Federal employee compensation is fair and competitive, not excessive as some have charged according to John Berry, Director of the Office of Personnel Management (OPM). Testifying earlier this month before a subcommittee of the House Oversight and Government Reform Committee, Berry said that misleading comparisons of federal and private sector compensation make it more difficult to hire qualty employees for the federal government and “undermine the efforts of dedicated hardworking men and women who serve their country,”
Berry disputed claims that federal employees’ average compensation is much higher than that in the private sector. He pointed out that “raw comparisons of average pay between federal and private sector employees mask important differences in the skill levels, complexity of work, scope of responsibility, size of organization, location, experience level, and special requirements, as well as the exposure to personal danger.” He reiterated the argument he has made before that half of federal workers are in the nine-highest paid occupations (e.g., scientists, judges, and engineers), compared to less than one-third in the private sector. He contrasted this to figures showing that 20 percent of private sector workers are in the four lowest-paying occupations (cooks, janitors, and manufacturing workers), while less than eight percent of federal workers perform these tasks.
Berry responded to charges that the size of the federal government has grown too large. He pointed out that in 2009 there was one federal employee for every 147 residents compared with one for every 78 residents in 1953. He also said that the federal workforce has changed its nature and composition in the last forty years. It has moved to higher skilled workers and less concentrated in commercial-like activities. Today, only one-tenth of federal workers are in blue-collar jobs, compared to one-third forty years ago.
He also maintained that federal employee benefits are competitive, but not overly generous when compared to those in the private sector. Federal employees pay 30 percent of their health care premiums, 100 percent for optional vision and dental benefits, and 66 percent of their life insurance basic premiums, he said. He acknowledged the difficulties state and local governments are having meeting the financial requirements of their employee pension systems. But, he said the federal government made reforms in the employee pension system 25 years ago, principally moving to the Federal Employees Retirement System (FERS), to address these problems Since 1983, all newly enrolled employees are required to be enrolled in FERS, which is based on a basic “defined benefit,” social security, and participation in the Thrift Savings Plan (TSP).
Even so, Berry said the Administration believes that federal employee hiring and pay systems need reform. He cited changes underway in the hiring process and highlighted improvements that have already been made: 1) moving to a resume-based application process, 2) reducing the length of job announcements, 3) reducing hiring time, 4) and increasing the hiring of veterans. Referencing the President’s Pay Agent Report, he said reforms to the federal white-collar pay system should be considered. One concern Berry mentioned is the requirement that sets a single percentage pay adjustment for all federal employees in each local pay area. He indicated that differing labor markets for occupational groups should be considered when setting these adjustments. He also said that they should reexamine the model and methodology for estimating pay gaps between the federal and non-federal sector.