Thursday, February 2, 2012

Comparing Private to Public Sector Compensation ... It's a Disgrace

The federal government's Congressional Budget Office (CBO) just issued a report comparing the pay and benefits of private and public sector workers for similar work.

Total compensation (the sum of wages and benefits) for those with a high school education is 36% higher for government workers. For those with an undergraduate college degree, the total compensation for government workers is 15% more than for their private sector counterparts.

Regarding benefits alone, the CBO report says this, "On average the benefits earned by federal civil employees cost 48% more than the benefits earned by private-sector employees with certain similar observable characteristics."

So on average a private sector employee works, pay taxes and thereby pays for the wages and benefits of his public sector counterpart by providing the public employee with significantly higher pay and 48% greater benefits than he himself receives.

There's something quite revealing and terribly wrong about this disgraceful situation. Public sector unions and politicians must be held accountable by taxpayers or we'll have only ourselves to blame. No doubt about it.

Please click below to access the CBO summary and full report. Here's a brief overview.

"Private vs. Federal Workers: The Congressional Budget Office compares the compensation of federal and private-sector workers. “Differences in wages between federal employees and similar private-sector employees in the 2005-2010 period varied widely depending on the employees’ level of education. Federal civilian workers with no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector. Workers whose highest level of education was a bachelor’s degree earned roughly the same hourly wages, on average, in both the federal government and the private sector. Federal workers with a professional degree or doctorate earned about 23 percent less, on average, than their private-sector counterparts. Overall, the federal government paid 2 percent more in total wages than it would have if average wages had been comparable with those in the private sector, after accounting for certain observable characteristics of workers. The cost of providing benefits — including health insurance, retirement benefits, and paid vacation — differed more for federal and private-sector employees than wages did, but measuring benefits was also more uncertain.”

Here's my takeaway.

The bigger the government becomes, and the more the best interests of taxpayers continue to be ignored, the worse off we'll all be.

The more taxes we pay and/or the more money the government borrows, the bigger the government becomes.

Government doesn't know best.

And it certainly doesn't know what's "fair."

Thanks. Bob.

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