Acton Institute Powerblog

The Effects of Federal Unionism

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According to figures recently released by the U.S. Bureau of Economic Analysis, federal workers receive on average about double what private sector workers make: $106,579 vs. $53,289. These numbers are based on total compensation.

A study done by the Cato Institute (PDF here of 2004 figures), under the direction of Chris Edwards, shows that for 2005, “If you consider wages without benefits, the average federal civilian worker earned $71,114, 62 percent more than the average private-sector worker, who made $43,917.”

In his WaPo op-ed, Christ Edwards points to a number of reasons for this disparity. He says that there are a number of contributing factors. “Federal pay schedules increase every year regardless of how well the economy is doing. Thus in recession years, private pay stagnates while government pay continues to rise. Another factor is the steadily increasing ‘locality’ payments given to federal workers in higher-cost cities,” he says.

Edwards continues, “Rapid growth in federal pay also results from regular promotions that move workers into higher salary brackets regardless of performance and from redefining jobs upward into higher pay ranges. The federal workforce has become increasingly top-heavy.” In addition, “The structure of that workforce has also changed over time. There are fewer low-pay typists and more high-pay computer experts in the government today than there were a generation ago.”

A WSJ op-ed also notes that “many federal employees are in white collar occupations that often command high pay,” so that may account for a small part of the disparity.

The WSJ states that “one market test is the voluntary quit rate of these workers, and data for recent years show that rate for federal employees is only one-fourth that in private sector occupations. High-paying federal jobs are so coveted that they are now like rent-controlled apartments in Manhattan: Once you’ve got one, you hold on to it for life.”

It seems to me that there is something deeper behind a number of these phenomena. Edwards hints at this element when he notes, “Federal workers’ unions try to convince Congress that their members suffer from a ‘pay gap’ with the private sector.”

Labor union membership in the private sector has declined steadily and stands at about 8%. By contrast, in the government sector labor union membership stands at around 37%.

This is itself a huge disparity, and one that I would think has large effects on issues of pay, benefits, and job security. Thus, I think there has to be a link between the rates of union membership and compensation between the public and private sectors.

As Dr. Charles Baird notes in a radio interview (mp3), “In the government sector there is no declining unionism, none at all.” And given how good the compensation and security of the jobs in the government sector are, why should there be?

More at Chris Edwards’ related post on Cato@Liberty.

Jordan J. Ballor Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is a senior research fellow and director of publishing at the Acton Institute for the Study of Religion & Liberty. He is also a postdoctoral researcher in theology and economics at the VU University Amsterdam as part of the "What Good Markets Are Good For" project. He is author of Get Your Hands Dirty: Essays on Christian Social Thought (and Action) (Wipf & Stock, 2013), Covenant, Causality, and Law: A Study in the Theology of Wolfgang Musculus (Vandenhoeck & Ruprecht, 2012) and Ecumenical Babel: Confusing Economic Ideology and the Church's Social Witness (Christian's Library Press, 2010), as well as editor of numerous works, including Abraham Kuyper Collected Works in Public Theology. Jordan is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary.


  • That’s amazing.

  • Jim

    I’d be interested in seeing some true stts about how many federal employees belong to a “union”.
    I am not now, nor have I ever been, a federal employee. But, frankly, I am sick to death of hearing people in the private sector whine about how much federal employees make, etc., etc., when a great many federal jobs are dangerous, thankless and very stressful.

    Further, many of the jobs have no counterpart in the private sector because that job can’t be done profitably by a private company.

    If these people are qualified and want one of these jobs, let them apply.

    Finally, I notice that you don’t see people demanding that Ford, GM, Wal-Mart or Halliburton save them, replace their homes after a disaster or do any of the many other tasks performed by government workers, often at the risk of their own health or life.

    I think a lot of this goes back to the attitude that government service, at any level, is not as good or honorable as working in “business”. Proof of that is the atrocious salaries we pay those who enforce our laws, fight our fires and work in prisons, as social workers or teachers.

    I appears that if you do something that works with people, you’re not valued.

  • A citizen

    “I appears that if you do something that works with people, you’re not valued.”

    Is an average salary of $106,579 a year in total compensation not a resounding “thank you” for your performance in the line of duty?

    Let’s not fool ourselves: not all 1.8 million civilian employees are saving the world or the orphans or innocent virgins. Most of them live in an office pushing paper with their only concern being to NOT innovate themselves out of their comfortable job.

    I for one was never asked if I want to subsidize this 1% favored class with my tax money. My answer would be: no, thank you. I will push my own paper. And when the next hurricane comes, I will get a job and build myself a new house (and certainly the lower tax rates will go a long way to help me with that).