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By Catholic Online (NEWS CONSORTIUM)

10/23/2012 (2 years ago)

Catholic Online (www.catholic.org)

National debate on issue is one we cannot afford to skip.

It's a sweet time to be a government employee. For those who have survived cuts, they have the luxury of working for an establishment that will never go out of business, and that offers both pay and benefits above and beyond what equivalent positions pay in the private sector. Is this fair?

Are we burning money with government pay?

Are we burning money with government pay?

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

10/23/2012 (2 years ago)

Published in Business & Economics

Keywords: National debt, government pay, private sector


LOS ANGELES, CA (Catholic Online) - There's nothing wrong with being a government employee, in fact the work is essential. Without a highly qualified government workforce, the nation would be mired in so much difficulty that how we compensate employees would be the least of our worries. 
Still, the labor costs of the US government are high and it's a fair question to ask if federal employees should make substantially more - or less than their private counterparts. 

Data from the Bureau of Labor Statistics shows that federal employees make, on average, 22 percent less than those working in the private sector, but according to the Cato Institute, those figures are misleading. 

Private sector data includes many low-wage employees, some who do not even earn minimum wage. This includes people who work in restaurants and other similar industries. 

Conversely, some private employees enjoy salaries in the hundreds of thousands, or even millions. 

Also, federal employees must meet minimum qualifications as set by the government, so they must have specific degrees and certifications. The private sector may hire more cheaply, allowing passes on some qualifications to find an employee who is the right fit - and value for a company. 

Benefits are also an area where federal employees enjoy greater perks. For example, large numbers of private employees receive lesser pensions and shorter relief periods from work for various reasons. Many private workers do not receive healthcare benefits, or their benefits are limited. 

Federal workers also receive union protections, as well as incentives and bonuses. 

Finally, federal workers enjoy much more job security then their private counterparts. BLS data shows that federal employees are 8 times less likely to leave their job than those in the private sector. And while the BLS data may be skewed, it still reflect that working for the government provides more job security and better terms than those working in the private sector. 

Perhaps the greatest issue many have with government sector employment is that it's not compensated the same. 

Should it be?

Private sector employees are compensated based on individual value in the market. For example, a website designer may have been paid excellent money in the early 90's to build a website, few people had the skill. Today, websites can be created by template and with the exception of a few, it's impossible to find such work. 

Meanwhile, common laborers are immediately replaceable, so their wages are very low. 

The federal government doesn't have to worry about efficiency, at least not to the degree of a private business. Whatever happens, short of a successful revolution, the government isn't going out of business. If there's waste in government, or if markets change, the government will still be there. 

Ultimately, the federal government paid out some $240 billion in wages and benefits in 2009. That money came from the private sector and from taxpayers. And while the private sector continues to shrink, the federal government continues to hire, at least in some areas. 

People cannot be blamed for choosing the better lot. However, we must ask ourselves if we have enjoyed $240 billion worth of value from the federal government. If so, then we cannot complain. If not, then we should reassess the system and propose meaningful changes, including the privatization of some sectors. In an age of new fiscal responsibility, this is a debate we cannot afford to dodge.


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