CBO: Federal workers overcompensated

Pen Waggener/Creative Commons

Article Highlights

  • CBO released study showing federal-government employees receive higher compensation than private-sector workers

    Tweet This

  • CBO report helps rebut union claims that federal workers are underpaid

    Tweet This

  • Total average federal compensation is at 16 percent above private-sector levels

    Tweet This

The Congressional Budget Office has released a new study showing that federal-government employees receive significantly higher compensation than private-sector workers with the same levels of education and experience. The CBO report confirms many of the findings of a 2011 study I wrote with Jason Richwine of the Heritage Foundation and helps rebut union claims that federal workers are underpaid.

"While I have my quibbles with some of CBO’s methods and assumptions, it’s very good work and broadly consistent with the 2011 AEI study." -- Andrew Biggs

CBO found that federal employees’ average salaries are about 2 percent higher than those for similar private-sector employees and their benefits exceed by 48 percent private-sector levels, putting total average federal compensation at 16 percent above private-sector levels. With federal-employee compensation totaling $200 billion per year, a 16 percent pay premium is big money — almost $390 billion over ten years.

While I have my quibbles with some of CBO’s methods and assumptions, it’s very good work and broadly consistent with the 2011 AEI study. We found a larger federal pay premium because we sought to capture a broader range of federal compensation — including the implicit value of federal workers’ near-total job security — and because we used somewhat different economic assumptions. Nevertheless, the CBO report serves as a valuable contrast to the claims coming out of the federal Office of Personnel Management, which says that federal employees are underpaid by 26 percent relative to private-sector jobs.

Andrew G. Biggs is a resident scholar at the AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Andrew G.
Biggs

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression ā€” 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.