November 11, 2010

USAT Report on Highly-Paid Federal Employees Makes Key Points, Misses Several Others

Filed under: Economy,MSM Biz/Other Ignorance,Taxes & Government — Tom @ 12:17 pm

money-tree

Before critiquing, I should recognize that USA Today, while most of the establishment press has snoozed, has done a very creditable job of exposing the wide differential between federal employee and private-sector pay (Aug. 10, 2010; “Federal workers earning double their private counterparts”), and of identifying the outrageous degree by which salaries in the upper levels of Uncle Sam’s empire are expanding (Dec. 11, 2009; “For feds, more get 6-figure salaries”).

Yesterday, in a mostly well-done report, USAT’s Dennis Cauchon, who also authored the two linked items in the previous paragraph, delved into many of the details concerning the growing number of federal employees who get paid $150,000 or more per year. Among his more important points is the fact that a great deal of the expansion into this high level of pay has occurred since President Obama took office, during a period when overall inflation has been very low:

More federal workers’ pay tops $150,000

The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis finds.

… Federal salaries have grown robustly in recent years, according to a USA TODAY analysis of Office of Personnel Management data. Key findings:

Government-wide raises. Top-paid staff have increased in every department and agency. The Defense Department had nine civilians earning $170,000 or more in 2005, 214 when Obama took office and 994 in June.
Long-time workers thrive. The biggest pay hikes have gone to employees who have been with the government for 15 to 24 years. Since 2005, average salaries for this group climbed 25% compared with a 9% inflation rate.
Physicians rewarded. Medical doctors at veterans hospitals, prisons and elsewhere earn an average of $179,500, up from $111,000 in 2005.

Federal workers earning $150,000 or more make up 3.9% of the workforce, up from 0.4% in 2005.

Since 2000, federal pay and benefits have increased 3% annually above inflation compared with 0.8% for private workers, according to the Bureau of Economic Analysis. Members of Congress earn $174,000, up from $141,300 in 2000, an increase below the rate of inflation.

Jessica Klement, government affairs director at the Federal Managers Association, says the government’s official pay analysis shows that federal workers earn less than private workers for comparable jobs. Still, she says, managers are willing to give up next year’s (Obama-proposed 1.4%) raise: “If it will help the country bounce back, they’re willing to make the sacrifice.”

Well, that’s mighty nice of Ms. Klement, but she, and Cauchon, overlooked a few key points:

  • The first is that even if there is no officially declared pay raise this year, most federal employees will earn — excuse me, “get paid” — more next year. That’s because federal employees also typically receive seniority-based pay hikes known as “step increases.” These typically average about 1.5%. Cauchon made this point in his December 2009 report; he should also have done so in this one.
  • I haven’t seen the “official pay analysis” for “comparable jobs” to which Ms. Klement refers. But I’d like to see the study telling me that “comparable” doctors have seen their earnings climb by 62% ($179,500 divided by $111,000) in the past five years.
  • Again regarding the “pay analysis,” I’d like to see the reports documenting which “comparable jobs” in the private sector have 5-year track records of pay increases of triple the overall rate of inflation. I will suggest that this has occurred somewhere between rarely and never in “comparable” private-sector occupations.
  • A comparison of salaries is fine, but a complete picture would have to consider the entire compensation and benefits package, which is far more generous in the government than what is found in the private sector. Cauchon did look at benefits in his August report on federal vs. private pay on the whole, and found that federal civilian benefits average $41,791, compared to $10,589 in the private sector.

There are several comparative points I’m leaving on the table, including but not limited to relative job-loss risk and number of hours worked.

Burgeoning federal pay is a key explanation as to why federal spending is out of control, and continues to be. USAT’s Cauchon did a good job of documenting his basic findings, but needed to get to the items I noted to give his readers the necessary overall understanding of the just how outrageous and dangerous the situation really is.

Cross-posted at NewsBusters.org.

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11 Comments

  1. you’ve beaten on this horse many times now, as have others, but I have yet to see a substantive breakdown of who or what agencies have employees making all this money and what they do for it. That would be much more helpful to diagnosing a problem than the generalities you have here. I’m a fed but I’m not among those making 100k/yr. However, where I work (US Patent & Trademark Office), those who do make >100k/yr are WORTH IT and there is no comparable private sector equivalent to what we do. Thus I know my agency isn’t part of any such problem but, until we know who’s making such money and what agencies they work at, we don’t really know what the problem is.

    Also, I read your blog and others to get the news I can’t get in the newspapers anymore but I don’t have time to follow all of your links and analyze the pdf files you take data from. You do a better job than most other blogs in publishing data with your posts that back up your points and I’d appreciate it if you could do that sometime with this issue too, just so I can see the problem you claim is there. If you’re saying the problem is simply that too many feds make >100k/yr, that isn’t a problem that has a palpable solution. Find the agencies that are bloated with these people and expose the fiscal dangers involved. This is the political atmosphere where such a thing will gain traction.

    deskbox

    Comment by deskbox — November 11, 2010 @ 8:46 pm

  2. #1 deskmouse, believe me there are lots of things on which I wish I could spend more time. This is one of them. Cauchon is basically doing fine on his own, so I don’t mind delegating. :–>

    That said, there is something amiss when federal workers as a whole are getting pay raises that are triple what inflation is.

    Heritage did a study that controlled for variables such as different types of jobs, etc. and still found that the pay differential for comparable occupations was 20% — and I believe that was before considering benefits.

    Comment by TBlumer — November 11, 2010 @ 11:01 pm

  3. #2 dumbass – so the problem is feds getting raises that are triple the rate of inflation? so get some data on that showing who’s getting the raises in what fed agency and publish it. then we’ll know what the problem is.

    deskbox

    Comment by deskbox — November 12, 2010 @ 1:25 am

  4. #3, gosh, your reax is harsh and uncalled for.

    The article ITSELF says that docs have gone from an average of $111k to $179.5K since 2005. That would be across all agencies that use docs (prisons, vet hospitals, etc.).

    But more to the point, it’s a self-evidently pervasive problem: “Since 2000, federal pay and benefits have increased 3% annually above inflation compared with 0.8% for private workers, according to the Bureau of Economic Analysis.” IOW, with across the board numbers like that, I could probably throw a dart at any given agency and find “the problem” — which would appear to be that the pay and raise formulas are rigged to get outsized results.

    Comment by TBlumer — November 12, 2010 @ 6:52 am

  5. next time call someone by their name and you won’t get the harsh reax. don’t pretend you know me and don’t pretend I’ll magically know you’re kidding if you are. this is only the second time I’ve commented here and it annoyed me based on seeing it so much on other blogs. my apologies for being too harsh though.

    your point about docs is weak. what kind of docs? research physicians? internal medicine? neurosurgeons/brain injury specialists? if so then they might be underpaid at even those rates and only the federal benefits keep them from going into the more lucrative private sector. it’s these generalizations like your docs point that give me, as a conservative, little to get angry about. however, do a post on 1500 clerks at OSHA making $130k/yr and I’ll hit the roof. do you remember the outcry over the $765k/yr the city manager in Bell, CA was making?

    As for your comment on step increases, take your pick between COLAs and step increases as to which one you make comparable to private sector raises. I’d say the majority of feds don’t get step increases every year (usually every 2 or 3 years) so the COLAs are it, so the equivalency with the private sector is there. I’m earning my pay increase as much as you’re earning yours but I’m happy getting one and not the other.

    Also, Obama doesn’t care about feds’ salaries so $1.4% is probably the most we’ll get for a COLA while he’s in office. It’s the pensions that make us dependent on the government for life. That’s where the power is.

    deskbox

    Comment by deskbox — November 12, 2010 @ 9:02 pm

  6. Seriously deskbox, I am very, very sorry about responding with your incorrect name, and I didn’t even catch it after your response. Please believe me when I say that these were errors between the fatigued operator (me) and the keyboard.

    My point about the docs isn’t necessarily that they are overpaid (though it seems likely) — it’s that they have received an average increase of 63% in five years. There may be mitigating factors (e.g., few new hires, staff on board progressing through steps, and maybe a change in the skill mix), but I don’t see how it would reduce the 63% by that much. You also have work week and business risk issues that those in the private sector have to face which govt. docs don’t need to worry about.

    As to “steps,” we’re both right:
    http://www.jobsfed.com/bene2.htm

    Each pay category is identified by a grade 1 through 15 and within each grade are ten steps. Based on performance and time in grade, employees are eligible to go up steps within their grades. After one year (52 weeks) you can go from Step 1 to Step 2, 3 and then to Step 4. For Steps 5,6, and 7, it takes 2 years (104 weeks); after 3 years (156 weeks) you can go to Step 8, 9, and 10. You top out at Step 10 and try for the next higher grade.

    So it happens every year, every other year, or every third year.

    The fact that pay raises have been triple that of inflation for federal employees in general, along with the finding that the increases are far beyond the levels seen in the private sector, are still out there, pretty much as established facts.

    Comment by TBlumer — November 12, 2010 @ 9:20 pm

  7. [...] This post was mentioned on Twitter by Tom_Blumer, 44214. 44214 said: USAT Report on Highly-Paid Federal Employees Makes Key Points, Misses Several Others http://bit.ly/bllzXP via http://outside.in/44214 [...]

    Pingback by Tweets that mention BizzyBlog -- Topsy.com — November 13, 2010 @ 4:37 am

  8. no problem, it’s already forgotten.

    as for salary increases for docs, I’d add that more emphasis in the media and in the political arena on soldiers’ care (wars going on, more injured soldiers needing care, focus on technology, etc) has also led to higher visibility for government doctors and VA/DoD care efforts overall, so the salary increases to retain the best doctors so quality stays high (or just have that appearance of retaining the best) has become more important. Strange to say but the recent ramp-up is market-driven in that way. Regarding your docs point above, I’m still curious about what specialty areas these doctors practice in and I’m also curious about comparable salary movements for these specialties in the private sector. I know of several private hospitals that pay some doctors >500k/yr and some specialties may have seen similar salary jumps in the private sector too. Thus I don’t get worked up about fed doctors making $179k/yr without something egregious being connected to it.

    Again, show me fed salaries for clerks or lawn mowers rising 63% since 2005 and I’ll say there’s a problem.

    As for employment risk, I agree that some agencies have none thanks to their union but, in my agency (I’m a patent examiner), if I don’t do my job I will get fired. I know that this accountability is not universal among all federal agencies so your point is well-taken. I don’t understand what you mean by a work week issue though. I suspect the same accountability feature at the Patent Office applies though.

    As for the step increases, I repeat my earlier remark about us not needing both them and COLAs. If the federal government had some other plan for rewarding employees for tenure and proficiency (a la promotions, stock options, bonuses etc as seen in the private sector), we wouldn’t need them.

    deskbox

    Comment by deskbox — November 13, 2010 @ 11:00 pm

  9. Your point about getting docs with more specialized/advanced capabilities is a good one to raise.

    There is an NB comment about accountability that is pretty sad:
    HERE

    The work week issue was tied to docs (and maybe lawyers). My premise is that esp docs, esp those in their own practice or part of one, tend to work longer work weeks in the private sector vs. the public sector, and I suspect that when the “comparability” studies are done, that point isn’t considered.

    I don’t have an immediate comeback on the pay of clericals, etc., but I suspect it’s out there somewhere. The overall stat in the USAT article (“Since 2000, federal pay and benefits have increased 3% annually above inflation compared with 0.8% for private workers, according to the Bureau of Economic Analysis”) would indicate that the raises folks have been getting for the past decade have far exceeded the private sector. 10 years of that would seem to almost automatically lead to an imbalance. Yes, I realize that outsourcing some lower-end functions skews that a bit, but I don’t see how it erases a differential of almost 4 to 1.

    Comment by TBlumer — November 14, 2010 @ 6:55 am

  10. trak65′s comment is a good one and, without repeating what I’ve said above about my own agency, I think a majority of fed agencies have that problem. I see that in the private sector in places with unions too (I once watched 9 utility workers from PEPCO outside my window taking turns digging a small hole for 3 hours) so I don’t think that’s primarily a private sector vs. public sector issue. Is the federal government too big? Yes. Are the unions the problem? No, but they are a big problem and unions have lots of support. Is employee laziness or immunity from termination a problem? Yes. I think specifics like my clerks example will get more traction (i.e. cause more outrage) with people though. Think of what can piss off a lot of people in 5 seconds. Doctors’ salaries going up 63% in 5 years won’t do that. Doctors are supposed to make a lot of money.

    deskbox

    Comment by deskbox — November 15, 2010 @ 9:26 pm

  11. #10, You wrong on two counts. Of course you’re going to defend your salary but when you defend the whole situation I call foul.

    Your anecdote aside, as problematic as unions in the private sector can be, it’s nowhere close. You can talk about seeing the digging of a small hole for 3 hours all you want, but I can cite many more instances where I have witnessed private sector union workers working their a@@ess of. I can cite much more examples of public sector union workers wasting time and being rude than I ever could private sector workers.

    But since anecdotes aren’t solid evidence let’s look at the figures: the VAST majority of unions (something like over 80%) are in the PUBLIC SECTOR, *not* private. Public sector wages and benefits are way above the private norm and what is warranted. Yet the numbers show again and again that the private sector union workers are still vastly more productive than their public counterparts. So don’t tell me that it’s not primarily a public sector vs. private sector issue and that unions are not the problem. You are wrong, sir.

    Second, your doctor argument is specious. I don’t care if doctors are supposed to be highly paid, that is not issue. The issue is doctors in the public sector being payed higher than those in private, on the taxpayers dime, and all the while not being as productive and effective as a private doctor and while also working less. You don’t think the public has a problem with that? C’mon. I hope you never become a doctor. You’ll charge me a billion dollars for a visit and justify it because doctors are supposed to get high pay. If public sector doctors are being overpaid, who cares that in general doctor pay is supposed to be higher than say, a mail carrier. An unjustified increase is an unjustified increase, no matter under what income bracket it occurs under. Cars are supposed to be more expensive than bikes, but would you find that an acceptable defense if bike prices stayed lower but dealers jacked the prices so that cars suddenly cost $450,000 to buy?

    Comment by zf — November 16, 2010 @ 7:33 pm

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