Answers on Public v. Private Sector Pay Remain Elusive

GAO finds there are no definitive studies on how salaries stack up.

Federal employees are not any closer to knowing definitively how their pay stacks up against their private sector counterparts. That’s according to a Government Accountability Office report that found that recent studies that attempt to compare federal versus private sector pay vary too much in their approach, methods and data to be reliable sources for informing federal pay decisions.

GAO looked at several compensation studies and found that no particular study was the most effective or definitive way for determining how federal pay should be set, in light of fiscal stewardship and the effective recruitment and retention of a competent successful workforce.

“Given the changes in the federal workforce over the last 30 years, there has been growing interest in reexamining the federal pay system -- how pay is determined and how comparisons with other sectors are made,” the report stated.

For example, three of the studies compared pay for individuals with various personal attributes, such as education and experience, and other attributes, such as occupation and firm size. These studies came up with federal workers being paid more, with pay ranging from 2 percent to 22 percent higher than private sector workers.

In addition, two of the studies compared pay for similar jobs based on categories like occupation, but not on other characteristics like a worker’s education or experience. These studies included the President’s Pay Agent study, which said federal pay was lower than nonfederal (private, state and local) by an unexplained 24 percent, and a Project on Government Oversight study, which found federal workers’ pay was higher than private workers’ by an unexplained 20 percent across the occupations studied.

Finally, a Cato Institute study illustrated broad trends in pay over time without controlling for other attributes of the workers or jobs, GAO found. This resulted in federal workers’ pay being higher than private workers’ pay by an absolute amount of 58 percent, GAO found.

“Given the different approaches of the selected studies, their findings should not be taken in isolation as the answer to how federal pay and total compensation compares with other sectors,” GAO said, noting that it was not making any recommendations as a result of its analysis.

Meanwhile, outside of GAO’s report, other studies have looked to make comparisons of federal versus private sector IT pay scales, and those studies also have come up with conflicting results. For example, a recent survey by InformationWeek found that while total compensation for federal IT workers in 2011 was flat, at $97,000, it is still higher than private sector IT compensation, which was $90,000 last year. A separate study released by in January found that salaries for government tech workers averaged $79,605 in 2011, slightly below the average salary for tech workers in all industries, which came in at $81,327.

And so the debate on federal versus private sector pay continues. What are your thoughts on GAO’s study, and how do you think your federal IT salary stacks up against your private sector counterparts?