Federal Workers Deserve Higher Pay -- Just Like Other Workers

The Congressional Budget Office released a report yesterday revealing that, on average, federal employees earn 16 percent more than their peers in the private sector. And, true to form, austerity hawks in Washington have wasted no time blowing their gaskets in protest -- the office of Congressman Paul Ryan released the following statement later that same afternoon:

While millions of Americans continue to struggle with stagnant wages and high unemployment, government bureaucrats in Washington continue to enjoy significant advantages over those whose tax dollars finance their compensation.

Before we continue, let's stop and get clear on exactly what the report states. If you take a closer look, you'll find that the pay disparity between federal workers and their private sector counterparts actually varies greatly by education level: federal civilian workers with a high school diploma or less earn on average about 21 percent more than similar workers in the private sector, while those with a bachelor's degree earn roughly the same as their private sector counterparts and those with professional degrees ultimately earn about 23 percent less.

The pay premium gained by joining the federal workforce is therefore reserved largely for less-skilled workers -- once you recognize this, it's hard to classify higher wages for these folks as a case of wasteful overpayment, since there is virtually no group in the U.S. more impacted by declining wages than Americans with a high school diploma or less. Since 1980, earnings for those without a high school diploma plummeted nearly 21 percent, and those with a high school diploma only saw their earnings increase 2 percent. Rather than disparaging public sector pay levels, we should be embracing them as standards from which the private sector has shamefully deviated over the three decades.

 And why exactly have less-skilled federal workers not been forced to bite the same bullet as their private sector counterparts? Here's one answer: the BLS reported last Friday that union membership rates in the public sector are more than five times higher than in the private sector -- fully 37 percent of public sector workers belong to a union, compared to only 6.9 percent of those in the private sector. Just imagine how many workers stuck in dead-end retail jobs would finally have a shot at reaching the middle class if these unionization rates could be attained in the service sector as well.

Finally, it's also very disturbing that Americans with professional degrees have to take a 23 percent pay cut in order to join the public sector -- this doesn't give top law school grads much of an incentive to work for the SEC or CFPB when they could earn tons more at a white shoe law firm in New York. As the financial crisis has made clear, the challenges facing federal regulators are more complex now than ever: this is no time to be losing out on top talent because government can't pay enough.

Historically, the public sector has acted as a leader in the U.S. labor market, setting standards for fair pay and upward economic mobility for all American workers. If Tea Partiers like Paul Ryan allow this truth to be forgotten, it'll be one of the most significant and longer-lasting casualties of austerity politics yet.