Government Employees Get Paid Less In The Private Sector

0-washington-dc_master

A major point of political contention these days is public worker pay. Those on the right, interested in smaller and more cost-effective government, believe public workers are overpaid. Those on the left, anxious to protect one of the last bastions of organized labor from which a large junk of their monetary political support flows, think public workers aren’t paid enough.

So who is right? We can point to data showing that government workers, on average, get paid more than their private sector counterparts. But that data isn’t necessarily a conclusive measure in that it’s often hard to compare government jobs to private sector jobs.

So how about comparing private sector pay to public sector pay for the exact same worker? Well, according to research from the American Enterprise Institute, people who go to work for the government (even as teachers) tend to get a significant pay bump. Government workers who head into the private sector tend take a pay cut.

According to the SIPP data, the average federal worker shifting to a private job actually accepts a small salary reduction of around 3 percent. Similarly, private sector workers who move to federal jobs don’t take a pay cut. They get a first-year raise averaging 9 percent, well above the raise other workers get when they switch jobs within the private sector. …

Nationwide, non-teachers who move into teaching receive an average raise of around 8 percent, according to SIPP data, while teachers who leave the profession take an average salary cut of around 3 percent. Similarly, three recent state-level studies (in Florida, Missouri and Georgia) using administrative records found no average wage increase for ex-teachers.

One criticism of these numbers that could be valid is the idea that good workers tend to get government jobs, and bad workers tend to leave government jobs.

I’m not sure that passes the smell test, but even setting that caveat aside, this data is compelling.

We’re overpaying government workers.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

Related posts

  • WOOF

    Consultant Kent Conrad,
    Ca Ching, Ca Ching, Ca Ching.

  • SigFan

    I’m sure they’re shocked that out in the private sector their employers actually expect them to work and produce something too.

    • yy4u2

      Been in both sectors. I think Rob should have said it this way, “Some good workers get govt jobs, a lot of bad workers cleave to them as it is very hard to fire them.” And why have a work ethic when Joe Backgammon that plays games most of the time gets the same raise as everyone else. I’d be willing to bet most agencies/divisions could trim their budgets substantially by just getting rid of that ‘one guy’ or two.

  • ellinas1

    Senator Jim De Mint’s pay by the government $174,000.

    Senator Jim De Mint’s salary at the heritage foundation over $1000000.00

    • sbark

      Well at least your pattern is consistent……………

      Whenever the GOP proposes a solution like Fannie Mae or SS reform……..the Left trots out a isolated example of someone who might be slightly affected, rather than appreciate society as a whole that would benefit……….

      here you trot out a isolated example of a quasi govt employee….an elected politician who’s actually makes more outside of the Senate. Actual elected officials are what miniscule percent of what fills the DC cesspool.

      The lefts pattern to deflect with isolated cases has greatly contributed to the economic morass we are in…………..

      They love to trot out a gramma they say will starve to death ……to the detriment of the whole……..100% failure, and they wonder why

      • ellinas1

        Ummm….the subject of the post is salaries of government employees, not Fannie Mae or SS reform.
        What would you pay CIA agents? FBI agents? Embassy personell?
        What in your opinion is a reasonable salary for a federal judge or a teacher?

        • banjo kid

          But Demint is no longer doing his government job. He is the president of a university no senate jobs available in the private sector, got it .

          • ellinas1

            Demint is not the president of any known or unknown university.
            My point is that moving from the government to the private sector can be and in many cases is very lucrative.
            Get it?

          • Wayne

            For congressmen moving into the private sector this is true. For everyone else, practically, I’m sure it is false. Or are you saying otherwise? If you are, what legitimate examples have you got?

          • ellinas1

            What profession would you like to to see an example of?
            FBI, CIA, air traffic controllers, judges, Admirals,Generals,Ambassadors, scientists, lawyers, doctors,……etc. etc?

          • Chris

            So if you’re going to quibble about tangential points (who really knows what the Heritage Foundation is?) there are no such thing as CIA agents, the CIA refers to employees of all stripes as officers. Further, there is no such job as Embassy personell. It’s personnel, and that is not a job, its a description. In fact, the U.S. Department of State hires lots of people who have jobs with private sector counterparts (IT professionals, executive assistants, HR professionals) and they even post some of them to U.S. embassies.

          • ellinas1

            Chris says: “So if you’re going to quibble about tangential points….”

            Then he goes on quibbling about tangential points.
            What’s up with that Chris?

    • banjo kid

      He is not a senator any longer so you can not use that as an example . Do we have a job called Jim Demint?? I can’t think of one.

      • ellinas1

        I was making a point.
        Point being, moving from a government job to a private sector job can and is very lucrative.

        • banjo kid

          So what is the point the post has nothing to do with that point.Point being the article was about the private sector gets less pay then the government counter parts , not that some do well when they leave government . And ( is )so are we at the point we are trying to figure out the meaning of is again?

          • ellinas1

            Should an FBI agent get paid the same as the Wal-Mart security guard?
            How much should an ambassador should be paid? A federal judge?
            A state judge?
            You know teachers are not the only government employees.
            Even then they are employees of the local school district,
            9% on a $5000 dollar a month job equals $450 bucks.
            Shouldn’t a college graduate moving from his McDonald’s job get at least 9% more?

          • Wayne

            Should an accountant get paid more working in the government or in the private sector? Is this that hard for you to understand?

          • ellinas1

            Well, I want the government to recruit and retain the best.
            If that entails paying an accountant more, so be it.
            You would not want to hire a know nothing to do the accounting, would you? Is this that hard for you to understand?

  • Thresherman

    I’m sure that the point will be made that this is proof that unions can get a good deal for their members without realizing that they are in effect bilking the public. The fact is that the public sector unions back Democrats in elections and then the same Democrats repay them by lavishing finanacial rewards on them so that they can contribute even more liberally next election. This is simply graft given the fig leaf of legality.

  • Old&InTheWay

    “Nationwide, non-teachers who move into teaching receive an average raise of around 8 percent, according to SIPP data, while teachers who leave the profession take an average salary cut of around 3 percent”…. Well, compelling would be one way to describe this study. Perhaps misleading or understratified would be another…. Are you comparing all the “non-teachers who move into teaching” the same way? Wouldn’t a majority of these be college students? Also, what percent of those who “leave the profession” are retirees who are picking up extra work??? In my opinion, valid questions that should be asked and answered before I let my outrage flow….

  • Hannitized, Proofs obsession

    If lying propagandists are paid anything, it’s too much.

    Rob has real job envy.

  • Waski_the_Squirrel

    The problem here is it comes back to the original issue: are the jobs comparable? A colleague of mine left teaching to work in the oil field for a lot more money. If I quit teaching to pursue either of my alternating dream jobs (photographer or Christian science fiction writer) I will make a lot less money.

    In certain limited cases like government accountant vs. private sector accountant or lawyer, it might be possible to compare. You might even compare me as a public school teacher to me as a private school teacher, but the information here suffers the same problem Rob cited at the beginning of his article.

    • WOOF

      “Christian science fiction writer” A wide open field.

      • Chris

        Ok, it’s off topic but just for the record, here’s a short list of prominent Christian science fiction writers.

        C.S. Lewis, whose The Space Trilogy is regarded as one of the most influential works in the subgenre.[3]

        The Left Behind series by Tim LaHaye can also be considered Christian science fiction,[10] although the series is also described as “apocalyptic fantasy”.[11]

        Stephen Lawhead, although he is better known for his fantasy novels than his science fiction works.[3]

        Madeleine L’Engle, especially in regard to her novel A Wrinkle in Time and its sequels, first published in 1962.[12]

        Walker Percy with his Christian science fiction work Love in the ruins.[13]

        Gene Wolfe, author of e.g. The Book of the New Sun, who is noted for the strong influence of his Catholic faith, to which he converted after marrying a Catholic.

        Chris Walley and his “Lamb Among the Stars” trilogy.

  • Jeff

    You are absolutely right Rob! I had noticed over the years, the average net income numbers for workers in most states hovered around $39,000-$43,000. But in the District of Columbia, it was at least double that!

    Then, I recently tried hiring back an employee in the private sector who has been working for a government agency. He was offered over $20,000 more than I offered him, and was promised a 2-year minimum contract. Full health-care benefits as well. And my offer was SIGNIFICANTLY higher than the average net income numbers listed above. Nearly double, in fact. Yet the government offer was STILL higher by a long shot.

    We are having a difficult time competing with our own government, and that is just plain WRONG!

    The other shocker to me is…seeing people collecting unemployment that is paying over $400 per week. I have seen 3 Facebook exchanges among friends over the past few weeks describing situations in which they could not hire these able-bodied folks away from unemployment…because it would have only meant an extra $50 per paycheck to these people…and they chose to just stay on unemployment instead so they could stay home and watch their kids and not have to hire daycare. What a mess our country is in!!!!

  • banjo kid

    Here’s an idea government employees except the ones needed for security and the defense of the country and let the private sector run those . Also that would allow the government to make it a profit margin idea to get the private sector to do it , but do not allow them to be on the stock market .

  • http://www.facebook.com/cassie.ann.5220 Cassie Ann

    We are most definitely not overpaying government workers. As a government worker myself, making well under $40K, my check has been cut numerous times in the past 6 years to account for health care, life insurance, and mandatory IRA deductions. The benefits are wonderful, but I am paying for them with a large chunk of my monthly check. On top of paying into my own benefits, the pay is much less than what one would recieve in the private sector. All in all, we are not overpaid.
    Also, if government workers were paid a decent and fair salary, maybe the public sector would attract better competition and the government that everyone criticizes for inefficiency and ineptitude would run more smoothly.

    • HG

      So Obamacare isn’t helping your bottom line either, eh? That makes sense. But what doesn’t make sense is paying inefficient people more money with the intention of making them more efficient and less inept.

  • PIbuzz

    I’ve changed the URL to my directory of government employee salary databases. They are now compiled at: http://pibuzz.com/government-employees

Top