Government Workers Overpaid

Bureaucrats Irked: Heritage Foundation Finds They Are Paid Too Much

In an interview with the Washington Post, the Director of the Office of Personnel Management, John Berry, directly credits The Heritage Foundation as having moved public opinion on the issue of overpayment of federal officials:

He said he was frustrated that “the Heritage and Cato misinformation campaign has obviously gained traction.” The two Washington, D.C., think tanks have produced widely discussed reports indicating that federal workers are paid too much. A “pretty prolonged misinformation campaign over the last six month leading up to this,” [Berry] said, “has worked.”

Berry was steaming over that last point.

The Heritage Foundation has been at the forefront of the overpayment issue. Heritage research has found that the average federal employee earns an annual salary almost 60% higher than the average private-sector employee — $79,000 vs. $50,000. Even after controlling for education and experience, federal employees get paid significantly better — 22% more per hour, on average — than private-sector workers. Once you add up the benefits, the gap in total compensation rises even higher — 30% to 40% above comparable private-sector workers.

But defenders of the federal pay system, including the OPM, have mischaracterized our analyses by suggesting they ignore skill differences between the public and private sectors, resulting in an “apples to oranges” comparison. On the contrary, Heritage has carefully accounted for skill differences, always comparing apples to apples.

In a letter the Washington Post this week, Heritage economist Bill Beach directly addresses those critical of our analysis:

Ignoring this evidence [of standard practice in calibrating data], government and union representatives quoted in your column attack our findings by relying on a survey that examines job descriptions. But federal workers tend to be less skilled within an occupation level - a senior accountant may qualify only as a junior accountant in the private sector. So economists look at skills and experience, not just official duties.