The federal bonus

Federal workers are compensated 12% more than private workers:

Conducted for the Bureau of Labor Statistics, the CPS is a long-running survey that couples earnings and employment information with detailed demographic characteristics of the survey population. At first glance, the CPS data show that the average hourly wage for a federal worker is about 48% higher than a private worker’s. Yet because federal employees tend to be more educated and experienced than their private counterparts, as Mr. Orszag noted, one has to control for these skill differences. This reduces the public-private salary gap—but it does not eliminate it. The federal wage premium for workers who have the same education and experience stands at 24%, still a windfall for public employees.

Even using all the standard controls—including race and gender, full- or part-time work, firm size, marital status, region, residence in a city or suburb, and more—the federal wage premium does not disappear. It stubbornly hovers around 12%, meaning private employees must work 13½ months to earn what comparable federal workers make in 12.

And that doesn’t count the excellent job security that comes with working for the federal government.

POSTSCRIPT: I think this story is related: “Survey says: Federal workers are glad to have their jobs.” You don’t say.

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