Politics Archives

CBO: Highly Educated Feds Earn Less Than Those in Industry

 

Federal employees with professional or doctorate degrees earn about 23 percent less than those with the same degrees in the private sector, according to a new report by the Congressional Budget Office.

The report, released Monday, found that overall, federal employees are paid an average of 16 percent more in pay and benefits than their private sector counterparts. Federal employees with a high school diploma, for example, earned 21 percent more than private sector employees with similar education levels, while federal workers with a bachelors degree earned about the same as those in the private sector. Federal workers in those two groups also enjoyed better benefits than those in the private sector, with benefits 72 percent higher for federal employees with a high school diploma and 46 percent higher for federal employees with a bachelor's degree.

But federal workers with professional, masters or doctorate-level degrees earned an average of about 23 percent less than their private sector counterparts, the study found. Average benefits for professional and doctorate-level employees were about the same in the two sectors.

CBO used data for 2005 through 2010 reported by a sample of households and employers to estimate differences between the cost of wages and benefits for federal employees and the cost of wages and benefits for similar private-sector employees.

CBO's study also noted that studies of federal pay like one by the American Enterprise Institute, which claimed that federal workers earn 61 percent more in pay, benefits and extra job security than their private counterparts, "overstates the differences between the cost of employing federal workers and similar private sector workers because the dispersion of wages (the range from low to high wages) differs between those two groups."

Meanwhile, the most common occupations within the Defense Department and the government at large were information technology workers as well as program analysts, program administrators and criminal investigators.

Colleen Kelley, president of the National Treasury Employees Union, agreed with the conclusion that highly-educated workers earn significantly less than their private counterparts, but cautioned against accepting other segments of the CBO report. "CBO is clearly the expert on Congressional budget scoring, but pay comparisons are not its principal expertise; that is the expertise of the Bureau of Labor Statistics," she said, noting that BLS data have shown a consistent pay gap of 26 percent in favor of the private sector when comparing similar public and private sector jobs.

Kelley also questioned the other segments of the study, and whether Congress would want to cut the salaries of the lowest paid workers by the amounts the report claims are overpaid. "That would mean cutting the salary of a clerk earning $20,000 a year by 20 percent down to $16,000 while increasing the salary of a highly-paid manager making $200,000 by 20 percent to $240,000," she said.

What are your thoughts on the study, as it compares to other studies on federal pay, including BLS data and the report by the American Enterprise Institute?

Your Chance to Give OPM a Piece of Your Mind

 

Are you eager to share your thoughts about your boss, your pay and benefits, telework or the use of technology and collaboration tools, with your agency leadership?

Office of Personnel Management Director John Berry announced Friday that the 2012 Federal Employee Viewpoint survey will, for the first time, be open to all permanent, full and part-time employees. This means more than 1.8 million federal employees will be invited to give their opinions, more than triple the number of employees surveyed in 2011.

"While a governmentwide census will not be conducted every year, having large numbers of respondents will allow agencies the opportunity to analyze results and develop action plans at lower levels in the organization this year."

The annual survey assesses governmentwide worker satisfaction and includes results based on individual agencies, demographics and private sector comparisons. The data also are analyzed by the Partnership for Public Services in their "Best Places to Work in the Federal Government" report.

Administration of the next employee survey is scheduled to begin in April, and Berry encouraged agency chief human capital officers to champion the 2012 survey to "ensure that your employees feel their voices are heard and their opinions will drive continuing improvement in the culture in their agency."

Tech Workers Last Year Saw Highest Pay Growth Since 2008

 

Technology professionals on average earned salary increases of more than 2 percent in 2011, their largest annual salary growth since 2008, according to a new survey by Dice.com.

Dice's 2011-2012 annual salary survey of more than 18,000 IT professionals found that after two years of wages remaining nearly flat, tech professionals finally saw average increases of more than 2 percent, boosting their average annual salary to $81,327 from $79,384 in 2010.

Tech professionals in the private sector also saw a considerable jump in the size of average bonuses, which were up eight percent to $8,769 in 2011. The number of tech professionals receiving bonuses last year also increased to 32 percent, compared with 29 percent in 2010 and 24 percent in 2009. The industries most likely to pay out bonuses were telecom, hardware, banking, utilities/energy and software, the survey found.

These increases come as all federal workers are under a two-year freeze on across-the-board pay increases. The two-year pay freeze does not apply to performance awards and bonuses, promotions, within-grade increases, quality step increases and other forms of incentive pay for federal workers.

Still, despite the average rise in overall pay, entry-level salaries continue to push downward, Dice found. Professionals who generally saw their wages increase were those with 11 or more years of experience in their field.

Technology professionals in Silicon Valley continue to be the most well-paid, with annual salaries topping six figures for the first time since Dice began the survey a decade ago. Tech workers in Silicon Valley brought home an average annual salary of $104,195 in 2011, up 5 percent over last year. Thirty-eight percent of tech professionals in the valley also received bonuses averaging $12,450.

Average salaries in the Washington D.C./Baltimore area also increased 6 percent in 2011, to $94,317. Other areas seeing growth in tech salaries were Austin ($89,419), Portland ($82,055) and Houston ($89,307).

"Conventional wisdom says that as Silicon Valley goes, so goes the tech world," said Tom Silver, "Nationally, we're seeing stiffer competition and higher salaries for tech pros with the right skill sets and the right experience level."

How do your skills, salary and other incentives stack up? Do the survey results make you more satisfied with your government IT job, or do they make you want to jump ship for the private sector?

A 0.5 Percent Pay Boost in 2013?

 

Federal employees have been under a two-year freeze to annual across-the-board pay increases since last year, and the prospects for next year are not looking much brighter: President Obama is set to propose a 0.5 percent pay increase as part of his 2013 budget proposal, the Washington Post reports.

According to two senior administration officials familiar with the plans, Obama will propose the 0.5 percent pay increase for federal workers in his 2013 budget proposal, set to be released in February. The pay increase would be the first automatic, across-the-board pay increase for feds since Obama ordered a two-year pay freeze in late 2010.

Republicans on Capitol Hill have called for extending the two-year pay freeze for an additional year and even up to an additional three years. They also have proposed eliminating step increases, cutting the workforce by 10 percent through attrition and cutting some federal retirement benefits.

"A permanent pay freeze is not an acceptable policy," one senior administration official told the Post on Friday. "While modest, a 0.5 percent increase reflects the belt-tightening we must do in these difficult times."

The modest increase in federal pay would save about $28 billion over the next decade and $2 billion in fiscal 2013 under the caps authorized by budget control measures passed last summer, officials said.

Federal employees would still be eligible for other pay increases, such as those for longevity, performance and promotions, as has been the case during the current two-year federal pay freeze.

What are your thoughts on the proposed 0.5 percent pay increase for 2013?

Winter Woes

 

The House on Tuesday passed legislation that would finance the payroll tax holiday partly through extending the two-year federal pay freeze through 2013 and increasing the amount government workers contribute to their pensions. But what impact could such measures have on the federal IT workforce going forward? According to a new survey by Dice, it could mean bad news for recruiting and retaining federal IT professionals, many of whom could face much brighter prospects in the private sector.

Of nearly 1,200 IT-focused hiring managers and recruiters surveyed by Dice, 65 percent said their companies or clients are looking to add technology professionals in the first half of 2012, with 27 percent looking to expand their staffs by more than 20 percent.

Many companies are using pay incentives to lure tech workers. Forty-two percent of hiring managers and recruiters predicted that salaries for new hires would grow in the coming year. This marks a slight drop from 47 percent in May 2011, but is still nearly a dozen percentage points higher than the results of any hiring survey since June 2008, Dice found. Still, like federal workers, IT pros in the private sector also are facing flat salaries, with 44 percent of respondents indicating that salaries are the same as last year.

Nearly half (48 percent) of respondents said that the time to fill open tech jobs has grown longer than the year before, with 57 percent of that group saying the hiring delays are due to a shortage of qualified tech talent, while 31 percent said the economy was slowing hiring efforts. Tech professionals with six to 10 years of experience are most in demand by companies, followed by those with two to five years in IT, Dice found.

But despite the sluggish economy, the risk of layoffs at private companies is low, the survey found. For corporate hiring managers who recruit for their own needs, just 16 percent said that layoffs are likely in the first six months of 2012. Many hiring managers (38 percent) are concerned that voluntary departures will increase in 2012, compared to 43 percent who were concerned about attrition in mid-2011, the survey found.

Does the possibility of better prospects in the private sector, particularly in light of a potential federal pay freeze extension, make you want to jump ship on your federal IT job?

Potential Pay Cuts

 

Cuts to federal pay could hurt government programs over time, the Congressional Budget Office director said Wednesday to members of the super committee tasked with cutting the federal budget deficit.

CBO Director Doug Elmendorf noted at a hearing of the Joint Select Committee on Deficit Reduction that proposals to freeze federal pay rates could have an adverse impact on government programs going forward.

"Lowering pay rates for federal civilian employees could hamper efforts to recruit and retain workers [particularly in some occupations], which could reduce the overall skill level of the federal workforce over time," Elmendorf said. "Having fewer federal workers would probably lower the levels of service that federal agencies provide to the public, unless cuts in the agencies' workforce were accompanied by actions to enhance productivity."

There is little doubt that information technology is one of the major career fields that would be adversely impacted by freezing federal pay, particularly as recent research shows that salaries for private sector tech jobs will rise an average of 4.5 percent in 2012, more than any other job field.

Federal worker proposals sent to the super committee include extending the two-year civilian pay freeze for up to an additional three years, eliminating step increases, cutting the workforce by 10 percent through attrition and cutting several federal retirement benefits.

Five-Year Freeze on Federal Pay?

 

As a recent report by Robert Half International finds that IT salaries in the private sector are projected to rise an average of 4.5 percent in 2012, lawmakers in both the House and Senate are recommending the deficit-reduction super committee make additional cuts to federal pay and benefits.

In a letter sent Friday to the super committee, Republican members of the House Oversight and Government Reform Committee called on the deficit cutters to consider measures including extending the two-year civilian pay freeze for an additional three years and eliminating step increases.

The letter also recommends cutting the workforce by 10 percent through attrition; hiring one new worker for every three who leave or retire; and cutting several federal retirement benefits, including moving from a high-three to a high-five calculation, increasing the Federal Employees Retirement System contribution from 0.8 percent to 6.2 percent, increasing the Civil Service Retirement System contribution from 7 percent to 10 percent, and eliminating FERS for all new hires.

A separate bipartisan letter to the committee also recommends that the current two-year federal pay freeze be extended -- for one additional year -- and that pension contributions by federal employees increase by 1.2 percent. In addition, the letter from leaders of the Senate Homeland Security and Governmental Affairs Committee recommends moving to the high-five pension calculation, streamlining pharmacy benefits under the Federal Employees Health Benefits Program and cutting down on contractor costs.

"The sacrifices we ask of federal employees must be part of a comprehensive national effort to get our fiscal house in order," the Senate letter states. "Done correctly, repairing our national balance sheet will strengthen our economy and yield a new and better fiscal reality in which all Americans, including federal employees, can benefit."

What are your thoughts on the proposed cuts to your pay and benefits, especially given the news that private sector IT salaries are on the rise?

Lawmakers Propose Workforce Cuts

 

Another bill introduced in Congress on Thursday looks to reduce the size of the federal workforce through attrition over the next few years.

The bill (H.R. 3029 and S. 1611), introduced by Rep. Mick Mulvaney, R-S.C., and Sen. Ron Johnson, R-Wis., would reduce the size of the federal workforce by 10 percent by 2015. The reduction would not come from layoffs, but rather attrition, mostly from the large number of retirements projected over the coming years. The bill proposes hiring one federal employee to replace every three who retire or leave their job.

Some exceptions would be made for certain national security or public health concerns under the legislation. The legislation also proposes limits on service contracts to supplement the reduced workforce "except in cases in which a cost comparison demonstrates that such contracts would be to the financial advantage of the government."

The bill's sponsors estimate that the legislation would save $139 billion over the next 10 years.

"We cannot continue to substitute job creation with government-funded employment," Mulvaney said. "This legislation -- a proposal supported by the bipartisan Simpson-Bowles Commission and selected by the American people as part of the YouCut program -- will boost private sector employment by slowing the explosive growth of the public sector."

Mulvaney and Johnson contend that the federal workforce has grown by nearly 15 percent, or 300,000 workers, over the last five years. But a recent analysis by the National Active and Retired Federal Employees Association showed that the size of the federal workforce has actually decreased by more than 200,000 employees since 1990, all while new demands in areas like homeland security and technology have increased.

The new bill is similar to one introduced in June -- the Reducing the Size of the Federal Government Through Attrition Act (H.R. 2114), by Reps. Darrell Issa, R-Calif, Dennis Ross, R-Fla., and Jason Chaffetz, R-Utah. That bill would allow the government to hire only one new employee for every three who leave until a 10 percent overall reduction in the federal workforce is met.

Trimming the Workforce

 

A bill introduced Monday in the House would follow up on the deficit commission's recommendation to cut the federal workforce by 10 percent.

The bill (H.R. 2114), introduced by Reps. Darrell Issa, R-Calif., Dennis Ross, R-Fla., and Jason Chaffetz, R-Utah, would reduce the size of the federal workforce by 10 percent by 2015. The bill allows for one federal employee to be hired to replace every three who retire or leave their job.

The bill also prohibits agencies from hiring contractors to get around the reduction in the size of their workforce.

The bill draws on recommendations from the President's National Commission on Fiscal Responsibility and Reform, which estimated that a 10 percent workforce reduction would save taxpayers $127.5 billion over ten years.

"Office of Personnel Management projections suggest approximately 400,000 federal employees are currently eligible for retirement," Ross said in a statement. "As these workers leave, we cannot let this opportunity to save taxpayer money pass."

Still, some Democrats have contended that claims of a bloated federal workforce are false. Rep. Elijah Cummings, D-Md., said at a hearing last month that executive branch employment on a per capita basis is at its lowest level in 50 years. In 1962, for example, there were 13.3 federal employees for every 1,000 Americans, while today, there are only 8.4, he said, pointing to Office of Management and Budget data.

What are your thoughts on the proposed workforce cuts? What impact would they have on your IT department and your agency's plans for IT?

Rightsizing IT

 

What is the right size of the federal workforce? A House subcommittee on Thursday sought out answers to that question, in part to determine how several proposals to cut federal jobs and freeze hiring should move forward, if at all.

Dennis Ross, R-Fla., chairman of the House Oversight and Government Reform subcommittee on the federal workforce, argued that the size of the federal workforce now stands at over 2.1 million, the largest in modern history.

Still, federal employee unions and groups argued that despite the impression of a bloated government, the Census shows there are nearly the exact same number of federal employees today as there were in 1946. In addition, the U.S. population has more than doubled since then, while federal services have grown to account for needs like interstate highways, space exploration, technology and terrorism.

Two lawmakers have introduced legislation that would restrict federal hiring until the government eliminates the budget deficit. A bill introduced earlier this month by Rep. Tom Marino, R-Pa., would prohibit agencies from hiring until the budget deficit is eliminated, while another bill by Rep. Cynthia Lummis, R-Wyo., would reduce the size of the workforce through attrition by hiring only one employee who retire or leave federal service.

But witnesses suggested that arbitrary cuts or freezes to federal hiring as proposed in the legislation may have other consequences. "The fact is that any savings generated would simply be shifted to private contractors who generally cost more, are less accountable, and are unable to do the work of the federal government as well or as effectively as federal workers," said Colleen Kelley, president of the National Treasury Employees Union.

What are your thoughts? Is the federal government already "rightsized," and what impact would cuts or freezes to federal hiring have on your IT department and mission?

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