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Thursday, January 17, 2019

Furloughed Federal Employees are Still Paid More Than You


Poor Man Survival

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Furloughed Federal Employees are Still Paid More Than You

by Ryan McMaken

 

Whether it's CNBC, or The New York Times, or NPR, the mainstream media is clearly committed to using the current partial government shutdown to portray federal workers as beleaguered victims of the American political system.

But, in all cases I've encountered, these reports neglect to mention that on average, civilian federal workers make 17 percent more than similar workers in the private sector, according to a 2017-2018 report by the Congressional Budget Office. That's total compensation, so we're including both wages and benefits.

Considering that a year is 52 weeks long, an average federal worker would need to be completely without any income for nearly 9 weeks in order to just be reduced to equal standing with a similar private-sector worker. (17 percent of 52 weeks is 8.84 weeks.)

 


As of this writing, the current shutdown has only lasted three weeks, which means all those furloughed workers profiled in national news stories are likely still coming out ahead of their private-sector colleagues. Moreover, given that both Trump and Congress have committed to pay furloughed workers back pay, it's a safe bet that federal workers will continue to enjoy a healthy advantage over private-sector workers when it comes to compensation.

Health benefits for most federal workers will also continue without interruption through the shutdown, as noted by NPR.

The Federal-Pay Advantage Is Larger for Lower-Income Employees

The disparity between private-sector work and federal jobs is largest at the lower end of the education scale.

According to the CBO's report:

Federal civilian workers with no more than a high school education earned 34 percent more, on average, than similar workers in the private sector.

That's just wages. They get far more in terms of benefits like healthcare and vacation time:

Average benefits were 93 percent higher for federal employees with no more than a high school education than for their private-sector counterparts.

The benefits for workers with a bachelor's degree are 52 percent higher for federal workers than for their private-sector counterparts. Wages for federal workers in this group, however, are only five percent higher.

Only when we look at federal workers with PhDs and other advanced degrees, do we find some federal workers who actually make less than similar workers in the private sector. Wages among highly-educated federal employees were 24 percent less than in the private sector, according to the report. Benefits remained "about the same."

So, most federal employees — especially the ones with less education — have a long way to go before facing the economic realities that private-sector employees — i.e., the net taxpayers — face on a daily basis.

Crowding Out Private Employment

Not content with manufacturing sympathy for federal workers, however, news organizations have also pointed to a decline in spending by federal employees as damaging to the economy.

A typical passage is one like this one from a CNBC article:

If the government shutdown lasts another two weeks, the total cost to the U.S. economy would exceed the price of building the proposed border wall.

Without federal spending, we're told, GDP will suffer:

We estimated that this shutdown could shave approximately $1.2 billion off real GDP in the quarter for each week that part of the government is closed.

That might sound like a big number (to some people unfamiliar with federal finances), but it's helpful to keep in mind that federal workers make up only 1.5 percent of the U.S. workforce. And not all of those are furloughed.

Moreover, since furloughed workers can eventually expect back pay, any bust in GDP right now will be followed by a boom in spending once the back pay is received.

The real cost to the private sector is in the form of industries that are paralyzed as a result of understaffed federal regulatory agencies. (As mentioned in this article about craft beer.)

When the private sector isn't allowed to function without regular certification and inspection from federal agents, that means shutdowns prevent the private sector from functioning. This, of course, isn't an argument for more government spending. It's an argument against a vast federal regulatory apparatus that can't be counted on to perform the bare minimum of tasks it has promised to perform.

All of this is just a good reminder that these jobs should never have been federal jobs in the first place. After all, many of these positions are already by definition "non-essential," and from the national parks to the airports to the FBI, the federal workers are doing jobs that could easily be taken over by state and local authorities, or by the private sector.

Were that the case, no nationwide, system-wide shutdown all of countless nationwide agencies would be of any noticeable impact. The system would become less fragile, more flexible, more diverse, and less costly.

Also, many of the workers who now rely on federal paychecks would already be working in the private sector had the federal government not crowded these jobs out of the marketplace to begin with.

Every time the federal government inserts itself as a monopolist regulator or service provider, federal agencies suck resources (in terms of both capital and human resources) out of the private sector.

That means fewer new hires in the private sector, and it means lower wages for the employees left in the private sector who must foot the bills for federal agencies and employees. It also means higher prices for the private sector as government agencies bid up prices on everything from steel to petroleum.

Ultimately, all of the problems we're being told about as a result of the government shutdown are problems caused by a federal government itself, which has inserted itself into every nearly every corner of daily life nationwide.


Remind me again who Dems like Pelosi represent:  is it the Hollywood elites, the wealthy upper class they’re now a part of, the illegal non-citizens or the eroding Middle Class they’ve been taxing into oblivion and marginalized, and/or the voters who want their rights and security respected?

 

Yours for a brighter season,

Bruce ‘the Poor Man!’


Final Notes…

Contributors and subscribers enable the Poor Man Survivor to post 150+ free essays annually. It is for this reason they are Heroes and Heroines of New Media. Without your financial support, the free content would disappear for the simple reason that I cannot keep body and soul together on my meager book sales & ecommerce alone.


Starting with your 2018 tax year, the laws have changed substantially. Tax accountant Vinay Navani offers ideas you can share with your tax professional to potentially reduce your tax liability.



 

 


Americans are an unhappy lot, and they're growing less happy by the year. That's according to the World Happiness Report (WHR) which is based on Gallup polling and sponsored by United Nations-linked globalist organizations.

America dropped from the 13th-happiest country in 2016 to the 18th-happiest in 2018. The nation saw happiness levels drop significantly in the WHR from 2005-2007 and again from 2013-2015.

So why is everyone so unhappy? The authors of the WHR attribute American unhappiness to income inequality, obesity, the opioid epidemic and a "depression epidemic." Certainly income inequality, obesity, an opioid epidemic and a depression epidemic all exist

 

Welfare Breeds Welfare

Social welfare programs are destructive to the individual and the family unit because they absolve the parents of their parental responsibilities and promote dependency on government. There are now "families" that for two or three generations have been wards of the state. Many if not most of them are without a male head of household. They depend upon the state to provide their sustenance, their housing, their transportation, their healthcare and their entertainment. They know nothing of individuality or personal responsibility.

 



 


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Additional Resources
 
 

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2 comments:

Larry said...

It's a no-brainer that government workers get better benefits, retirement packages and perks [hell, the number of paid days of they get surpasses everyone else] and you can't fire any of them unless they shoot a supervisor -even then they probably can hang onto their job- and I'm blown away by media interviews showing how many employees seem desperate after one fricking week of no paycheck! Don't these people put anything aside for emergencies?

Sam said...

Within a week the media was already portraying this is a huge crisis with federal employees eating spaghetios from cans because they had zero food in their homes...wah, wah. If these people were too dumb too have a few weeks groceries and cash on hand for emergencies despite years of FEMA warnings then I don't feel too sorry for them. They weren't good Boy Scouts and have ignored every basic tenet of financial planning AND as the article says - they're better paid than the average non-government worker.