In her letter of May 5, Colleen Kelley, president of the National Treasury Employees Union, argues that my April 22 op-ed "Guess Who Makes More Than Bankers: Their Regulators" is flawed because I did not compare average job-specific salaries for bank regulators to bank salaries from the BLS National Compensation data. Ms. Kelley misses the fact that this comparison was in a detailed report issued by the American Enterprise Institute at the time the op-ed appeared.
Comparing similar positions in banks and their regulatory agencies—e.g., comparing salaries for accountants, secretaries and so on—government salaries far exceed private sector salaries. For the vast majority of job categories, bank regulators' pay exceeds the 90th percentile of bank salaries.
A job-by-job comparison of bank regulators' pay with the salaries of federal government employees at on-budget agencies shows bank regulators earn a 20% premium. Moreover, bank regulators receive extra nonsalary compensation worth between 5% and 10% of their salaries.
Ms. Kelley justifies regulators' high salaries by the extensive training needed to understand bank regulations. It may take six years for regulators to train an examiner, but bankers must learn the same regulations and how to run a business in far less time—and the government doesn't pay a dime for bankers' training. Further, Ms. Kelley argues that bank regulators "have to go toe-to-toe" with the best-of-the-best that are protecting the banking industry's interests. This makes me wonder: Are the employees of, say, the Justice Department or the Federal Trade Commission spared the stress of going "toe-to-toe" with industry "big guns" because they earn 30% less?
American Enterprise Institute