Goldilocks and Federal Employee Pay

Are federal employees overpaid or underpaid relative to the private sector? The author says the answer is not as simple as answering this one question.

There is a lot of talk in the news and on Capitol Hill regarding federal pay and benefits.

Regardless of your point of view, you can find someone to agree with you. Federal employees are grossly overpaid. Federal employees are terribly underpaid and need a huge pay raise. Federal employee benefits are too generous and should be reduced. Federal employee benefits are not good enough.

Somehow I feel like I have walked into the federal version of Goldilocks and the 3 Bears and people are treating this discussion like the porridge in the fairly tale. Is it too hot? Is it too cold? Is it just right?

It’s Not That Simple

I wish federal pay issues were as simple as many of the folks engaged in this debate pretend that they are. If that were the case, it would be much easier to decide what the truth is.

But – we have 2 million federal employees in 400 job series ranging from trade and craft jobs, clerks and entry level workers, to senior professionals, world-class scientists, and people who do vital work that is unique to government. They are located in every state and around the world. Declaring that such a vast and complex workforce is “overpaid” or “underpaid” may be a good way to please partisans, small government advocates, employee unions, and other groups, but it does not serve the cause of accuracy and fairness.

The issue is too complicated to have a simple, one-size-fits-all answer. Are federal employees overpaid? Yes, some are. Are federal employees underpaid? Yes, some are. Is it easy to determine which is which? No, but it can be done.

My fear is that the politics of the issue will get in the way of determining what federal pay should be. Can a Republican take a strong stand advocating that tens of thousands of federal employees get a big pay raise? Probably not. Can a Democrat take a strong stand and advocate that tens of thousands of employees get a pay cut, or a least a long-term pay freeze? Probably not.

Federal Benefits

Federal benefits are also not a simple issue. In general, federal employees get better benefits than rank and file employees in the private sector. Is that good? Bad? It depends on your point of view.

Do we believe employees everywhere should have excellent health insurance and pensions? If so, it is easy to make the argument that the federal government should set an example and be a model employer. If your answer is that companies and governments should pay the least they can get away with to get a supply of labor, then your answer is that federal benefits should be cut.

In an ideal world, we would have an informed discussion where we make that type of decision. We would not try to reduce it to a bumper sticker that declares there is a single answer to a complicated question. We would understand that how we treat 2 million people is a big deal.

Real Solutions

The federal workforce is a significant part of our economy. In areas like the National Capital Region, or Jacksonville, Florida, or Denver, Colorado, or any other city with a large contingent of federal employees, what we do with the federal workforce has consequences that reach far beyond the employees who are directly affected.

If we want a real answer, and a real solution, I believe we have to stop treating the federal workforce as a homogeneous group that should be treated exactly alike. We should pay people for the value of the work they do. That means any new approach to federal pay is going to have winners and losers, based on what is or is not in demand in the labor market. That means replacing the outdated General Schedule with something that is market-based. It also means being willing to pay some people less, and it means being willing to pay some people a lot more.

Rather than trying to work this out in a political food fight, I would prefer to see a nonpartisan commission that could examine the issue and make recommendations for a new federal pay and benefits approach. We could go a step farther and make it a process similar to the Base Realignment and Closure Commissions, which presented recommendations that had to be accepted or rejected in their entirety. Such a commission should be charged with updating federal pay and benefits to make the government a very good employer, with pay and benefits that are not the very highest, but are in the top 50 percent of the American workforce.

This type of approach could de-politicize the issue to a degree and reduce the tendency to treat the federal workforce as a proxy for the big government/small government fight that has been going on since the Federalists and Anti-Federalists at the constitutional convention debated about the nature of the republic and what our constitution should include. It would not be easy, but it would be more likely to produce a fair outcome than we are likely to get from the political process.

This column was originally published on Jeff Neal's blog,, and has been reposted here with permission from the author. Visit to read more of Jeff's articles regarding federal human resources and other current events along with his insights on reforming the HR system.

About the Author

Jeff Neal is author of the blog and was previously the chief human capital officer at the Homeland Security Department and the chief human resources officer at the Defense Logistics Agency.