Tuesday, February 14, 2012

Apples, Oranges, and the Assault on Federal Employees

A January 2012 report, "Comparing the Compensation of Federal and Private-Sector Employees", claims that the federal government pays "16 percent more in total compensation than it would have if average compensation had been comparagle with that in the private sector, after accounting for certain observable characteristics of workers."

The report and a related blog from the CBO director are full of numbers that one has to be a mathematician or economist to follow easily and understand.  The frightening thing is that in today's depressed economy and with many Republicans in Congress having apparently declared war on the federal workforce, this report is likely to be used as the basis for further chipping away at federal salaries and benefits.

The problem with this report is that it is not just comparing apples and oranges, it's comparing apple pie with pineapples (the kind that soldiers pull the pin on and they explode).  The federal government employs 2.3 million civilian workers, which accounts for 1.7 percent of the U.S. workforce.  These employees work in over 700 occupational categories.  In the last fiscal year (2011), the government spent about $200 billion on their compensation.

Just the numbers alone would seem to make comparison almost meaningless.  The government work environment, and that in the private sector, are vastly different.  There are also differences in education and experience.  Government workers tend to be older, more educated, and concentrated more in professional occupations than those in the private sector.  Thirty-three percent of federal workers are in professional occupations, for instance, as compared to 18 percent in the private sector.  At the lower end of the scale, 26 percent of private sectors work in occupations like retail sales, production, or construction, compared to seven percent of federal employees.

So, while the feds are paying more, one has to look at the demographic breakdown to see if this means anything other than providing fodder for political rhetoric.

What are the Real Statistics?

Federal workers with no more than a high school education earn about 21 percent more, on average, than similar workers in the private sector.  Keep in mind, however, these workers are only seven percent of the federal work force.

Workers with at most a bachelor's degree in the federal force, earn roughly the same as their private sector counterparts on an hourly basis.

Federal workers with a professional or doctorate degree earned about 23 percent less, on average, than private sector counterparts.

There is an apparent difference in the cost of benefits between the public and private sectors, so things like health insurance, retirement benefits, and paid vacations were considered by CBO in coming to its conclusion.  According to the report, federal employees with no more than a high school education get 72 percent more in benefits than comparable private sector workers, while those with just a bachelor's degree get 46 percent more.  Those with advanced degrees, though, get roughly the same in both federal and private-sector jobs.  The CBO then concluded that government costs for hourly benefits is 48 percent higher than the private sector.

What Does it All Mean?

At this point, you're probably asking, WTF?  What does it all mean, anyway?  As I said at the start, unless you're a statistician or economist, probably not a whole lot.  If, though, you're someone who has had experience with the way our system works, what it means is that during this, an election year, the government bashers will use this report to mount further attacks on the federal work force.  Not that the force couldn't use the occasional refit and upgrade, but to use confusing statistics and this kind of 'apples and oranges' comparison to do it isn't actually playing fair.

How, for instance, do you compare the pay and benefits of a forklift operator in the stock room of a department store with one who is moving spent rods in a nuclear plant?  Should their pay and benefits be the same just because they have the same educational level and job title?  Mentioned almost in passing in the report is the fact that defined benefits plans for federal workers contribute greatly to the difference in cost of benefits, and these kinds of 'protected' retirements are increasingly rare in the private sector.  So, is the answer for the government to screw its employees like many private sector companies are doing?  I would hope not.  Think of the impact of a disgruntled, demoralized meat inspector, or air traffic controller.  A lot worse than a hacked off stock boy at the local department store, for sure.

There's an old saying that 'figures don't lie, but liars do figure.'  I'm not accusing the CBO of being dishonest in its report.  There are, sprinkled throughout, enough caveats that anyone with the patience to go through the whole thing should know that it is at best 'inconclusive.'  But, politicians have never let something like this stand in the way of their campaigns, and that, my friends is what worries me.

After federal workers, who is the next target?