Federal Salaries: Myths, Misperceptions and Reality

Readers questioned the data on federal employee salaries in a recent article. Here is more information on what goes into the data and why the information generates interest among readers.

Last week’s article on federal salaries was spurred by a comment from a reader who questioned a salary figure for federal employees used in an earlier article. The reader’s comment reflected a common but incorrect belief about federal salaries so the article had potential to be of interest to readers.

I did not anticipate the article would be controversial because pay statistics are compiled by the Office of Personnel Management (OPM) each year. The article displayed some of the more relevant data on pay and addressed frequent misconceptions about pay for federal employees.

One reader summed up the reaction this way: “From the comments posted regarding this article, it appears that the author has struck a nerve…It may not have been intention on the part of the author but he may have accidentally hit a hornets nest.”

No doubt, there are a variety of reasons for the strong reaction. Having read all the comments, including some that were not submitted for posting, here are several possible reasons for the reaction.

First, there is a wide disparity between jobs and wages in several large cities–especially Washington, DC–and the tens of thousands of federal employees working in small towns and rural areas across America. If you are working in one of these areas, you probably do not get a locality pay adjustment and your job may be graded lower than jobs in larger cities. The salaries in these areas are obviously less than the national average.

Second, there is a common belief, hammered home relentlessly in press releases and public statements, that federal employees receive significantly less money than workers in the private sector. That is no doubt true in some jobs and in some geographic areas. Nevertheless, the average federal employee makes a lot more than the entire household of the average taxpayer. The OPM data vividly makes that point.

That does not mean that federal employees should not get a raise or that some federal employees are underpaid but seeing the data makes some people uncomfortable, mad, or perhaps muttering in a state of disbelief.

Third, some readers are not happy when they see that they make less than the “average” federal employee. No one wants to be average and the nature of the federal workforce leads to a lot of feds making a great deal of money. That still means that tens of thousands of federal employees are making less than others.

Fourth, some political leaders, often those from states or districts with small numbers of federal employees, argue that federal employees should not get a pay raise. The OPM data can be used to support that argument in Congress or within the administration. Federal employee unions are often leading the yearly drive for more pay for all federal employees. Some of the OPM data will make that job more difficult. Some taxpayers think the federal workforce is overpaid. One can reasonably expect some of the OPM data to buttress that belief.

Finally, as the Department of Labor noted in the quote below, the federal government employs more managers and professionals than most employers. That also drives up the national average for all federal salaries.

Some readers did not like the information and assumed that it reflected a political agenda to hold down salaries, included fringe benefits, included too many highly paid employees, etc.

Sampling of Comments

Here is a sampling of comments:

I’ll bet if you just took the nurses salaries – which comprise the largest part of the hospital workforce – out of the mix, you’d come up with a considerably lower average.

Someone is full of baloney!

Well someone is sure feeding us some BS. Even when I worked in the gov, only the GS 12 and above made that kind of money….But one has to do what one has to do to convince people that we need to do away with the current system.

Where I work nobody makes that kind of money. This figure is being used to try and support Bush’s 2.1% instead of the 3.1% raise…. I’m not sure where your figures are coming from….

An “average” is just a statistic, and there is more than one way to come up with an average.

  • I assume this inflated figure…includes fringe benefits (FEGLI and TSP portion paid by the govt, etc.).
  • This is typical–the use of outdated/selective information is frequently used to support a position when convenient.
  • Of course the average for Feds is high when you consider that SES, Congress people are included as Feds and all those people in Washington, DC positions.

First, not that OPM needs defending (author’s disclosure: I used to work for an OPM training center as a federal employee), but OPM’s figures are just pages and pages of data, compiled by OPM each year, and made public for any citizen, politician, or web browser to read. It is presented in a dry, straight-forward, bureaucratic way just as most agencies compile and present data.

It is not a politically inspired document. It is probably compiled on the theory that America’s taxpayers have a right to know how much they are paying federal employees when they pay taxes–if they are curious and savvy enough to find it. That does not mean the data will not be used by politicians on all sides for politically inspired reasons.

Second, the salary data does not include fringe benefits. It does not include members and employees of Congress, the Congressional Budget Office, GAO or the Postal Service. The salary data is straight-forward. OPM uses “adjusted basic salaries” which is an individual’s annualized base pay plus any locality pay adjustment. It does include the large number of federal employees in the Washington, DC area.

That’s it. No fringes, no smoke and mirrors, just data compiled and tallied on the agency’s computer system.

The average federal salary for 2004 was $60,517. Obviously, the 2005 figures (the salary federal employees are receiving this year) will be higher when the next figures are compiled and published.

The mean salary for all federal sector General Schedule employees (again last year) was $59,593.

The average grade is 9.8870 and the median grade is 11. Several readers questioned the data because no one makes the average federal salary in their offices. That is certainly true for some offices. But here is an observation by the Department of Labor (based on 2002 figures, not 2004, but the figure is certainly still reasonably accurate) “About 3 out of 5 Federal workers held managerial, business, financial, or professional jobs in 2002, double the proportion for the workforce as a whole.”

In other words, the federal workforce employs a lot of higher graded and higher paid people than most companies in the American workforce. It would not make much sense to leave out, as several readers suggested, some of the higher paid federal employees to arrive at an “average” figure because so much of the workforce is highly paid.

There is also a belief among some personnel officials that federal employees in Washington, DC and some other federal cities are graded higher than in other areas as a way to entice more people to move to a headquarters job. Whether for this reason or because the jobs in Washington are more complex, the cost of living is higher and the more complex work justifies a higher salary, there is no doubt that salaries in the DC area are higher than most of the country.

The average grade in the Washington area is 11.7226 and the mean grade is 13—considerably higher than for the US as a whole. That does drive up the average for all federal employees, including those working in small towns in rural America where the federal salaries are much less than in large cities, just as the lower salaries drives down the national average.

So there is a very quick rundown of the 2004 salary data. OPM has compiled lots of charts readers can use to study themselves if they wish to do so.

Thanks to the many readers who took the time to send in their thoughts and observations on the article. It certainly makes the site more interesting reading for the federal community.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47