In the wake of CBO’s recent report finding that federal employees are overcompensated by an average of 16 percent, public employee unions and members of Congress who support them had two main reactions.
First, they say, the Bureau of Labor Statistics—not the CBO—are the real experts on pay. Second, they argue, pay studies should compare jobs, not the education or experience of the people who fill those jobs. Well, they’ve got what they want.
The Journal of Economic Perspectives yesterday published a new study by Brooks Pierce and Maury Gittleman of the Bureau of Labor Statistics which uses BLS estimates of the skills required in different occupations to compare public and private sector pay.
Brooks and Gittleman restrict their analysis to state and local government employees, but their findings are striking: state government workers receive salaries about even with private sector levels, while local government workers receive salaries around 9 percent above private sector levels. Once you include benefits, state employees are overpaid by around 9 percent and local government workers by around 18 percent. Moreover, there’s good reason to believe these estimates are conservative, since they exclude the value of retiree health coverage for public employees and understate the true value of defined benefit pensions.
You can’t say for sure what this implies for federal government employee pay, but they’re generally regarded as better paid than state and local government workers.