New Study Finds that Government Workers “Earn” 78% More than Private Sector Workers!

A new study undertaken by the libertarian think-tank the Cato Institute has found some stunning statistics that might upset most Americans. According to their research, the data from the Bureau of Economic Analysis indicates that the average federal government employee “earns” an average of 78% more in total compensation than their average private sector counterpart!

Factoring both salary and benefits, Edwards pointed to BEA data showing the average federal employee earns about $119,000 annually, compared to the private sector worker who earns $67,000 per year. When comparing just salaries, feds collect 50 percent bigger paychecks, Edwards said.

The wage gap between the federal and private sectors has grown since the 1990s, Cato’s director of tax policy studies found. The divide has doubled since 1990, when it was just 39 percent. The growth, he said, came from not just raising pay levels and offering more generous benefits, but also a more “top-heavy” bureaucracy that routinely moves employees into higher salary brackets and redefines jobs as higher earning positions.

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moneyhat2“The federal government has become an elite island of secure and high-paid employment, separated from the ocean of average Americans competing in the economy,” Edwards wrote in his findings.

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Robert Goldenkoff of the Government Accountability Office (GAO) tried to limit any public backlash by telling the Government Executive that he’s unsure that Cato’s study uses the proper methodology in its comparison.

“I want to stress the importance of comparing apples to apples. Federal employees tend to be better educated and work in jobs that require higher skill levels compared to non-federal jobs, so Cato’s results comparing average wages of feds to other sectors are both not surprising and don’t tell the whole story. More rigorous, sophisticated analysis is needed.”

However, in recent years there have been a handful of major studies on the subject (including Cato’s), and 7 of the 9 studies found that there was a large pay gap (in the favor of federal workers) between federal and private workers.


Perhaps the most troubling aspect of this relationship is the problem of influence. Over the last couple of decades, Washington, D.C. (and Northern Virginia) has become a haven of liberal politics with more and more liberal workers flocking to government jobs in D.C. This imbalance (as most conservatives don’t often dream of one day working for the federal government) has led to a disturbing trend of politicization within the civilian sectors of the federal government (think IRS scandal and the failure of the Justice Department to pursue cases against prominent liberals). Moreover, this trend shows no sign of getting better because the federal employees have grown into a powerful and important special-interest group.

Cato’s Chris Edwards explains, “Federal workers are a powerful special-interest group, and they are effective lobbyists. Federal unions actively oppose legislators who support restraining worker pay.”

Edwards also notes that these inflated salaries are not just for top-level executive officials, but for federal workers at every level. Along with the inflated wages, federal workers enjoy much greater levels of job security and benefits than their private sector counterparts, which is why federal employees quit at a far lower rate than other sectors.

“In the past, there was a view that it was a privilege for citizens to serve the public in a federal agency, and that federal pay should be fairly modest. Unfortunately, that sort of thinking has gone out the window as the federal compensation advantage has continued to increase,” Edwards added.

Even if Cato’s numbers are a bit on the high side, this kind of imbalance is a major issue. Our tax dollars fund these departments and pay these employees salaries, and we are being gouged. We should be up in arms, demanding that our representatives bring federal employee wages in line with wage levels in the private sector. If federal employees are “only” making 20% more, cutting their wages and benefits by 20% would go a long way to helping solve our debt and funding issues.

It is madness to pay our employees such inflated wages. This is part of the reason that our government has become such a cesspool of waste.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by

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