FatCratz

Average Pay for Federal Employee: $75,419

But at least they're worth it, right?

What industry can match that pay?

And job security.

And annual cost of living pay increases.

And days off.

And health insurance benefits.

And lack of accountability.

A word of warning to those hundreds of thousands of employees about to join the two million plus federal employees: there are grave tradeoffs for this security and benefits. You will never be as efficient, as productive, or as innovative as you might have been when you start working for the federal government (military excluded). Pass on the security. Join the private sector.

The Sacrifices of Being a Public Servant

It's a truism inside the beltway that government employees accept lower salaries for doing the same job for the sake of service to their country.

But clearly the tradeoffs aren't nearly so clear. As we've discussed in recent weeks, government employees have job security that is unheard of in the private sector, and we know the benefits are excellent. Now a report by USA Today suggests that in terms of both pay and benefits, public employees are outstripping their private counterparts. Further, because there is no incentive for government to tighten it's belt during a recession, the gap is widening:

Public employees earned benefits worth an average of $13.38 an hour in December 2008, the latest available data, the Bureau of Labor Statistics (BLS) says. Private-sector workers got $7.98 an hour. Overall, total compensation for state and local workers was $39.25 an hour — $11.90 more than in private business. In 2007, the gap in wages and benefits was $11.31. ...

For every $1-an-hour pay increase, public employees have gotten $1.17 in new benefits. Private workers have gotten just 58 cents in benefits for every $1 raise. ... Government paid an average of $8,800 annually toward employee medical insurance. Private companies paid $4,100.

Your taxes, hard at work.

Why are Some of the Highest Paid Federal Employees the Least Motivated?, Part II

Because they don't work directly for the federal government, that's why. Because of tight labor regulations for hiring and firing and compensating government employees--and the difficulty of keeping top talent for the long term--many government agencies are making greater use of consultants.

Well, these consulting relationships open up a whole other host of problems, as illustrated by the case of Randy Kimlin, a former chemical company executive who played a large role in the day to day operations of the Occupational Safety and Health Administration (OSHA) under the Bush administration and is currently under investigation for "violations and irregularities" in his compensation:

The improperly paid sum represents a total of $572,946 billed for Kimlin's labor over a period of 27 months ending in mid-2008 and an additional $108,434 in compensation for his commuting costs from South Carolina, the report said.

$20K a month is good money, but it's not clear that in this case the extra money created incentives that were to the good of the taxpayer. Seems that Kimlin might be one of those rare birds... a Fat Cat who is also a FatCrat.

Why are Some of the Highest Paid Federal Employees the Least Motivated?

Incentive, incentive, incentive. Or lack of.

When you get near the top of the federal pay scale, there's no room to grow. Ever. This creates some perverse incentives.

One reader suggests that one such colleague has instituted his own "stop work policy," because there are no incentives to work harder. "Even with a 40-hour week, the culprit contributes less than most."

He bolsters his case with the following article, wryly titled "Down and out at GS-15." For those of you happily plying away in the private sector,  that's the high end of the "general schedule" that sets most career federal employees pay. The article describes how pay is capped at by law at $153,200 per year, which is level four of the Senior Executive Schedule (SES), which sets pay for a smaller, more elite group.

Sure, it can be hard to muster sympathy for these people. Especially when one of their hardships is not sharing in the guaranteed cost of living bump that comes around every January 1 for all their colleagues--a bump worth anywhere from 2.9 to 4.45% this year [try to land that guarantee when negotiating for your next private sector job]. 

The article identifies another problem. This system discourages:

...some of the government's best people, in GS-15, from moving into the SES, where the pay range is $117,787 to $177,000. "People are thinking -- why move into the SES with its more demanding schedule and mobility requirements when there is little difference in pay?

Why work harder, when you don't have to? And when the extra work doesn't bring any greater reward? It is an often cited problem that such people leave the federal government for greener pastures in the private sector. Less noted is the overall drain on productivity created by the lack of incentive for those who stay behind.

FatCratz isn't populist, and we don't oppose people making what their worth--even when they're working for the government. Problems arise when pay and merit, or productivity, are mismatched, and this is exactly what happens all the time in the rigid salary system imposed by the federal bureaucracy.

"Transparency's Sidekick"

There's a great piece on Legistorm's founder, Jock Friedly in today's Washington Post. Legistorm is an online aggregator of congressional staff salaries. All this stuff is a matter of public record, mind you, it's just that it's published quarterly in a large dusty volume that a handful of people used to read. Friedly just made the public information more available:

"A lot of people have said there are no secrets in Washington -- I beg to differ," he said. "The stuff that's buried in documents in this town is incredible."

Legistorm is a longtime companion during my years of government employment, but I can't say it provided much comfort. There is something insidious about having your pay known to your colleagues, and it presents real challenges for setting compensation when everyone knows what everyone makes. But Congress in its wisdom has determined that this level of public scrutiny is a fair trade-off for the unique responsibility held by its members and their staffs. After all, power corrupts, or as Friedly puts it in the Post piece:

"Washington dirties people," he said. "They come to Capitol Hill wide-eyed and wanting to do the public good. Washington changes them."

FatCratz has a lot in common with Legistorm, most fundamentally in the shared non-partisan premise that the tiniest bits of power in conjunction with insufficient accountability has a corrupting influence. And in the conviction that there are many, many untold secrets in Washington, many of them hiding in plain view.

Our approach, however, is quite different, if complementary. While we welcome data-driven submissions that rely on the public record, FatCratz recognizes that data is most powerful in the context of a story. The story behind the data is compelling, and sticks with us.

Regarding congressional salaries, I know many hill staffers that are underpaid at $150,000. And a lot that are over-paid making $55,000. The interesting thing is what they're doing while they're making that money.