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12/16/2009

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Maybe that's how the government plans to end the recession, create jobs and give everyone health care: hire everyone in government at really high salaries. It does have a certain elegant simplicity.

Becky,

Thank you for the recap of the USA Today article. But for the benefit of our readers I must point out two major fallacies of the USA Today article.

First, USA Today's methodology in your 4th paragraph showing that "pay has exponentially increased" is highly misleading. The paragraph shows a change in headcount for people making over $100,000-$150,000-$170,000 during a 2-year period. The resulting dramatic percentages of 46%-119%-93%, respectively, reflect an increase in employment at those levels, NOT an increase in incremental pay!

USA Today did not bother to investigate why those headcounts increased over the past two years. Note that the time period under review is the end of one president's term and the beginning of a new president's term. Perhaps that is the real story worth investigating by USA Today.

The second major fallacy is in the 9th paragraph of your blog. USA Today observes that the average federal pay is $71,206 compared to the average private sector pay of $40,331.

Becky, you were quite right to caution that you "don't know whether that's a legitimate comparison using salary only or total compensation, or their methodology."

The USA Today did not do a job matching or job evaluation comparison to see if they were comparing apples to oranges when making their average pay comparison. In fact, the federal government's own studies of pay comparability show them 20% to 30% BEHIND comparable private sector jobs. And that's for the General Schedule employees. The gap to the private sector is even farther behind for the federal Executive Schedule which has rates ranging from $143,500 to $196,700 for top agency heads.

Since this USA Today "expose" now appears to be an annual article, maybe I'll ask WorldatWork's new DC office to share with them how true compensation professionals do pay comparisons.

Again, thanks Becky for sharing USA Today's annual article.

Paul

Federal pay is measured by the BLS OES survey which is actually a headcount of people in 801 broad occupational groups rather than "jobs," asking how many fall into 12 broad pay brackets. The top pay bracket surveyed is L for $187,200 and above.

When people move from bracket I ($94K to $118K) to J ($118K to $149K), it's simply a demographic shift in population distributions and not a pay increase. If a lot of federal workers were at $117,950 and got few hundred dollars increase to bump them into the next higher category, it wouldn't mean much.

The article is one of characteristic hysterical journalism, run for effect without regard for accurate meaning.

I have no problem with reports of "well paid" federal employees, and their salaries really don't seem that bad to me. No reason why these employees should be second class citizens when it comes to compensation.

Thanks to all of you for your additional clarification & input. I do have a "jaded eye" when reading, and tend to take bias into account one way or another. None of you commented on the tremendous upswing in hiring by the Feds, so I'm assuming you have no issue with those facts as reported. Hopefully the upswing in these jobs can help many of our unemployed people.

In reference to Frank's comment specifically, I don't have an issue with federal employees being paid on a competitive basis with the private sector. But their benefits and retirement package are richer than those found in the private sector, and in my opinion, financially unsustainable in the long run.

In most systems, there are unintentional loopholes in plan design that allow exploitation. Whether we're working in the public or private sector we need to ensure the integrity of our compensation plans to insure our investor or taxpayers dollars are being spent judiciously.

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