Federal Pay Gap

“That government is best which governs least” – attributed to Thomas Paine but unknown

I’d like to thank Cato-at-Liberty for the charts in today’s blog. The numbers come from the annual report of The Bureau of Economic Analysis showing compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D).

At one time federal employees were underpaid. So in order to attract workers they were offered great benefit packages instead. But a funny thing happened. In order to attract top talent and win the votes of federal employees, congress has been steadily increasing the pay for itself and for all government employees. In 2008, the average wage for 1.9 million federal civilian workers was $79,197. Compare this to an average of only $49,935 for the nation’s 108 million private sector workers (measured in full-time equivalents). As the chart below shows this pay gap is increasing.

If we also measure the always-generous federal benefits the size of the gap is astonishing! Federal worker compensation averaged a remarkable $119,982 in 2008, more than double the private sector average of $59,909.

Bottom Line

Government is a necessary creature but it should not be pampered or overfed. George Washington warned in his farewell address as president of the dangers of "big government". Even a democratic government can become a "despot" if it assumes too much power.

"It is important, likewise, that the habits of thinking in a free country should inspire caution in those entrusted with its administration, to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another. The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create, whatever the form of government, a real despotism. A just estimate of that love of power, and proneness to abuse it, which predominates in the human heart, is sufficient to satisfy us of the truth of this position."