OPM federal pay argument rebutted by Cato

Thursday - 8/19/2010, 10:41am EDT

Tad DeHaven, budget analyst, Cato Institute

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By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

Lingering recession, high unemployment, and an expanding government have got people looking at federal pay and benefits. The conservative Cato Institute has produced a study showing that on average, federal workers are paid way more than their private sector counterparts.

That was hotly disputed by OPM director John Berry.

Tad DeHaven, a budget analyst at Cato, told Federal News Radio he decided to respond to Berry in a blog posting because millions of jobs in the private sector have been cut while the federal government has been adding jobs.

The (pay) numbers are a secondary issue. The primary issue is that a federal employee, you can argue about their subjective worth, but they necessarily earn their benefits and compensation at the expense of the private sector. Every dollar a federal employee is one less dollar that somebody in the private sector earns. I don't understand the angst in Washington with some folks who are upset about this. The rest of the country is suffering. I understand Washington's a bubble, but the private sector's really suffering, and it's very hard for people to understand.

And that's at the core, said DeHaven, of the resentment against federal employees and their salaries being expressed by the private sector.

"When they see the folks (federal workers) that they're supporting, frankly against their will because you have no choice when it comes to taxes, getting $123,000 dollars on average in total compensation, that's hard for folks to swallow these days."

The budget analyst concedes comparing salaries for jobs between the private and public sectors is like comparing apples to oranges. DeHaven said the critical difference is that wages and compensation in the private sector are a reflection of the market, while the federal government is a monopoly. "We don't know, truly, what a federal employee is worth because it's impossible to define it."

As to the position that federal pay should be used as a recruiting tool, DeHaven was emphatic. "I would rather the best, the smartest and the brightest be out in the private sector building new technologies, creating software, doing those sorts of things. I don't want the best and brightest in the federal government, quite honestly."

To read DeHaven's posting on Cato's website, click here.

Federal News Radio has invited the Office of Personnel Management to respond to the additional points made by DeHaven and the Cato Institute.