Government employees

Government Employees: Earning Gap Higher for Less Educated


George Mason University economist Bryan Caplan noted last week some interesting details about the income gap between federal government and private sector employees, relying on a Congressional Budget Office report from last year:

After adjusting for education, occupation, work experience, and other observable characteristics, federal salaries are only 2% higher than in the private sector.

2. HOWEVER, federal workers' fringe benefits are 46% higher than in the private sector.  As a result, total compensation (salary + benefits) is 16% higher for federal workers than comparable private sector workers.

3. Overcompensation is highest for the least-educated federal workers—+36% if you've got a high school diploma or less.  As education rises, the federal worker premium falls.  Federal workers with professional or doctoral degrees actually earn 18% less than private sector counterparts.  Full results:


Caplan notes:

 Yes, the federal government pays more for B.A.s than the private sector does.  The reason, though, is not that the federal government overpays for credentials.  The reason, rather, is that the federal government overpays for breathing.  If someone who never set foot on a college campus manages to land a federal job, his marginal reward for acquiring further credentials is exceptionally low.

He also notes that the report doesn't account for what is really one of the greatest fringe benefits of federal vs. private sector work: job security, which is alas unmonetized in these calculations.


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  1. He also notes that the report doesn’t account for what is really one of the greatest fringe benefits of federal vs. private sector work: job security, which is alas unmonetized in these calculations.

    Pretty much the only reasons a “professional” would take a public job over a private one are job security, ideology and power lust.

    1. I distinctly remember being told by a high school counselor: “If you can pass the civil service exam you will be set for life.”

    2. Not entirely true. There are some jobs that you just can’t find in the private sector. And there are government jobs that people find personally rewarding for reasons unrelated to job security, ideology, or power lust.

      1. There are some jobs that you just can’t find in the private sector.

        Yeah like being a goon. Only the government has goons.

        And there are government jobs that people find personally rewarding for reasons unrelated to job security, ideology, or power lust.

        I mean, other then people who want to fly fighter jets or spacecraft, I can’t think of anything else but job security, ideology, or power lust that motivates government workers.

        1. Public service.


          Public service.

        2. Good pay for relatively little work seems to be the motivation for government employees that post on here. (Correct me if I’m wrong).

        3. Yeah like being a goon. Only the government has goons.

          Lots of research jobs ultimately rely on federal money, even if you don’t have to strictly be a federal employee.

          I mean, other then people who want to fly fighter jets or spacecraft, I can’t think of anything else but job security, ideology, or power lust that motivates government workers.

          I went to high school with a guy who is now a cop, and is truly motivated by a desire to “protect and serve”. I can also imagine that a lot of people who go into fields like education and social work are motivated by a genuine desire to help people. I’m in basic research, and like I said above, I and my colleagues rely on government grants. I don’t know of anyone who went into my field for ideology or power lust, and job security only exists for the small percentage of PhDs who manage to get tenure. Believe me when I tell you that if I could find private sector money to do what I do, I’d go after it.

          1. None of the occupations you mentioned are civil service.

            1. Maybe I’m unclear on the definition of civil service, but at any rate, I thought we were talking about all government employees.

              1. WHat GS level are you? What GS level is your cop friend? Or state equivalent of A Fed GS level?

                None? Then not civil service.

              2. LynchPin, I was talking about actual government employment, not merely being funded by the government. In DoD there are people who willingly go from contractor to government employee (taking a compensation cut) just because they want to be the one making the big money decisions. There are also people who go the other way because they value money over power.

                1. Yeah, I know I was sort of shifting the conversation a bit. But I stand by my main point, which was that many government employees are motivated by a genuine desire to help people or provide a useful service. Of course those good intentions are not justification in and of themselves, but like I said in another thread, judge individuals, not broad groups.

          2. Ah yes, government funded research. Or, in other words, welfare for the educated.

            Which is honestly is what most of the bureaucracy is for. People got their masters degree in diversity theory, and by god they deserve to make 90,000 dollars starting out. They got loans to pay off, don’t you know.

            1. Ah yes, government funded research. Or, in other words, welfare for the educated.

              Like I said, I wish there was more private sector funding for basic research. There isn’t, or at least if there is I definitely don’t know about it. I honestly believe basic research has a lot of merit. We wouldn’t enjoy the tech and standard of living we have today without it.

              1. There is less private funding because the govt has utterly displaced it.

                Why fund something yourself, when a well-crafted grant application can get the govt to fund it for you?

                1. What tarran said.

                  I honestly believe basic research has a lot of merit. .

                  Basic research in what fields?

                2. Or, what’s being funded isn’t a good allocation.

                  Like seeing how ants sort tiny screws in space.

                3. Why fund something yourself, when a well-crafted grant application can get the govt to fund it for you?

                  I suspect this is true. I’d love to see a study on it. I go round and round on this with a friend of mine. He claims basic research is too expensive for companies to do and without government funding it wouldn’t get done.

                  While there may be some truth to that, I suspect the private sector doesn’t do it because why pass those costs onto the customer when the government will do it for you.

              2. What are you considering basic research?

                1. Good question. Broadly speaking, I would define basic research as that which isn’t primarily concerned with a specific application — in other words, curiosity driven. One could probably come up with a better definition. By no means is all basic research created equal, which is why accountability and competitive peer review are so important, and even then it isn’t a perfect system. But when I look at the history of modern science, I see a lot more success for critical peer review than failure.

          3. I and my colleagues rely on government grants

            Bullshit. You could get private sector grants, its just harder and comes with more (or at least different) attached strings.

            1. I’ve worked in the private sector. They expect results.

            2. If you can find a privately funded cutting-edge research telescope, I’d love to apply for time on it.

              1. Figure out how to monetize your research and then ask the Kochs for the funding.

                Like I said, getting the grant is a bit harder.

              2. Also, get my income tax rate lowered to zero, and I will happily donate to a pure research organization.

                It might not be an astronomy one, but others will fund it.

                1. I think a system resembling patronage is probably the only way to go because not all basic research can really be monetized, at least not without creating a whole host of other problems regarding IP and patent law.

                  1. Patronage is monetizing, in a way.

                    They are getting the value of being a patron for their dollar. Patrons arent concerned about profit but reputation.

                  2. At my former university we had a patron for our math department, Jim Simons, who used to run the department and then left to start one of the most successful hedge funds. Now he routinely spends hundreds of millions of dollars on basic research in math and physics. He also retired from the hedge fund and is back as a prof.

                    1. One more link, in case you’re actually interested in applying for a grant from his foundation:

                    2. I am genuinely interested and I will keep an eye on that. Thanks for sharing.

        4. Pretty much any government job now has a contractor counterpart. You want to fly fighter jets and spacecraft? Go to an aerospace company and be a test pilot.

    3. A GS-13 job for me would be a $20k/year raise, so I would do it for the money.

      1. No “true” professional would get a $20k/year raise moving to a GS-13 position. 😉 See how I left myself a way out?

  2. I noticed that those from my high school class that went into government office jobs (ei. not police work), tended to be those who kept their heads down, did what they were told, and graduated with solid B averages. The geeks, jocks, class clowns, trouble makers, etc. didn’t go into government office jobs, just the boring kids.

    Perhaps it’s just my selective memory, but it seems to me that a government desk jobs attracts certain personality types.

    1. Stop bullying them!

    2. They do. I was a GS for a while (escaped while still sane). Went through several leadership classes where we did personality assessments. If you’re familiar with Meyers-Briggs, 75% of the class I was with were ISTJ’s. Otherwise known as people who keep their heads down, do what they’re told, and graduate with solid B averages. The other 25% were mostly slight variations of that general theme.

  3. I had an admin who couldn’t use a computer. whatever she was making, she was overpaid.

    1. John: I don’t think that’s true.

      Jen: With all due respect John, I am the head of IT and I have it on good authority that if you type “Google” into Google, you can break the Internet. So please, no one try it, even for a joke. [the executives laugh] It’s not a laughing matter. You can break the Internet.

      1. Sadly, the head of IT is appointed. Half* of our job is to talk them out of stupid Ideas before they make promices to the commission level idiots we can’t keep.

        *not a literal 50%.

  4. The adjustment for education is where the real bullshit takes place.

    There are a HUGE number of utterly superfluous Master’s Degrees and PHD’s in government service.

    Often, the advanced degree is obtained after the hire. In other words, they didn’t really need the degree to perform the job; they obtained the degree on the government’s dime merely in order to get a pay raise.

    Eliminate the education “adjustment” and compare position-to-position.

    1. Even if you do that, the big gap is in the lower positions. Look at the following pay scale for Washington DC…..le/dcb.pdf

      A new hire GS 9, which is basically the grade of the higher end secretaries makes $51K a year. That is a lot of money for making copies and setting someone’s schedule and more than what someone makes in the private sector even in DC.

    2. I think the point of the article was that it’s not always worth it to go through the trouble of getting the degree if you’ve already got a government job since the raise will be small and the comparative advantage will be even smaller.

    3. My buddy got hired by a certain regulatory agency that will go unnamed with a master’s. They are paying for him to get a PhD, but once he is done he will effectively move into a new position, with different responsibilities. He also gets locked into a 12 year contract (4 years for each year of school).

      1. My neighbor’s aunt’s uncle’s boyfriend makes 42 bucks an hour on the internet. Last month he made 355,000 working a few hours in his spare time. Oh wait, that was spam.

    4. Definitely not. Federal lawyers indisputably make less than private sector ones. I’ve been on both sides and my pay has always been far higher in the private sector, whether at a firm or in-house.

    5. There are a HUGE number of utterly superfluous Master’s Degrees and PHD’s in government service.

      I know a guy who got a MPP – working for the FL Department of Corrections.

      1. Masters in Prison Policing?

        1. Masters in Product Placement, duh.


    In other words: A disaster. What’s needed is a much more forceful, much more statist approach to forced savings whether that’s quasi-savings in the form of higher taxes and more Social Security benefits or something like a Singapore-style system where “private” savings are pooled into a state-run investment fund.

    1. Right, because we can’t have any system that allows people to invest their money and make more than others.

      1. What we need is A COLLECTIVE SAVING ACCOUNT. You can earn as much as you want, but it all goes into one single account for society as a whole and anyone can withdraw any amount they need at any time.

        1. What we need are UNLIMITED SAVINGS ACCOUNTS (USA). There’s no limit on how much you put into them, you pay no taxes on the investment gains and dividends and interest, and there are no restrictions on when you can withdraw the money or for what purpose.

          Which is pretty much what we had before the income tax was enacted in 1913.

          1. On the wrong path, all WE need to do is print eveyone a 1 billion dollar bill (dr. evil grin) and give it to them at the comfortable retirement age of 29. Solved.

    2. Fuck Matt Yglesias. I knew these sons of bitches couldn’t keep their hands off my money. Every example cited of “what’s wrong” with 401k’s, I can personally supply a counter example. The events in Cypress were just a practice run for what these motherfuckers have in store for the USA. Fuck them, and their shills like Yglesias.

      The comments to that article are depressing as shit.

      1. Did I not call them coming after 401k’s? Any money “sitting around” is going to get on their radar. It’s how they think. Because it’s not your money. It’s “society’s” money. You didn’t earn that.

        1. Shit. My parents are frugal people who have done well for themselves. Despite being Republicans and reflexively pro-government, they will take the necessary distributions and burn the piles of cash to warm their home before they let the government take it from them. Looks like my kids are going to community college because the gummint is going to steal their inheritance money.

        2. You could see that coming a mile away. They can’t squeeze anymore money out of income taxes since people can dodge those. They do pay some attention to Europe and have noticed that if you raise taxes too high people just stop paying and the whole system falls apart. For that reason they are having to move on to just outright stealing of assets they know currently exist.

        3. I rolled my 401K into a self-directed IRA so Im safe, right?

          Uh, right?

          And people think I was paranoid about Roth IRAs?

          1. I never believed in Roth IRA’s for a minute. What they do is is just tax social security based on your outside income. So you are going to pay taxes on that Roth. They just don’t take it out of that money but take it out of your social security.

            And I hate the whole concept of an IRA. it is the government making you pay mother may I with your own money. Oh sure you can have this money but if you ever try to use it before we say you can, fuck you we are taking a huge penalty. Oh, your kid got cancer and you need to pay the medical bills with that money? Fuck you pay me. Oh you lost your job and need to use some of that money to live? Fuck you pay me.

            1. But people call me crazy for doing most of my saving in the form of old coins made of silver and gold.

              1. I try so hard to not be a gold bug. I want to invest in growing, productive enterprises.
                But I know they (filthy statists) will steal anything. 401k’s and IRAs are easy targets. My pile of silver and gold are harder but they’ll come for them if they have to.

        4. Not to pile on the paranoia, but I went back to school a few years ago to complete my Finance degree. Almost every day in my classes, the professors were stressing that in the near future, there would be a high demand for financial planners. The scenario they were promoting seemed out of step with the marketplace. At the time, I thought the only way there would be that much demand for CFP’s would be for returning Iraq/Afghanistan vets planning to invest their earnings/bonuses/GI Bills. I’m starting to get the sinking feeling that there is a growing push for confiscating 401k’s, IRA’s, and private pensions. There will be a whole lot of CFP’s employed by the government to manage these consolidated accounts. My professors could see the writing on the wall in 2010. Paranoid, right?

          1. There will always be a way to get out of it. Congress is too corrupt to steal everyone’s money. There is too much money to be made in selling opt outs for them to ever pass a blanket confiscation.

            That will be a boon to the planners who will be able to help those wealthy enough and smart enough navigate the regulations and avoid the confiscation.

      2. Fortunately, Yglesias is not in charge of anything and people in congress are not suicidal. I think that a majority of people know full well how badly Social Security is fucked up and will not reelect people who voted to confiscate their savings. I’m going with that for now.

        1. The majority of people said they were against the TARP giveaways too, but then voted to reelect pretty much everyone who passed that.

        2. The problem is that Yglesias is tapped to some extent into the social cabal of political power elites in DC. If he’s shilling this, it’s because he’s been hearing them chatter about this around the cocktail circuit.

          And it’s not like it’s any big surprise. We spent over a trillion last year for Medicare and Medicaid, but only took in about $200 billion in taxes dedicated to those programs. There’s simply no taxation scheme short of a Cyprus-style skimming that would come near to closing that kind of gap, and even them I’m skeptical it would work.

    3. It amazes me that someone could be as stupid as he is and manage to live on their own. The things he routinely writes are so stupid that I have a hard time believing he is not somewhere on the mental disability scale. Then I see a picture of him and am amazed he can feed and clothe himself without assistance.

      A state run investment fund is also known s communism. Investing is another term for owning. Once the government started investing money in the amounts that a state run system would entail, the government would quickly own much of the economy. And of course would then use that power for every nefarious political purpose one can imagine; investing in loser entities to pay off cronies, forcing good businesses to become bad businesses in the name of political correctness, buying out and liquidating politically unfavorable companies like gun makers and so forth.

      Wow is Yglesias an evil idiot.

      1. But Ayn Rand was crazy paranoid. That kind of stuff could never happen here.

        1. When I was a kid I read Atlas Shrugged at the suggestion of my father. He told me that her writing wasn’t that great and her philosophy a little suspect but she was an amazing social critic who really understood how people think and what society would look like if liberals ever got to take their thinking to its logical end.

          At the time I remember thinking that my dad was mostly right but I didn’t really believe that she understood how people think. I thought her characters were too cartoonish to be real. Now that I am older I realize my dad was exactly right. I just thought those characters couldn’t be real because I hadn’t been around long enough to understand just how craven people actually are.

          1. She really did understand the thinking and motivations of the collectivists.

            1. Yup. For a long time I didn’t believe it. But she has them down perfect. Liberals just hate her writing and call her characters straw-men because they portraits are so accurate.

              1. They are straw men, but it turns out liberals are made of fucking straw.

                1. If they only had brains.

          2. She got the government moochers right, but not the Gulchers. People would rather earn a billion dollars and pay 50 percent of it in taxes than to earn ten million and keep all of it.

            1. Well to be fair, that was the whole point of John Galt. He had to go around persuading the strikers that being allowed by their oppressors to keep a share of what was all rightfully theirs was a mistake.

          3. I envy that your dad introduced you early. I had my kids read Anthem, quick read, individualism distilled. My red team roots cause me to sometimes spew collectivism like a tourettes vocal tick. Indoctrination runs so deep, sometimes recognizing a collectivists meme will escape me.

            1. My parents were very interesting and free thinking people. They never totally fit into any particular box. I consider myself to be an inferior copy.

      2. no no no, we just need to put proper regulations on it and make sure the best and brightest are in charge like with The Federal Reserve or the CFPB or The Treasury or the FCC or…

        1. We will just create a bi partisan blue ribbon commission to run the investment fund. What could possibly go wrong?

          1. Chris Dodd, Barney Frank and Henry Paulson probably have the free time.

            1. What about Jon Corzine?

      3. Yglesias seriously looks like Frodo and Sam’s lovechild.

        He’s not dumb, he’s just a very obvious shill for statist pharisaism designed to exploit weak-kneed SWPL sensibilities–a Squealer, if you will.

    4. God, what a dick.

      I think that the biggest problem is that people don’t seem to want to accept that if you plan to live to 90, you probably can’t retire at 65.

      1. That and that if you want to retire you are going to have to forgo some income and standard of living now.

        1. If you pay off your fucking house, you should be able to take a pretty serious cash flow hit without a problem. I could live on 50% of what I make now if I wasn’t paying off a house and consumer debt.

    5. “state-run investment fund”

      So, Communism?

    6. Along with the straw and class warfare the author tossed in a healthy helping of bad financial advice. Don’t even check on your investments. Ummm, really Mr. Madoff?

    7. Holy shit. He cites Tom Friedman as an authority. Tom. Friedman.

  6. If someone who never set foot on a college campus manages to land a federal job, his marginal reward for acquiring further credentials is exceptionally low.

    Yeah, there’s not much incentive at all to get more education if you can just build on the GS-4 gig you got right out of high school or during college. You don’t need a master’s degree to get step promotions.

  7. The salaries don’t even matter. If you have ever had the misfortune of working with the government (my personal experience was a contract with the NYC DOT), you see that these workers do almost nothing at all, are uniformly incompetent and/or lazy, are completely occupied by political and ladder-climbing concerns, and have zero accountability. Salary issues don’t even begin to scratch the surface of what’s wrong here.

    1. There is lots of accountability. Try getting in the way of the wrong person’s ladder building or empire building and you will find out how accountable things are real quick.

      It takes a bit to figure out the bureaucracy. What is going on is that the entire organization exists to justify its existence and make the people who run it look good and feel important. Since the point of the organization is for appearances and not to do a job, filling a chair and doing nothing generally doesn’t get in the way of the goals of the organization. What gets in the way is employees asking questions or thinking too deeply about the job at hand. That kind of thing is crushed. Meanwhile, anyone who buys into the appearances and works hard to make the organization bigger and seen as more important, is rewarded.

      1. It’s almost funny to see contractors get spanked for having free time by bored federal workers who have nothing better to do than snoop on the contractors.

        1. You mean the federal employees who hire the contractors to do government functions that are not supposed to be contracted?

          Hiring contractors is such a boondoggle. Not only do I get to hire someone to do my job for me, but also in doing so I am able to reward my friends and or set myself up for a high paying job when I leave the government. What is not to love?

        2. I knew I was entering a new world on my first state government contract when the owner of the consulting firm called me into his office on my first day to tell me not to (a)read the newspaper at my desk or (b)wear jeans — even if it was casual day. I was concerned by (a) because I assumed that meant I wouldn’t have the Internet at work. I spent my last six weeks at that job doing literally nothing by order of the state employee manager.

          1. As a contractor I may only do that which has been specifically authorized by some stupid CCB committee. They don’t authorize much. So I kill time here.

      2. You’re just saying what I’m saying, John. When I use the term “incompetent”, I mean “at the job they were supposedly hired for”. They can be plenty competent at climbing the ladder or getting more money for their department. But that’s not what their job supposedly is, though yes, that is what it is in practice.

        Basically, what I saw was a workplace where even basic competency at the job they were supposed to do was discouraged and punished.

        1. The bottom line is:

          In government work, there is no bottom line.

          It doesn’t take folks long to realize that how well they do their job has nothing to do with progression or pay.

      3. I had a friend/former colleague who wanted to apply for a Fed Gov job. The job was billed as a position that would analyze web metrics and make recommendations for new programs and outreach. Something very typical in the private sector in any marketing department.

        She got the job, and I warned her that the government was a different animal, and they were not motivated by profit or even “doing a great job”. Their only motivation was stature and funding.

        She lasted a year.

        1. The days that I most enjoy and am out actually providing legal advice are also the days I am most likely to do something my bosses don’t like. The days I post on Reason and copy edit various things and answer basic questions to my clients to keep them out of trouble are the days I probably help my career the most.

          It took me a long time to figure that out. I used to really take pride in asking hard questions and saying what everyone was thinking but didn’t want to say. All that ever did was ensure that they stopped inviting me to meetings.

          1. My friend could not understand why her ideas kept getting shot down. I tried to explain to her that they would require the higher-ups to stick their necks out too much. She would argue that the data showed that X program was a good idea. I told her they didn’t understand data, no matter how simply presented. She just refused to listen to me or believe me until about 9 months in.

            1. It is not that they are stupid. I don’t think my bosses at least are stupid. It is that they are just such small people who are so driven by events and fears. The idea that there might be more to life than going along and doing whatever it takes to get ahead never occurs to them. And like all people they are wonderful at rationalizing their actions.

              Someone like you or I would have a pretty good time raising some hell and shaking things up if we were ever in a really top position. And the fact that we would have the courage and imagination to do such a thing makes it highly unlikely we will ever get there. The people who get to that level have almost a feral sense of people who are willing to think for themselves or might be willing to not take orders if something bad happens.

        2. She got the job, and I warned her that the government was a different animal, and they were not motivated by profit or even “doing a great job”. Their only motivation was stature and funding.

          The wife-unit kept bugging me to get a gubmint job, so I could get the sweet, fat bennies and the job I could never lose.

          I told her that I would probably last 2 weeks before bringing a gun into work, dealing with all of the sloth, ass-covering and red tape.

      4. “What gets in the way is employees asking questions or thinking too deeply about the job at hand”

        that’s why I didn’t last. and it wasn’t even stuff of anything important. just “we could be slightly better if”

        1. I am the negative opposite of that. I tend to say “that is probably not something we want to do, it wouldn’t accomplish anything, would be embarrassing if the media got a hold of it, and might actually undermine some of the productive things we are doing”.

          That is called not being committed enough to get to YES.

          1. This is the area where being a contractor is best. We just do what the gubmint assholes tell us to do. We often tell them that X or Y is a bad idea, but ultimately the bureaucrats decide whether we go ahead with a project or not. I’d say about 40% of our projects are ill-considered and useless. But that’s on the bureaucrats’ shoulders.

  8. The gap between private and public sector compensations for people without college degrees are just reflective of the objective superiority of the uneducated lumps in government service.

    A government worker with a GED is the productive and intellectual equivalent of six people with PhDs employed in the private sector. So quit your whining.

  9. …”Federal workers with professional or doctoral degrees actually earn 18% less than private sector counterparts.”…
    They do it out of a sense of duty! Or, the private sector doesn’t hire people with a doctorate in “Grievance”.

    1. They do it for the fewer hours and the job security. Life at a government lab free from having to constantly troll for grants to keep your research going isn’t such a bad deal. It is if you are a real star and can make upper six figures. But if you are an average PHD who would normally spend their career living from lab to lab and grant to grant, a GS position is a pretty good deal even if it does pay less.

  10. And here we were told that govt positions paid more due to unique experience. Seems like the opposite is true, the less experience you have the more the government will overpay for your services.

    1. “She has a double PhD. One in lesbian dance of the Levant, and one in Mongolian labor history. No one else has drawn the connections she has between the plight of Jordanian dykes and the struggles of the trade unionists of Ulan Bator.”

      1. Good lord I have been laughing at this for the last hour, I have to try hard to think of something else

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