Tuesday, January 31, 2012

Education Is Its Own Reward (According To Congressional Budget Office Report)

You've probably seen news reports (like the WaPo's) on a new Congressional Budget Office study comparing federal and private sector pay and benefits. It will add analytic fuel to the election year fire over federal pay cuts and such, because it reinforces an existing narrative that feds get paid way too bloody much.

However, the report itself actually doesn't say quite that. Read it here, or just take a look at the chart above (Figure 4 of the report), which shows how federal and private sector wages compare for employees with different levels of education.
Differences in wages between federal employees and similar private-sector employees in the 2005-2010 period varied widely depending on the employees' level of education.
· Federal civilian workers with no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector.
· Workers whose highest level of education was a bachelor's degree earned roughly the same hourly wages, on average, in both the federal government and the private sector.
· Federal workers with a professional degree or doctorate earned about 23 percent less, on average, than their private-sector counterparts.
Overall, the federal government paid 2 percent more in total wages than it would have if average wages had been comparable with those in the private sector, after accounting for certain observable characteristics of workers.
The comparison on non-wage benefits worked out the same way. Feds with high school education did much better than their private sector peers, those with bachelor degrees did about the same, and those with graduate and professional degrees did much worse.

Federal employment is heavily weighted toward professional or technical jobs, more so than in the private sector. The CBO report says that 51 percent of the federal workforce has at least a bachelors degree compared to 31 percent of the private sector, and 21 percent of feds have graduate degrees compared to 9 percent of the private sector.

As best I can tell from the report, the disproportionately small number (compared to the private sector) of federal jobs that require only a high school education are so very lucrative that they offset the lower-than-private sector wages paid to federal professional and technical employees.

That's interesting information, and potentially something that could counter the usual political lines of attack on federal pay. But forget about it! That would never happen in an election year, if ever.

The headlines about the CBO report ought to say "Federal Jobs Pay Really Big Bucks to HS Graduates, Others Get Not So Much." But instead, I think they will be more like "Worthless Feds Paid Far More Than Hardworking Taxpayers!"

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