2. The Reality: The public sector continues to grow in numbers and government
employees continue to earn more than their private sector counterparts. The
government fails to understand that an over‐stressed private sector cannot continue
to subsidize a bloated bureaucracy.
Fact 1: Public Sector Far OutEarning the Private Sector
According to the Commerce Department’s Bureau of Economic Analysis the average
wage disparity between federal and private sector workers was approximately
$60,000. When we take state and local public employees into account a similar trend
emerges. Data compiled by the Cato Institute Xinds that,
“The average compensation in the private sector was $59,909 in 2008,
including $50,028 in wages and $9,881 in beneXits. Average
compensation in the public sector was $67,812, including $52,051 in
wages and $15,761 in beneXits.”
A job‐by‐job comparison also reveals the startling pay difference between the public
and private sector. In fact, in 83% of comparable occupations, federal salaries exceed
private sector pay. Consider a sampling of data provided by the Bureau of Labor
Statistics and compiled by the USA Today:
JOB FEDERAL PRIVATE DIFFERENCE
Broadcast Technician $90,310 $49,265 $41,045
Civil Engineer $85,970 $76,184 $8,876
Computer Specialist $45,830 $54,875 -$9,045
Dental Assistant $36,170 $32,069 $4,101
Financial Analyst $87,400 $81,232 $6,168
Landscape Architects $80,830 $58,380 $22,450
Machinist $51,530 $44,315 $7,215
Paralegal $60,340 $48,890 $11,450
Public Relations Mngr $132,410 $88,241 $44,169
Secretary $44,500 $33,829 $10,671
Surveyro $78,710 $67,336 $11,374
A weekly publication by the College Republican National Committee. Copyright 2010.
3. Fact 2: Public Sector Pensions are Bankrupting Many Governments
A recent survey by CareerBuilder found that “[m]ore than seven‐in‐ten (72%) of
workers over the age of 60 who said they were putting off their retirement are doing
so because they can’t afford to retire.” But while the private sector struggles, many
public servants are spending their golden years very comfortably. Consider:
• Four‐in‐Xive workers have lifetime pensions, compared with only one‐in‐Xive
in the private sector
• On average the public sector receives $13.65 worth of beneXits per each hour
they work compared to $8.02 dollars for private sector workers
• Public sector workers can generally retire earlier ‐ usually age 55 ‐ and still
qualify for up to 90% of their income in pension
• The average public pension plan is 35% underfunded
The public pension problem creates a huge economic burden on government. For
instance, some towns in California such as Vallejo and Desert Hot Springs, have been
forced to Xile bankruptcy due to the inability to pay the cost of employee pensions.
The cost of California pensions, have grown from $150 million per year to over $3
billion per year in just the last decade ‐ a 2,000% increase.
This is not a California speciXic problem. Orin Kramer, chairman of New Jersey’s
INvestment Council, who has studied the problem, Xinds that the total unfunded
liability of the nation’s public pension could be as large as $2 trillion. Some would
say even this huge Xigure underestimates the problem. Joshua Raugh, professor of
Xinance at the Kellogg School of Management at Northwestern University says that
“our calculation is that it’s more like $3 trillion underfunded.
Fact 3: Young Adults Will Be on the Hook for the Governments Excesses
Governments are refusing to face up to the economic realities of a huge bureaucracy.
Given the data it appears that the federal government is paying well‐above that
which is necessary to compete with the private sector for skilled labor. Moreover,
despite the economic downturn which has caused a massive decrease in tax
revenue, the government keeps on hiring and spending. As Michael Barone recently
wrote for the Washington Examiner,
“While the private sector has lost 7 million jobs, the number of public‐
sector jobs has risen. The number of federal government jobs has been
increasing by 10,000 a month, and the percentage of federal
employees earning over $100,000 has jumped to 19 percent during
the recession.”
A weekly publication by the College Republican National Committee. Copyright 2010.