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Government pay versus Private Sector


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2013 Apr 15, 2:36am   3,460 views  21 comments

by CL   ➕follow (1)   💰tip   ignore  

I thought it was relatively widely accepted that Government pay was usually lower than the private sector but that the trade-off was stability. They also tend to receive good benefits, perhaps better than their private sector counterparts.

However, I recently discovered that many on the right believe that the Government pays better in addition to their myriad benefits.

Is there any hard data or otherwise convincing information to prove this one way or the other?

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1   zzyzzx   2013 Apr 15, 2:49am  

CL says

I thought it was relatively widely accepted that Government pay was usually lower than the private sector but that the trade-off was stability. They also tend to receive good benefits, perhaps better than their private sector counterparts.

Government pay has been better for quite some time, meaning more than 10 years by now. Get with the times.

2   zzyzzx   2013 Apr 15, 2:50am  

IDDQD says

http://usatoday30.usatoday.com/news/nation/2010-03-04-federal-pay_N.htm

These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.

3   Goran_K   2013 Apr 15, 3:45am  

CalPers alone destroys any private sector retirement plan based on compensation. Of course, CalPers needs to gut local municipal treasuries to the bone, and bankrupt entire regions to survive, but if you're on the profit end of that type of criminal venture, there's very little to complain about.

4   CL   2013 Apr 15, 5:02am  

For every article that says it's better to be on the Government payroll, I see another that says it's not:

http://www.federalnewsradio.com/520/3085581/Pay-gap-between-government-private-sector-widens-to-34-percent

It's not fair to compare a "doctor" to a researcher at NIH, etc. So, I reckon figures lie and liars figure.

Hence my call for hard data. Is there any metric to gauge these in an unbiased way, like so many do with FRED data?

5   Tenpoundbass   2013 Apr 16, 12:22am  

New Rules!

We can't get out of our economic funk, by pointing fingers at other people and looking in their wallet. I mean what someone else makes is not a bad thing. If you are having problems making ends meet, then "What you make" is your problem.
I would like someone to explain to me, how harassing everyone over what they make, and creating witch hunts to get this group of people's pay cut, benefits anyone, who doesn't make enough money to make ends meet.
If anything, those fools are only sealing their fate, and condemning them selves to a life of destitution, with no chance of ever getting ahead.

What will happen, these whining entitled little shits, are going to grow up one day, and try to put on the big pants, and get ahead and just do what was always natural for a maturing American, who finally got their shit together as they get older. When these people realize the problem isn't what everyone else makes, it's what they make. Or more importantly, how little they put into something, and are disappointing with the return. There wont be any rungs on the ladder to get ahead.

We should raise the voting age to 30, young and dumb voters are a dangerous thing, coupled with social media.

6   david1   2013 Apr 16, 12:55am  

CaptainShuddup says

We should raise the voting age to 30, young and dumb voters are a dangerous
thing, coupled with social media.

And cap the voting age at 65, as old and senile voters are equally dangerous.

Funny how, by and large, voters tend to vote for the person who they believe will most likely benefit them.

This is not the problem - the problem is voters who misunderstand who will most benefit them.

7   finehoe   2013 Apr 16, 1:09am  

Only in CATO studies, and even they hedge.

Chris Edwards, director of tax policy studies at the Cato Institute, a conservative think thank, and author of several papers concluding that federal workers are overpaid, acknowledged Monday that “it’s hard to make an overall sweeping assessment” of whether private- or public-sector employees make more.

Most objective studies have determined "Various studies have used different methods and data in reaching opposing conclusions about how federal and non-federal pay compare, but no one approach is definitive."

http://articles.washingtonpost.com/2012-07-23/politics/35487789_1_federal-workers-federal-employees-studies

8   chemechie   2013 Apr 16, 1:16am  

It is impossible to come up with a single metric that can accurately compare the pay of millions of workers of different ages and experiences working in thousands of job categories spread across thousands of localities - any survey or estimate will have to make so many approximations and estimates as to make any conclusion useless.
Having said that, the extremely general rule I have seen working in the government before is that low paying/ low skilled jobs pay more in government than outside (secretaries, janitors, guards, clerks, etc), and that higher paying/ higher educated jobs (doctors, lawyers, engineers, scientists, etc) have lower pay in the government than outside.
Just my 2 cents ...

9   finehoe   2013 Apr 16, 1:23am  

chemechie says

the extremely general rule I have seen working in the government before is that low paying/ low skilled jobs pay more in government than outside (secretaries, janitors, guards, clerks, etc), and that higher paying/ higher educated jobs (doctors, lawyers, engineers, scientists, etc) have lower pay in the government than outside.

I would agree that is a valid observation.

10   FuckTheMainstreamMedia   2013 Apr 16, 1:23am  

CL says

For every article that says it's better to be on the Government payroll, I see another that says it's not:

http://www.federalnewsradio.com/520/3085581/Pay-gap-between-government-private-sector-widens-to-34-percent

It's not fair to compare a "doctor" to a researcher at NIH, etc. So, I reckon figures lie and liars figure.

Hence my call for hard data. Is there any metric to gauge these in an unbiased way, like so many do with FRED data?

Here ya go. Do a search on pay from top to bottom. You won't get through the six figure pay though I don't think.

http://lang.dailynews.com/socal/citypayroll/?appSession=28544341079431&RecordID=&PageID=2&PrevPageID=2&cpipage=1&CPIsortType=asc&CPIorderby=Current_Annual_Base_Pay_21

11   finehoe   2013 Apr 16, 1:33am  

dodgerfanjohn says

Here ya go.

How does this tell us anything? Listing salaries of some group is proof of nothing.

12   leo707   2013 Apr 16, 4:59am  

finehoe says

dodgerfanjohn says

Here ya go.

How does this tell us anything? Listing salaries of some group is proof of nothing.

Yep, it is nothing if it does not have a comparison.

A lot of the titles just don't exist in the private sector, or are hard to find an equivilant, I grabbed a few with titles that would be easy to find on salary.com:

OFFICE OF FINANCE - DIR OF FINANCE - CHRISTOVALE,ANTOINETTE DENISE $197,420.40
Median for a Finance Director on salary.com: $217,785
http://swz.salary.com/SalaryWizard/Finance-Director-Salary-Details-Los-Angeles-CA.aspx

PERSONNEL - MEDICAL DIRECTOR - STALEY,JOTHAN $181,614.24
Median for a Medical Director on salary.com: $242,000
http://swz.salary.com/SalaryWizard/Medical-Director-Salary-Details-Los-Angeles-CA.aspx

Anecdotally, my wife periodically looks at moving from the private to the public sector for work and the move for her almost always would be a push when it comes to pay.

13   EBGuy   2013 Apr 16, 5:29am  

Pensions, pensions, pensions. That is where one of the real public sector benefits lies. Even there it's a set of tradeoffs. If you die young after retirement there is no pot o' gold to pass onto the kids. But because of the 'pooled interests' in a pension plan, if you outlive your peers you're still covered by the pension payout. State of California pensions seem pretty generous; not sure about what they look at the fed level -- though I recently met someone who used to work for the IRS and does a lot of traveling. Retirement still seems like a far off dream...

14   curious2   2013 Apr 16, 8:50am  

CityData.com has many economic data sets, and I remember a table comparing median SF public sector wages to median private sector, with public being significantly higher; I can't find it now but I can find tables showing average government wage exceeds median family income (and there are many two-income families):

http://www.city-data.com/city/San-Francisco-California.html

One issue is comparing apples to apples. Public sector workers tend to say that if you compare people in jobs that require particular degrees, private sector is higher; that's doubtful because it excludes pensions and besides many people with those degrees are underemployed so the market value of those degrees may be lower. Elected officials may reward campaign volunteers with staff jobs that would otherwise be above their pay grade, etc. A trade-off is that staff workers may be more vulnerable to the office politics and headgames of internal fiefdoms, compared to line workers and rain makers; a fascinating British study showed a strong correlation between civil service rank and longevity, with department heads outliving lower ranked civil servants by a significant margin, apparently because of stress levels with the lower ranks facing much more stress than the department heads.

Another issue is the defined benefit pensions, which in California can be huge. Pension spiking is common, and can add up to six figures even for people with only HS education. SF used to offer lifetime medical insurance to employees who worked five years, which may turn out to be huge because of Obamacare. The rules have changed since, so new hires don't get that, but IIRC under the old rule someone who quit at 23 would be entitled to a lifetime of Obamacare paid by SF, which at average premium projections might cost $1 million.

With defined benefit plans disappearing from the private sector, and the possibility of new technology enabling most people to live much longer (way past 100), the public sector pensions may turn out to be an enormous windfall for people vested under the old rules. Some public sector pensions are at least partially indexed to inflation, so even if Bubbles Ben continues printing up a storm, the cost of those pensions will inflate along with CPI, thus wiping out private sector fixed income pensioners while protecting public sector pensioners who have the COLA index.

As with much of the economy though, new workers come in under new rules with lower wages. Cities can't afford to hire enough police under their current contract requirements, even though there are plenty of qualified applicants, so they talk about hiring a 'junior' category at lower wages with fewer benefits. The pattern is to protect incumbent constituencies by widening the gap between the incumbents and the new recruits, creating a stealth deflation in wages.

But landlords need never fear: Bubbles Ben and his buddy Barack will keep propping up the price of housing, which they call "helping homeowners," so even if new employees' wages can't support current prices, younger workers will be reduced to subletting rooms or living in their parents' basements instead of prices falling to market levels. TBTF banks will continue to be propped up with ZIRP (while charging young people double-digit interest on credit cards) so zombie banks can keep zombie inventory empty instead of flooding the market and reducing prices, at least until the zombie apocalypse for which government preparations are already underway.

15   FuckTheMainstreamMedia   2013 Apr 16, 11:22am  

Holy crap!

Pat, can you just ban anyone refusing to take their meds? You can start with Dan and this^^^^ clown.

16   curious2   2013 Apr 16, 11:30am  

dodgerfanjohn says

this^^^^ clown.

dodgerfanjohn says

who let the monkeys outta their cages today?

Presumably, DGF is referring to himself, in frustration that any post longer than a couple of sentences is more than his reading comprehension can handle and he gets confused.

17   thomaswong.1986   2013 Apr 16, 11:44am  

CL says

I thought it was relatively widely accepted that Government pay was usually lower than the private sector but that the trade-off was stability.

govt is virtually a monopoly. a govt entity is at no risk of losing its customers. therefore the govt positions will continue to be needed. and their future stream of revenues that fuel projects and employee pay it virtually uninterrupted.

on the other hand any and all private sector entity and their employee are at risk of losing their jobs/incomes at anyone time due to any foreseeable or unforeseeable events. no guarantees exist.

pension and other benefit also favor public-govt sector workers.

since 2000, the imbalance caused by higher demand in pay by govt workers has created far more imbalance than in any prior decades... welcome to the new 1%.

18   CL   2013 Apr 18, 3:32am  

So why don't people in the private sector clamor to get jobs in the awesome public sector?

Be a Public Servant! Buy a yacht! World Tour! Rolls Royce!

19   curious2   2013 Apr 18, 3:42am  

CL says

So why don't people in the private sector clamor to get jobs in the awesome public sector?

Be a Public Servant! Buy a yacht! World Tour! Rolls Royce!

Some people do, for example Newt Gingrich with his notorious Tiffany's bill. (A gluttonous hypocrite has to keep his third wife happy in their "open marriage" somehow.) The Bushes and Clintons have profited famously from their time in the public sector, but they are hardly alone, as reports of California civil servants retiring with lifetime pensions over $100k/yr have become routine.

Most people don't though, and the reason has to do with Garrison Keillor's Lake Wobegon, where all the children are above average. Michael Moore has presented this well too. Most Americans believe in the Horatio Alger stories, and Republicans in particular have exploited that belief to sell tax cuts for the rich, because even roofers imagine that if they apply themselves they'll strike it rich someday. You can show young adults any number of statistics saying that borrowing $ to get an advanced degree in an uneconomic field is probably going to make them poorer, but they'll assume that they're special and they're going to be among the few for whom it works out perfectly. It's confirmation bias, and the inability of the pre-human brain to understand aggregate statistics based on large numbers: tell an eager 18yo an anecdote about JK Rowling and Tom Clancy and John Grisham and their vast fortunes, and then tell her some impersonal statistics about how most English majors don't make much money with those degrees, and she'll conclude that her ideas are special and she'll be the next JK Rowling rather than the next Mrs. Krabappel.

20   zzyzzx   2013 Apr 18, 3:53am  

CL says

So why don't people in the private sector clamor to get jobs in the awesome public sector?

Because the public sector jobs are so good that nobody ever quits, or gets fired. That's makes them really hard to get since job openings are scarce.

21   CL   2013 Apr 18, 4:06am  

zzyzzx says

CL says

So why don't people in the private sector clamor to get jobs in the awesome public sector?

Because the public sector jobs are so good that nobody ever quits, or gets fired. That's makes them really hard to get since job openings are scarce.

According to the rightwing, Government just grows and grows, is inefficient, countless holidays and so on. So, there should be ample opportunities every year!curious2 says

The Bushes and Clintons have profited famously from their time in the public sector,

Mostly, post-career profiting. This is more like "I could be President of America or CEO of a company"....

"I could be Chief of Police or mid-level Manager"

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