Bureaucrats' gold-plated retirement benefits

  • 9 May 2017
  • NormanL
Bureaucrats' gold-plated retirement benefits

Continuing our theme of generous taxpayer -funded perks and pensions, this piece takes a look at the billions spent every year on the federal workforce. It's not so much federal worker pay that gets us (there is wild debate over whether they are over- or under-paid). It's the retirement benefits they get that really stick out:

While federal employees tend to receive lower salaries than their counterparts in the private sector, they enjoy far more generous benefits. As a result, the CBO reports that federal workers receive “17 percent more in total compensation.”

For the government’s 2.2 million civilian workers, that added up to $215 billion in fiscal year 2016, an average of more than $97,000 per person in wages and benefits. In comparison, a December 2016 report from the Bureau of Labor Statistics calculated average compensation for private sector workers: $68,141 per year.

No college degree? No big deal. The CBO reports that federal employees with a high school education or less earn 53 percent more than their private sector peers. Even those federal workers with more education, up to a bachelor’s degree, receive 21 percent more in total compensation.

It is only at the highest education levels – those with graduate degrees – that private sector workers fare better than civil servants. For this group, total private sector compensation is 18 percent higher than it is for federal employees.

Andrew Biggs, a scholar at the American Enterprise Institute whose research has documented the “compensation premium” enjoyed by government workers, said the gap raises larger social issues. “It’s not good policy for government to pay overly generous benefits, and it’s not healthy for ordinary citizens to resent people who work for government,” Biggs said.

From pensions (plus Social Security), to low-cost health insurance, generous leave and vacation policies, and rules that make firing incompetent workers almost impossible, the federal workforce is way ahead of their private sector peers, particularly in retirement.

While we do not begrudge civil servants earning a fair wage for a fair day's work, the current pay and benefit system is not sustainable...particularly for a federal government that is flat broke.