Yesterday as I was leaving the hotel I was staying in while training in Boston this week; I picked up a complementary copy of USA Today.  An article by Dennis Cauchon on the front page piqued my attention and I had meant to address it yesterday.

The headline read, “Federal pay ahead of private industry.”  I had to reread that headline a couple of times to be sure I didn’t misread it.  Cauchon reporting on data released by the Bureau of Labor Statistics wrote:

Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

Now it is possible that things have changed in 2009, but with the recession and stimulus package that did pretty much nothing but bolster government employment I would wager that the disparity gap has grown.

While the base salary disparity is bad enough the real kicker is in fringe benefits, the article continued:

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.

That is outrageous since it is being provided by taxpayers.  The story was slightly different with state and local government workers:

State government employees had an average salary of $47,231 in 2008, about 5% less than comparable jobs in the private sector. City and county workers earned an average of $43,589, about 2% more than private workers in similar jobs. State and local workers have higher total compensation than private workers when the value of benefits is included.

We have seen this disparity locally when The Des Moines Register reported that the Des Moines mayor and city council members’ health insurance costs taxpayers $80,000.  They are part-time:

Des Moines’ seven part-time City Council members receive discounts for their health insurance premiums, paying $420 annually for family coverage that costs more than $13,000.

One elected official said the mayor and council should set an example and pay more for their insurance, a benefit that costs taxpayers about $80,000 a year.

Most on the seven-member council say they will consider paying more out-of-pocket for their insurance, particularly since other city employees have been asked to do the same.

I wonder why part-timers are getting insurance offered at all?  Does that happen anywhere in the private sector?

Not that I’m aware of.

These are examples of how government budgets from the local level to the federal level have ballooned.  But instead of making a better business environment at the federal or at the state level here in Iowa budgets are ballooned.  Millions in taxpayer money is spent to create save mostly government jobs while the private sector which is the engine of our economy suffers.

I guess why should we be surprised by this when yesterday Senate Majority Leader Harry Reid called yesterday a good day for the American private sector.  Only 36,000 lost their jobs.

6 comments
  1. I want to say that the company (engineering firm) I work for does offer insurance to part timers … at least they did a couple years ago when I was looking into it. So it does happen. At that time, it was the same coverage/copay as full time employees, however the premiums were roughly doubled what full timers paid. It certainly wasn’t cheaper. I hope the city council *strongly* considers paying more – to lead by example!

    1. @Maureen L, I don’t mean to suggest that company’s that do that are wrong, actually more power to them! It’s their money to decide to offer that to their employees.

      The City Council members, to my knowledge, have full-time jobs (at least most do) in addition to serving on the Council (they also earn $21,000 a year and the mayor makes $31,000). I’d say that offering health insurance is over the top in their case.

  2. You neglected the grossly immoral compensation packages of executives in the private industry. There’s nothing like that in government I think that more than makes up for the almost insignificant ($7K/year) disparity in average wages. And not offering health insurance is not something of which an ethical person would be proud.

  3. The pensions have definitely gotten out of hand but the really unfortunate thing is how out of touch most of the public employees really are. I mean in my experience they still think private sector employees earn more then they do and when you bring up their pensions they always point to the few CEO’s getting huge bonuses like we all have ’em…

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