Workers with a high school diploma or less — about 13 percent of the federal workforce — receive more benefits and wages per hour than their private-sector counterparts, according to a Congressional Budget Office report.
Total compensation, comprising benefits and wages, for federal employees with the educational attainment of high school or less was, on average, about 40 percent more than their private-sector counterparts in 2022, per the report, which uses the most recent full-year data available. With only a high school diploma, workers can qualify for GS-2 level jobs, the General Schedule’s second pay grade that typically signifies an entry-level position, according to USAJobs.
For years, federal employee groups have lamented government salaries that trail what the private sector can offer, and in most cases they do. People with advanced degrees, like doctors or lawyers, tend to be offered better compensation packages by companies, instead of the government. But for other workers with less educational attainment, the opposite can be true. But when joining the workforce right out of high school or even without a diploma, a government job is actually more competitive.
The report, released last month, found that workers with a high school degree or less received 17 percent more per hour in wages, and benefit costs were 88 percent higher than their private-sector equivalents.
Those with a Bachelor’s degree received 10 percent less per hour in wages, but 44 percent higher benefits compared to private-sector workers. Federal workers with a doctorate or professional degree earned 29 percent less per hour than their counterparts in the private sector, but the benefits were relatively the same.
Total compensation for federal employees was 5 percent higher than the public sector for those with a Bachelor’s degree and 22 percent less for those with a professional degree or doctorate, per the report.
More recently, there has been an effort to move toward skills-based hirings by the federal government through removing college degree requirements from job applications.
Federal government agencies are beginning to move away from hirings based on education and candidates’ self-assessments and are gravitating toward skills-based assessments instead.
To diversify the workforce and remain competitive against the private sector with high-quality employees, the Office of Personnel Management, which acts as the HR department for the federal government, has released guidance regarding the implementation of skills-based assessments for employers to identify the best talent, regardless of education level.
According to the report, most workers value other job attributes than wages and benefits like the ability to work from home and job security, which drives them to accept smaller total compensation packages.
The federal government offers better job security than the private sector, but some compensation is deferred until retirement, which is considered less attractive to potential workers, the report said.
The analysis focused on 2022 because the “temporary” effects of the COVID-19 pandemic had largely subsided by then for federal and private-sector employees, according to the report. Both sectors continue to feel the effect of the pandemic, with a push from representatives to get federal employees back in person and away from more telework opportunities, which the report states can decrease the total compensation the federal government has to offer, relative to the private sector.
Telework appeal
While people express an interest in telework and the report showcases how a reduction in telework causes a decrease in federal employment appeal, the report suggests that it is not a determining factor in a worker’s interest in federal employment because only a small number of employees would be able to telework more if they transferred to the private sector.
The report states that since some federal employees need to access sensitive information using their security clearances, they don’t always have the option to telework. The difference in telework rates between the two sectors was only 2 percent during 2022, per the report.
The latest CBO report on the two sectors’ comparisons detailed 2011 to 2015. The report in 2022 said the federal compensation offered declined compared to the private sector because federal salary increases lagged behind the wage growth in the private sector. Since the costs of pensions, paid leave and other legally required benefits are closely linked to salaries, the slow federal salary growth can also slow the growth in benefits, according to the report.
The report compared the two periods and found the amount of federal pay surpassed private-sector pay for workers with less education reduced and difference in wages between the two sectors increased, with private sector employees ahead of their federal counterparts by 2022.
In fiscal year 2022, the federal government compensated 2.3 million civilian employees with $271 billion and is in constant competition with the private sector for employees, according to the report. The report said the federal government could decrease its spending on total compensation by 5 percent if compensation was adjusted to match the private sector.
Cristina Stassis is an editorial fellow for Defense News and Military Times, where she covers stories surrounding the defense industry, national security, military/veteran affairs and more. She is currently studying journalism and mass communication and international affairs at the George Washington University.
