Pay gap between government, private sector widens to 34 percent

Friday - 10/19/2012, 6:42pm EDT

The gap in pay between federal employees and private-sector workers has jumped 8 percentage points since last year, according to new data presented at a Federal Salary Council meeting Friday.

On average, federal employees earn 34 percent less than their private-sector counterparts, according to the council's analysis.

The pay gap, which is calculated using data from the Bureau of Labor Statistics based on pay in 34 locality pay areas, was 26 percent last year.

The council, which is made up of labor representatives and pay experts, makes recommendations on federal pay to the President's Pay Agent.

Over the last several years, the council's analysis has shown the pay gap increasingly widening.

Still, two years after President Barack Obama proposed a two-year pay freeze for civilian government employees, the issue of whether and how much feds are underpaid remains contentious.

A Congressional Budget Office study released in January found, overall, federal employees actually earn about 2 percent more in wages compared to private-sector workers, with wider differences based on education level.

But a June 2011 report from the the American Enterprise Institute, a conservative think tank, indicated government pay outstripped private-sector pay by 14 percent.

In reviewing various statistics on federal pay, the Government Accountability Office said the widely divergent results were due to the different methodologies the various studies used. Attempting to compare or extrapolate from them would be "potentially problematic," GAO auditors said.

New system leads to greater data fluctuations

Concerns over methodology also payed a role in the salary council's latest report.

In particular, changes to the way BLS gathered the data could affect the council's analysis, according to documents presented at Friday's meeting.

Before 2011, the council relied on data from the National Compensation Survey to calculate the pay difference.

However, BLS phased out the traditional model in favor of one that combined it with Occupational Employment Statistics data — which cut the sample size in half.

When the council first began using this revised model last year, it was "concerned about sizable increases" in the pay gaps, according to council documents. About 40 percent of the increase was attributable to the reduced sample size, with other factors including the two-year federal pay freeze.

The council also noted increasing fluctuation in the average change of the pay gap across the 34 locality-pay areas since the BLS adopted the new model.

The council unanimously voted to request the bureau to restore the full National Compensation Survey model.

In addition, the council recommended naming 12 new cities to locality pay areas.

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