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CBO muddies the waters on federal employee compensation

White Collar Feds Earn Less than Private Sector Counterparts, CBO Says

An April report from the Congressional Budget Office muddies the waters on how federal employee compensation stacks up against the private sector. While federal workers with a high school diploma or less earned 53 percent more in total compensation than those in the private sector, total compensation for federal workers (including AUSAs) with advanced degrees was about 18 percent less than those in the private sector, the CBO said.

The CBO found that overall, total compensation for federal workers was 17 percent higher, on average, than for comparable workers in the private sector during 2011-2015. But the different demographic and educational make-up of each sector make any comparison complicated. "Even within groups who have ... similarities, the average differences in compensation between federal and private sector employees do not indicate whether particular federal employees would receive more or less compensation performing a similar job in the private sector," CBO said.

CBO said the biggest factor in the difference in the cost of benefits was that much of the federal workforce still falls under systems that include a defined benefit pension, a concept that has largely disappeared in the private sector. But CBO acknowledged that 2012 changes in the law that increased the share of wages that newly-hired workers must contribute to the federal defined benefit retirement plans, and that will reduce the cost to the federal government of defined benefit pensions beginning in 2017, were not factored into the analysis.