Group Suggests Pay Cuts for Federal Employees

federal employees

A recent study has pointed out that federal employees are overpaid and there can be huge savings if the salaries and other benefits of the government employees are cut over the next few years. The report also stated that the federal workers get paid more than the private sector and their performance is not rigorously mapped like it is done with the workers of the private sector. The government also operates independently of market pressures which also make the federal employees get access to better benefits.

federal employeesFederal Employees earning better than Private Sector

The research was done by a conservative think tank, the Heritage Foundation. It suggested that the government can attain savings of more than $333 billion if it decides to cut the federal personnel costs over the next 10 years. About $26 billion in cuts were related to the pay earned by federal workers and the rest were related to cutting the retirement benefits, health care and paid leave privileges. The report also highlighted that the salaries and benefits offered to federal employees outpace the people working in the private sector.

Market Forces

The report of the research suggests that the federal government started to pay the federal workers more because the market forces have no influence over feds salaries. In contrast, the productivity offered by a private sector determines the salary and value of an employee.  The report also stated that there is no completion for taxpayers’ dollars which reduces the level of competition in the government.

The Structure of General Schedule Pay Scale

The report also pointed out that the structure of the General Schedule pay scale is not perfect as the agencies are forced to opt for a grade that hypothetically corresponds to private sector jobs. The structure also remains the same for years even when the pay offered in the private sector varies on the basis of the market conditions. The pay scale of federal workers is not dependent on the market conditions.

One of the Heritage researchers mentioned that in theory, the OPM creates the pay scales to reflect the market wages that are at par with private sector jobs but in reality, the wages paid to the federal employees are very different from the wages paid to the people in the private sector. It was suggested that the taxpayers’ money could be saved if the extra benefits are cut and the federal workers are asked to become more accountable.

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