- The Washington Times - Monday, March 30, 2009

Many white collar federal workers, for a long time now, have been convinced that they could make a lot more money if they had gone into the private sector. And they have official government-supplied data to prove that point.

By the same token, many people who don’t work for the federal government, have long felt that their counterparts in the civil service make more money and enjoy far superior benefits. Not to mention job security. And they’ve also got official government-supplied data to prove it.

So whose right? And if by some miracle one envious group (the feds or the nonfeds) dropped their grass-is-always-greener mantra, what would it matter? What next? If you agree there is a problem, an imbalance one way or the other, how do you fix it?

Up until now this you’ve-got-it-made argument has been useful in helping certain groups (unions for the feds, conservative think tanks for the nonfeds) stay in business. But with the economic downturn, which some experts say is approaching Great Depression levels, the argument could have legs.

In 1990 the Democratic Congress and a Republican White House approved changes in the way feds would get future raises. It used Bureau of Labor Statistics data to show that for selected occupations (those selected by the BLS) the federal government paid its people 20 percent to 30 percent less than the private sector. The law - which took effect in 1993 - said that feds would get a series of catchup raises over the next decade to close the so-called “pay gap” between government and industry.

Former President Bill Clinton took one look at the law, and the catchup pay system it setup, and said “no way!” He and his advisers concluded that comparing pay alone wasn’t the way to go. They said the system was “flawed.” They argued for a “total compensation” approach that would include the value of fringe benefits - retirement, holidays, amount of vacation - as part of the overall comparison.

Many felt that using the whole package - not just pay rates - might dramatically narrow the “gap.” Some said that the value of the federal retirement package alone, with its inflation-indexed pension system, would tip the balance in favor of the feds.

Pro-fed groups argue that comparing salaries on an occupation-to-occupation basis makes sense and is fair. If federal engineers in Houston, for example, are paid less than their private sector counterparts, that should be a factor in the next pay raise. Those annual surveys formed the basis for raises that should have been - but never were fully proposed - for federal workers.

Opponents of that system said we should look at the total picture, not just a federal-private sector matchup of jobs selected by federal workers.

In 1997 the Bureau of Economic Analysis released a study that showed that the average nonfederal worker earned $48,000 per year compared to an average salary of $77,000 for federal civil servants. When fringe benefits were cranked into the equation, the BEC said, total federal compensation (the value of pay and job-related and lifetime retirement benefits) was an average of $116,000 compared to only $57,000 for the private sector.

Comparing applies to oranges? Where you stand on the issue, as one expert said, depends on where you sit.

The pro-con argument has never been settled. But like most things that originate in Washington, it does serve some purpose: It gives unions and good-government groups something to be perpetually indignant about. And it gives conservative (or just plain anti-bureaucrat) associations something to decry and whip up their contributors.Call it: Full Employment for all members - left, right and center - of the chattering class.

With the still shrinking economy, with weekly first-time jobless claims growing, with companies failing or furloughing employees, the battle over who gets what could become more than just an ongoing, annual food fight.

The federal government is expected to grow, as part of the economic stimulus plan, even as the private sector shrinks. Federal workers next year are all but guaranteed a 2 percent pay raise (perhaps as much as 2.9 percent or even more if the military gets more) while many companies are cutting their payrolls, eliminating contributions to 401(k) plan accounts and asking workers - through voluntary furloughs - to take pay cuts of up to 20 percent.

Congress is looking at legislation that would give a tax-break to federal retirees (allowing them to pay their premiums with pre-tax dollars) that would not apply to private sector retirees. It is also considering a bill that would give federal postal workers up to four weeks of paid leave when they have or adopt a child. That proposal does not include private sector workers who - under current law - can have time off, but it is unpaid time.

Backers of the plans say that the government should be the “model” employer and that if these improvements are made at the national level, private employers will follow suit.

Opponents of the fed-exclusive improvements say it would further increase the pay gap - using the total compensation model - with federal workers on the winning side.

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