Democrats are quick to point out “income inequality” in the private sector. But what about income inequality between the private sector and public sector?
Studies have found that the greatest income inequality is between government bureaucrats and private sector American workers.
In the November 19, 2015 Wall Street Journal column “The Sweet Gig of Being a Bureaucrat” Mac Zimmerman wrote:
The average federal worker’s compensation is worth $119,934, nearly 80% higher than the average in the private economy.
A review of the nation’s capital turns up ample evidence: In a report released last month, Cato Institute budget analyst Chris Edwards calculated that the average federal employee earned $84,153 in 2014—roughly 50% more than the average worker in the private economy. When you include benefits like health care and pensions, the average federal worker’s compensation rises to $119,934—nearly 80% higher than everyone else. “The federal government has become an elite island of secure and high-paid employment,” Mr. Edwards wrote, “separated from the ocean of average Americans competing in the economy.”
Zimmerman goes on to note:
Pay for federal employees has grown significantly faster than for private employees. The percentage difference between the two has doubled in the past 25 years. Federal work is more lucrative than the average jobs in finance, information and professional fields.
Moreover, the number of federal employees salaried at more than $100,000 has grown by nearly 10% in the past five years, to more than 300,000. The 1,000 best-paid federal workers make a minimum of $216,000, with most of the highest echelon working at Veterans Affairs. Employees of little-known agencies such as the National Credit Union Administration and the Farm Credit Administration also top the list.
The total cost to taxpayers of federal wages and benefits clocks in at $260 billion.
Fast forward to 2018 after Mr. Donald J. Trump came to Washington D.C. to “drain the swamp.”
Michael Busler in a column titled “Trump: Reducing federal spending by freezing bureaucrat costs” suggests that President Trump cut the salaries of all federal bureaucrats by 10%. Busler writes:
Trump announced that he was canceling the scheduled 2.1% across-the-board pay increase for federal workers, except for the underpaid military who will see a 2.6% increase in pay. This will affect about 2.1 million federal workers. Trump saw that the average federal employee costs the taxpayers almost $120,000 per year.
This should save the federal government about $25 billion.
According to a study by the Cato Institute, federal government employees earn 50% more than their counterparts in the private sector. When benefits are added in the differential jumps to 78%.
“In light of our Nation’s fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets,” Trump wrote in a letter to the Speaker of the House and the President of the Senate.
Busler concludes that cutting salaries of federal bureaucrats is both warranted and necessary. Busler writes, “Trump should consider a 10% salary reduction for all federal workers. The fear is that the government may lose some valuable employees. But if they are currently earning 50% more than those in the private sector, the workers are still better off working for the government, I doubt many would leave their jobs because of a 10% pay cut.”
Do you agree?
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