civilian employees of the Defense Department, but not to military personnel, government contractors, postal workers, members of Congress, congressional staffers, or federal court judges and workers, according to the Washington Post.

Edwards said the freeze is a good first step, but "They also need to look at benefits."

Federal workers enjoy a traditional defined-benefit plan plus a 401(k)-style plan with an employer contribution. Most also participate in Social Security. If they retire before age 65, federal workers typically get health coverage until Medicare kicks in, he says.

Mishel called the proposed freeze "unjustified. It's symbolic. We have calculated it will reduce deficit in 2020 by 0.3 percent."

He says that few private-sector employees get no wage increase. "The solution to our problems is not for people to be paid less. Reinforcing that is not good economics."

He adds that Obama should have demanded something from Republicans in return. "I think it's bad policy, and he didn't even get anything for it," Mishel says.

Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender@sfchronicle.com.

Read more: Wage-freeze proposal puts federal pay in spotlight

**bio-chem** · 11-30-2010, 10:07 AM

thats way too much for me to read. I'm lazy at the moment. I like the idea of cutting the federal budget. just curious though. when we are spending so asinine on "stimulus" why are we cutting the wages of people who actually do something? maybe the article covers that. or maybe the federal employees aren't actually doing something anyways. It is the federal government after all

**IronAddict** · 11-30-2010, 10:26 AM

Once again the middle class is getting screwed! Promises of attempting to fix this economy and you're nickle and diming the middle class. All the while congress doesn't have to worry about a pay freeze, watch as they get a pay increase next year.

Terrible, just fucking terrible!

**Prince** · 11-30-2010, 11:04 AM

Originally Posted by bio-chem

thats way too much for me to read. I'm lazy at the moment. I like the idea of cutting the federal budget. just curious though. when we are spending so asinine on "stimulus" why are we cutting the wages of people who actually do something? maybe the article covers that. or maybe the federal employees aren't actually doing something anyways. It is the federal government after all

I bolded in red the part I was pissed about, well not pissed, disgusted.

**country1911** · 11-30-2010, 11:21 AM

Those figures do not apply to all government workers. I am a federal firefighter and I can honestly say I make less than if I would go work for a city department. If I was to go private sector as a contractor, I would easily make 3 times what I do now. My benefits are not really that great either. I pay a ton for healthcare and even more for vision and dental. Under the new retirement system(FERS) I have to pay into a 401K and pay social security. Under the old(CSRS), employees did not have to pay social security or into a 401K, they received a pension. This retirement change happened some 20 years ago.

I absolutely hate that Obama is trying to balance the budget on the backs of gov employees. Being a gov employee is not all it is cracked up to be anymore.

**Big Smoothy** · 11-30-2010, 11:35 AM

Indeed.

Pay for fed gov workers is more than the private sector.

No offense intended to fed workers, as my pop was one for 35 years, and worked hard.

But what does this say?

It's a bad sign.

And now with the pay freezes.

DO YOU KNOW WHAT IS COMING?

Nobody says the word, but it is, coming.

AUSTERITY MEASURES.

AUSTERITY MEASURES.

AUSTERITY MEASURES, in the USA.

Meaning, cuts in federal pay is the BEGINNING.

Social Security, Medicare, and a host of other payments are next.

**bio-chem** · 11-30-2010, 11:42 AM

I'm fine with cuts to social security, medicare, and other government programs. we don't have the money for it anyways

**LAM** · 11-30-2010, 01:11 PM

fed gov doesn't have to worry about paying dividends to shareholders annually, should not be any surprise that gov employees get paid more than private sector.

**Prince** · 11-30-2010, 01:47 PM

Originally Posted by LAM

fed gov doesn't have to worry about paying dividends to shareholders annually, should not be any surprise that gov employees get paid more than private sector.

well, I think to most it is a surprise, and its fucking sick.

our tax dollars pay government workers, why should they make twice as much as someone working in the private sector and have better benefits doing the same job?

**LAM** · 11-30-2010, 02:00 PM

Originally Posted by Prince

well, I think to most it is a surprise, and its fucking sick.

our tax dollars pay government workers, why should they make twice as much as someone working in the private sector and have better benefits doing the same job?

here in Vegas there is a website called transparent Nevada Home » TransparentNevada which tells you the salaries of employees last year. hundreds of cops, firefighters, etc. out here making 200-400K a year in 2009 because of all the OT

Report says Las Vegas has world's fifth-worst economy
http://www.lvrj.com/business/report-...111061404.html

for the most part those that get paid wages derived from tax dollars make substantially more money than those that don't.

**LAM** · 11-30-2010, 02:07 PM

Originally Posted by Prince

well, I think to most it is a surprise, and its fucking sick.

our tax dollars pay government workers, why should they make twice as much as someone working in the private sector and have better benefits doing the same job?

that's the problem, no one to stand up for the "average" worker when it comes to wages. can't force private companies to pay higher wages, one of the many reasons why those on the low end of the mid income scale are upside down. wages in most private sector jobs have been stagnant since the 80's.

**Prince** · 11-30-2010, 02:47 PM

Originally Posted by LAM

that's the problem, no one to stand up for the "average" worker when it comes to wages. can't force private companies to pay higher wages, one of the many reasons why those on the low end of the mid income scale are upside down. wages in most private sector jobs have been stagnant since the 80's.

right, and CEO's of these companies are probably making 100 times more now that the 80's.

**REDDOG309** · 11-30-2010, 02:57 PM

If you listen to the A-hole telling you your new car payment is "only" 480 a month, you think your doing great.

**LAM** · 11-30-2010, 03:07 PM

Originally Posted by REDDOG309

If you listen to the A-hole telling you your new car payment is "only" 480 a month, you think your doing great.

**GearsMcGilf** · 11-30-2010, 04:04 PM

Originally Posted by LAM

that's the problem, no one to stand up for the "average" worker when it comes to wages. can't force private companies to pay higher wages, one of the many reasons why those on the low end of the mid income scale are upside down. wages in most private sector jobs have been stagnant since the 80's.

Yeah, if only we could just do away with the private sector altogether and live in a socialist Utopia like Cuba.

If not for the private sector, where is the tax $ going to come from to pay the sweetheart salaries that some of these govt workers have? One problem with the govt perks is that it it's not sustainable and erodes competition, leaving less private sector workers to foot the bill for those big govt salaries. This is exactly what has lead to many problems that EU countries are facing now.

I'd beg to differ though about private sector jobs being stagnant for 25+ years and would love to see your source on this. Unions have been forcing private companies to pay higher wages for years. Of course, not all companies are unionized. I can also remember when minimum wage was $3.35/hr.

**lnvanry** · 11-30-2010, 06:02 PM

Originally Posted by LAM

fed gov doesn't have to worry about paying dividends to shareholders annually, should not be any surprise that gov employees get paid more than private sector.

what does that have to do with anything?

b/c private orgs have to pay dividends, they then have less to pay the employees?

**GearsMcGilf** · 11-30-2010, 07:30 PM

Originally Posted by lnvanry

what does that have to do with anything?

b/c private orgs have to pay dividends, they then have less to pay the employees?

OMFG! LAM didn't say that did he? Govt agencies pay more because they don't have to pay out dividends to shareholders. JFC!!! This has got to be the greatest dipshit dumbass assertion I have ever heard in the history of internet arguing. You have to google pretty hard to find this kind of stupidity on the internets! LMFAO! I luv ya man!

He must have majored in Obamanomics.

Yes, govt entities also don't have to waste all that time trying to figure out how to allocate all that annoying injection of capital from private investors either when they are successful, so they have all this time to generate $, while their tenured drones work crossword puzzles and read the paper, and pay it to said drones. Damn, this is getting fun. Like shooting fish in a barrel.

Yes, it's very simple. Everyone knows that the govt runs business far more efficiently than the private sector because there is zero profit motive and zero competition. This is a system that has proven itself to be superior in one society after the other over the last 90 years, from the USSR, to Communist China, North Korea, etc. Once the profit motive is out of the equation, along with competition, and marginally qualified people are put on the payroll for life, with a defined benefit retirement plan and a guaranteed job for life, quality and efficiency increase exponentially, and we all benefit in the long run.

The answer is definitely to get rid of the private sector. LAM has already pointed out how much more efficient govt is by the very fact that the CBO already knows that the federal deficit will be cut by more than 50% by 2019. We might as well just shut this thread down now.

I believe Lenin described such people as useful idiots. lol My God! Yet, these lefties are such self proclaimed intellectuals and always pride themselves on being the smartest people in the room. Ironic.

**LAM** · 11-30-2010, 07:44 PM

Originally Posted by lnvanry

what does that have to do with anything?

b/c private orgs have to pay dividends, they then have less to pay the employees?

many small companies which are the highest employers of Americans simply don't generate revenues to give all employees cost of living increases and an actual wage increase. remember cost of living increases only cover the rise in inflation, so essentially the worker makes the same amount of money. now factor in the increasing costs of various goods and services. every year the average wage earner makes less but spends more just on "living".

companies that are expected to turn a profit either do so or people usually lose jobs. that would be one of the obvious main differences between certain equivalent jobs in the fed gov vs private sector. the manager at the fed job may get in "trouble" for going over budget because of OT while the manager in the private sector job gets fired. you also have to remember that the average worker in the US does not get a base salary + OT while many workers (whose wages are ultimately derived form taxes dollars) at the state and fed level do.

the society in the US is driven by the accumulation of wealth and possessions. those that make modest and average wages can no longer afford things that they could decades ago they have been priced out of many things.

One of the main factors in determining the "status" of the middle class is the " Personal saving as a percentage of disposable personal income". Basically after typical living expenses, etc. what % of the disposable income is saved annually. If you look at Line 34 on the graph from the BEA website is shows the steady decline in this % since 1970.

U.S. Department of Commerce. Bureau of Economic Analysis

Then on Lines 40 & 41 you see the steady decline of personal income in current and chained dollars

**danzik17** · 11-30-2010, 07:46 PM

Goddamn, I need to get me some government work.

**Zaphod** · 11-30-2010, 07:48 PM

Originally Posted by Prince

right, and CEO's of these companies are probably making 100 times more now that the 80's.

Why does everybody make a fuss over the pay of the middle class?

Worry about the guys at the top.

Check this out. Bill Moyers Journal . PAYDAY FOR CEOS | PBS

**Zaphod** · 11-30-2010, 07:51 PM

Originally Posted by lnvanry

what does that have to do with anything?

b/c private orgs have to pay dividends, they then have less to pay the employees?

Private companies are not obligated to pay dividends. Not by any means. They pay dividends to shareholders to keep their jobs. They are afraid that if they don't pay a dividend then shareholders will vote them out. Look at a lot of large US companies over the last 20 years. They lost money and STILL paid a dividend. Ford, GM and Chrysler were horrible for that.

Plus it boosted their own pay because they generally received company stock as part of their compensation.

**GearsMcGilf** · 11-30-2010, 07:52 PM

Expectations and tastes also play a role in that. My grandparents never went to college. But, an 1800sqft house and one car was considered middle class at that time. Nowadays, everyone has to have a certain type of car or a slightly nicer house than the neighbours. Consumerism plays a big role in what is considered "middle class" nowadays. Personal savings as a percentage of disposable income is a fairly ambiguous figure when you think you have to have certain things to feel comfortable.

**Big Smoothy** · 11-30-2010, 07:52 PM

Originally Posted by GearsMcGilf

I'd beg to differ though about private sector jobs being stagnant for 25+ years and would love to see your source on this. Unions have been forcing private companies to pay higher wages for years. Of course, not all companies are unionized. I can also remember when minimum wage was $3.35/hr.

Wages have been stagnant in the US private since about 1970, for the most part. There are many sources on this. I also studied this in school in the late 80s/early 90s.

As for unions, only 8% of the private sector workforce is in a union. Unions, are an endangered species, since their peak in the 1950s.

**GearsMcGilf** · 11-30-2010, 08:02 PM

That's because many corps nowadays, especially foreign corps doing business in the US, pay competitive wages and benefits in order to avoid unionization. That's not necessarily a bad thing. But, they see what it has done to the big 3 automakers, as well as others.

Yes, if you take inflation into consideration, wages have held steady. People haven't gotten richer over the last 40 years. CEO's certainly have. But, has that made you and I poor? I have nothing for nor against CEOs getting richer. Wealth isn't like a pie sitting on a table for the govt to cut in order to make sure that all of us children get an equal sized slice. Wealth is generated by those who create something or offer their labor in exchange for it.

**Glycomann** · 11-30-2010, 08:40 PM

This is all bullshit the National Bureau of Labor ans statistics report reads that on average federal workers are paid 26% less than their private sector counterparts. USA today took data from the the Bureau of Economic Analysis and conflated the numbers to provide the Republicans the stats they wanted to pit the middle class private against middle class public. Now watch regions with high percentage of federal government workers tank as furlows, hiring freezes and federal job cuts across the board flatten out those economies. It's a total joke to state that federal pay has doubled in the past ten years. G.W. Bush privatized nearly 1/2 of the federal work force. Those contractors are not considered federal employees. In fact they are more expensive than the federal workers they replaced. The Bureau of Labor and Statistics performs a very detailed comparison every year by geographic location to adjust Federal pay scales according to the private sector. Federal employees are always payed less anywhere from -15% to -30% roughly. You can go to their site and read the data conclusion and the methods used. The last thing anyone should buy inbto is some BS Republican taking points right now. It should be obvious that the first thing they attack is the middle class. Meanwhile they provide tax incentives for corporations to move overseas. That's right. hold on to your hat b/c there is going to be a huge sucking sound as the last jobs vacate the good ol' USA thanks to the new congress.

**LAM** · 11-30-2010, 08:40 PM

Originally Posted by GearsMcGilf

Personal savings as a percentage of disposable income is a fairly ambiguous figure when you think you have to have certain things to feel comfortable.

it's not an ambiguous figure at all, it's one of the main ones used to determine financial health. personal consumption expenditures are comprised differently.

the data below shows the constant increase in housing and related expenses at Line 18 and Health Expenses on Line 37

Table 2.5.5 Personal Consumption Expenditures by Function
U.S. Department of Commerce. Bureau of Economic Analysis

**min0 lee** · 11-30-2010, 09:32 PM

We work for the State and City and we actually getting a kick out of these replies.
Don't buy into all the reports you read.
We can both make more money in the private sector but the benefits suck.

**LAM** · 11-30-2010, 09:40 PM

Originally Posted by GearsMcGilf

OMFG! LAM didn't say that did he? Govt agencies pay more because they don't have to pay out dividends to shareholders. JFC!!! This has got to be the greatest dipshit dumbass assertion I have ever heard in the history of internet arguing. You have to google pretty hard to find this kind of stupidity on the internets! LMFAO! I luv ya man!

He must have majored in Obamanomics.

Yes, govt entities also don't have to waste all that time trying to figure out how to allocate all that annoying injection of capital from private investors either when they are successful, so they have all this time to generate $, while their tenured drones work crossword puzzles and read the paper, and pay it to said drones. Damn, this is getting fun. Like shooting fish in a barrel.

Yes, it's very simple. Everyone knows that the govt runs business far more efficiently than the private sector because there is zero profit motive and zero competition. This is a system that has proven itself to be superior in one society after the other over the last 90 years, from the USSR, to Communist China, North Korea, etc. Once the profit motive is out of the equation, along with competition, and marginally qualified people are put on the payroll for life, with a defined benefit retirement plan and a guaranteed job for life, quality and efficiency increase exponentially, and we all benefit in the long run.

The answer is definitely to get rid of the private sector. LAM has already pointed out how much more efficient govt is by the very fact that the CBO already knows that the federal deficit will be cut by more than 50% by 2019. We might as well just shut this thread down now.

I believe Lenin described such people as useful idiots. lol My God! Yet, these lefties are such self proclaimed intellectuals and always pride themselves on being the smartest people in the room. Ironic.

once again you have injected your opinion and bias while I have done nothing expect post data. were did I say or even imply that the fed gov was more efficient at anything?

**min0 lee** · 11-30-2010, 09:42 PM

Originally Posted by country1911

Those figures do not apply to all government workers. I am a federal firefighter and I can honestly say I make less than if I would go work for a city department. If I was to go private sector as a contractor, I would easily make 3 times what I do now.

Originally Posted by Glycomann

This is all bullshit the National Bureau of Labor ans statistics report reads that on average federal workers are paid 26% less than their private sector counterparts. USA today took data from the the Bureau of Economic Analysis and conflated the numbers to provide the Republicans the stats they wanted to pit the middle class private against middle class public. Now watch regions with high percentage of federal government workers tank as furlows, hiring freezes and federal job cuts across the board flatten out those economies. It's a total joke to state that federal pay has doubled in the past ten years. G.W. Bush privatized nearly 1/2 of the federal work force. Those contractors are not considered federal employees. In fact they are more expensive than the federal workers they replaced. The Bureau of Labor and Statistics performs a very detailed comparison every year by geographic location to adjust Federal pay scales according to the private sector. Federal employees are always payed less anywhere from -15% to -30% roughly. You can go to their site and read the data conclusion and the methods used. The last thing anyone should buy inbto is some BS Republican taking points right now. It should be obvious that the first thing they attack is the middle class. Meanwhile they provide tax incentives for corporations to move overseas. That's right. hold on to your hat b/c there is going to be a huge sucking sound as the last jobs vacate the good ol' USA thanks to the new congress.

I love how they write an article on a subject and taint the truth, I'm sure the majority here will tell you steroids are not the evil you read about on the news....but the news does stretch the truth a bit.

I worked in the private sector for over 30 years and worked with State, Federal and city workers and some are paid decent others are not. In fact there was a person here who turned down a job with State Dept because of the low pay and the fact you have to travel overseas to a shit hole.
No lie, the benefits are good for both of us but that's how it was in the private sector years ago.

**lnvanry** · 11-30-2010, 10:30 PM

maybe they should quota the # of executive schedule and GS15 salaries...

or reduce the pensions to reality...the idea of basing ones pension off the last year of pay (usually hyperinflated with tons of overtime) is a joke.

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