Saturday, December 21, 2013

Should we trust our government to provide equality?

As I mentioned in an earlier post, in 2011 the average federal civilian employee earned over $112,000 per year including income and benefits.  Newer data shows that two years later the average compensation has climbed to over $118,000 per year.  With an average wage of about $82,000, that's $36,000 in benefits per year.  Pretty impressive package, when you work for the federal government.

Military members receive a good deal of their compensation in benefits - according to the Congressional Budget Office, for our 1.4 million active duty military members, about $40 billion is spent on healthcare alone.  Another $16 billion is deposited into pension accounts, with most of the remaining $90 billion going to pay, food, housing, etc.  According to Aurelio Locsin of the Houston Chronicle, his study of the CBO estimates indicate that about 60% of total pay is non-cash, so about $90B in total benefits.  That means we can break out another $34B from the remaining listed above and estimate that pay is about $56B.  So, we have an average pay of $40,000, and an average compensation package of $64,000, for a rough average of $104,000 annual compensation for every active duty soldier.

Right off the bat, we can say that while soldiers really aren't underpaid, they are certainly not paid what other federal employees are paid - civilian employees are paid 13.5% more than soldiers. Even within its own ranks, average compensation is very different for different groups. 

When you compare these two groups to non-government, you find that both groups trump civilian compensation, by far.  According to the Social Security Administration, the National Average Wage Index (NAWI) for 2012 is $44,321.67.  According to the BLS, private employment benefits (retirement and healthcare) account for about 30.4% of an employee's total compensation, so if we factor that back in the average total compensation for a non-federal government employee is about $63,680. 

For civilan federal employees, that represents an 87% premium over their private counterparts.  Interestingly enough, they are just over 1% of the total civilian workers in the US.  1% eh?  An interesting if silly coincidence.   However silly, the phrase "some animals are more equal than others" comes to mind.

Back to Cato's analysis, their numbers indicate different values on the current state of private industry wage, but we'll chalk that up to them doing a more thorough study:

You can see that federal civilian wages have outstripped private industray wages over the span of the entire dataset, and not just by a little.  With federal employees earning nearly double what private employees earn, they certainly seem to be treated as a higher class of citizen.

Again, per my earlier post, and since government seems to be in the business of redistribution for supposed egalitarian purposes, I suggest a remedy to this clear inequality: we cut federal civilian compensation to match private compensation. Cutting $55,000 per federal employee, on average, will realize a savings of $115.5 billion.  This represents close to 20% of the current budget deficit.  Furthermore, I suggest we rigerously enforce that equality - everyone from the federal janitor to the federal judge, senator, or President will get the same compensation package, worth $63,680.

That'll show the world that our government means business!  Instead of talking about equality it will set an example... Go tell your representatives.

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