Federal Pay Outpaces Private-Sector Pay

Compensation for the federal government’s 1.9 million civilian workers in the executive branch costs almost $200 billion annually, says Chris Edward, director of Tax Policy Studies at the Cato Institute.

Federal wages and benefits have been rising quickly, and by 2004 the average compensation of federal workers was almost twice the average in the private sector.

In the conclusion, Edward says that in the near term, Congress should restrain federal compensation by freezing federal wages for a period of years and examining fringe benefit programs for possible savings. In the long term, the coming surge in federal workers retirement as baby boomers enter their sixties offers an opportunity to downsize federal agencies without problematic layoffs or buyouts.

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