Lawmakers Debate Fairness of Federal Workers' Paychecks

Lawmakers and economic analysts spent Wednesday afternoon debating whether or not millions of federal workers are receiving fair wage and benefits compensation.

Rep. Dennis Ross, R-Fla., who chairs the House Subcommittee on the Federal Workforce, kicked off the Capitol Hill hearing by citing statistics showing that federal employees average "nearly four times more than the average private sector worker."

Behind Ross hung a sign noting that in recent months 8,817,000 private sector jobs have been lost at the same time that 157,000 federal jobs have been added.

"We need to be careful not to get caught up in overly-simplistic data comparisons between private sector and federal jobs," cautioned Ranking Member Rep. Stephen Lynch, D-Mass., noting that federal workers are dealing with a two-year pay freeze, announced by President Obama last November.

"President Obama's pay freeze wasn't really a freeze," Ross countered. "[The freeze] did not impact salary increases driven primarily by the passage of time or bonuses."

According to a comparison of 2008 data from the Bureau of Labor Statistics done by USA Today, the spread between the federal worker and his or her private counterpart is significant.

On average, the full compensation deal for a federal worker totals $108,476, while the average in the private sector equals $69,928.

Lawmakers heard from various expert witnesses who were divided about what the raw data says about federal pay packages.

John Berry, Director of the U.S. Office of Personnel Management, testified that there are important differences in skills and assignments between public and private sector jobs - making them "not necessarily comparable." He called on lawmakers to "reject misleading uses of data that perpetuate the myth that federal employees are as a whole overcompensated."

James Sherk, a labor economics analyst with the Heritage Foundation, testified that his research shows that the average federal employee earns hourly wages "57 percent above average private-sector wages."

While Sherk acknowledged that federal workers often have different skill sets and experience, he testified that - based on statistical techniques that account for the differences - federal employees still rate wages 22 percent higher than private workers in comparable positions.

Both witnesses did agree on one key point: the federal pay system needs to be reformed.

For roughly 70 percent of federal civilian employees, pay is dictated by the General Schedule, which includes nearly-automatic pay and promotion steps. Sherk called the system broken, noting that the government generally rewards employees for time served and not based on performance.

He testified, "The government gives its workers little incentive to work."

Berry acknowledged that the pay system is not perfect.

"The system is six decades old and could use a reexamination," he said.

Having heard from Sherk, Berry and other experts, it is now up to lawmakers to determine if an overhaul is in order.