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Smart idea? Index Federal worker salaries to the private sector

Posting in Government

Federal salaries for civilian workers are exploding during the recession and the math doesn't add up. A simple indexing of government and private sector salaries could be the fix.

The Federal employee salary math isn't adding up.

Last week, USA Today reported that Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

Meanwhile, the Transportation Department had one person earnings $170,000 or more when the recession started. Now there are 1,690 employees making that much. The average federal worker's pay to $71,206, compared with $40,331 in the private sector.

The USA Today report is based on data from the Office and Personnel Management. The White House, Congress, the Postal Service and intelligence and uniformed military personnel are all excluded. The data would be interesting with those branches of the government included perhaps it would all balance out as overpaid Congresspeople offset underpaid military folks.

What's wrong with this picture? Taxpayers foot the bill for these Federal employees and the fortunes of private sector workers and their government counterparts should be aligned. Your budget is tight so why would you be handing out raises like candy in a recession.

The solution: Index government salaries to the private sector. There's no way that a government employee---who has a foolproof pension since taxes can always be raised or money printed---should earn more than the private sector schlub who's paying him. In fact, I'd argue that civilian government workers should work at a discount since they do get that foolproof pension.

The USA Today notes that the federal salary jumps were due to pay hikes, a new pay system and the lack of paycaps. That new pay system should be revised already to something more indexed to private sector realities.

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Larry Dignan

Editor-in-Chief

Editor-in-Chief Larry Dignan is editor-in-chief of SmartPlanet and ZDNet. He is also editorial director of TechRepublic. Previously, he was an editor at eWeek, Baseline and CNET News. He has written for WallStreetWeek.com, Inter@ctive Week, New York Times and Financial Planning. He holds degrees from the Columbia University Graduate School of Journalism and the University of Delaware. He is based in New York but resides in Pennsylvania. Follow him on Twitter. Disclosure