Good times for government workers as pay outpaces private sector

Government workers in the Washington area are increasingly being paid more than employees in the private sector.

Compensation for government workers grew about 55 percent from 2001 to 2008, while pay for private-company employees rose 40 percent, according to data from the U.S. Bureau of Economic Analysis. The average compensation for local workers grew about 45 percent.

“Everyone knows that it’s impossible to fire federal workers, just about,” said Dan Mitchell, a senior fellow at the Cato Institute, a libertarian think tank. “That, to me, is slam-dunk evidence that federal workers are overcompensated.”

State and local government employees also are earning more. Private industry workers earned an average of $25.11 an hour, while state and local government workers earned $29.99 an hour, according to local data from the Bureau of Labor Statistics taken from August 2008 to October 2009.

The BEA data include pay for government — federal, state, and local — and government enterprises, which include the Postal Service and local transit authorities.

Not only does the federal government pay well, but it’s hiring — a rarity nowadays. The government hired 13,000 more workers last month than a year ago, while the Washington area as a whole lost 34,200 jobs over the same period, saidStephen Fuller, director of George Mason University’s Center for Regional Analysis.

The February unemployment rate was 7.7 percent in Maryland, 7.2 percent in Virginia, and 11.9 percent in the District.

The Washington economy has long been based on a strong federal sector. The federal government’s growth is “countercyclical,” in that it tends to grow during hard times while the private sector shrinks, Fuller said.

“The federal government continues to expand, and a lot of the expansion is local,” said Andy Bauer, regional economist for the Baltimore branch of the Richmond Federal Reserve.

Under the Federal Employees’ Pay Comparability Act of 1990, annual pay raises for federal workers are based on private-sector compensation.

But state and local governments are shrinking, and public-sector hiring is little comfort to those who have lost their jobs. Year-over-year, area state and local government lost 12,000 jobs in February, Fuller said.

“There’s cuts all over the place, from human services to libraries,” said Anita Baker, chairman of the Fairfax County Employees Advisory Council. “What it results in is people losing their jobs.”

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