Heritage: General Schedule should be abandoned

Tuesday - 7/13/2010, 10:45am EDT

James Sherk, senior policy analyst for labor economics, Heritage Foundation

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By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

Federal pay and its costs have become a source of numerous studies and surveys -- and some heated discussion.

While part of the debate in the public forum questions whether federal workers are overpaid, another contends the debate itself is flawed because comparing federal pay with that of the private sector is like comparing apples to oranges.

James Sherk, senior policy analyst for labor economics, is author of a new report from the conservative Heritage Foundation, which tries to address the comparison issues.

Sherk told Federal News Radio, "the data I used was the same survey that the government uses to calculate the unemployment rate. It's called the Current Population Survey."

He explained that every month the government interviews about 60,000 Americans and asks them how much they're making, how much education they have, whether they're working or not, et cetera. And among the questions asked in the survey, according to Sherk, is "do you work for the federal government or the private sector?"

Sherk said he took the reported hourly wages, controlled for "education, skills, experience... all the sorts of things you'd expect to effect wages" and found that the average federal employee is earning hourly wages about 22% higher than the comparable private sector employee.

But it's important to note that's the average federal employee. Not all federal employees are getting overpaid. You have some federal employees who are highly skilled or in highly skilled occupations who aren't getting any sort of pay premium. And then you have some federal employees who are getting close to a 40 or 50% pay premium. So on average, the taxpayers are overpaying, but that doesn't mean each and every single individual federal worker is getting more than they would get in the private sector.

Because not every federal employee is being overpaid, Sherk's reports recommends the government move to a more performance based, rather than General Schedule, pay system.

Sherk said Heritage is trying to get the message out and into the public debate that, according to their findings, that "if the average pay were brought to market rates, that would be about a taxpayer savings of about $47 billion dollars a year."

To read the report titled Inflated Federal Pay: How Americans Are Overtaxed to Overpay the Civil Service, click here.

To listen to the entire interview, click on the audio player at the top of this page.