Sunday, May 21, 2017

Weekend update

Congress remains in session on Capitol Hill this week. On Tuesday, according to Reuters, the President will release his complete FY 2018 budget proposal. The House and Senate Budget committees each will hold hearing on the proposal on Wednesday morning.

Federal News Radio reports on a federal employee compensation hearing that the House Oversight and Government Reform Committee held last Thursday. OPM did not present testimony at this hearing. The Congressional Budget Office ("CBO") did testify.
Overall, CBO found that government  spends about 17 percent more compensating federal employees  compared to their counterparts in the private sector.  In total, federal employees with a high school diploma or less earn on average 53 percent more than their counterparts in the private sector, while federal workers with a bachelor’s degrees received 21 percent more in compensation. In contrast, total compensation costs for employees with a professional degree or doctorate were 18 percent lower than workers in the private sector, CBO said.
The CBO report (p. 13) finds similar but exaggerated differences when you consider fringe benefit costs.
As with wages, differences in the cost of benefits in the federal government and the private sector varied by employees’ highest level of education. For example, CBO estimates that, relative to costs for similar workers in the private sector, bene t costs were about:
  • 93 percent higher, on average, for federal workers with a high school diploma or less education;
  • 52 percent higher, on average, for federal workers whose highest level of education was a bachelor’s degree; and 
  • Roughly the same, on average, for federal workers with a professional degree or doctorate.
On average for workers at all education levels, benefits for federal employees cost about $26 per hour worked, whereas benefits for private-sector employees with certain similar observable characteristics cost $18, CBO estimates. 
The Government Accountability Office also testified.  According to the Federal News Radio report,
“Pay is not the only thing,” said Robert Goldenkoff, director of strategic issues at GAO. “Even if we could assume for the moment that we could come up with the ideal pay system, it still does no good if your on-boarding processes are inadequate, if you don’t make effective use of their talents, if you don’t aggressively recruit them, if once they do come on board you don’t develop them [and] they’re not given effective supervision. It’s also a matter of work-life balance programs, and it needs to be tailored to individual labor markets. It needs to be tailored to individual occupations. We’re just not doing that effectively right now.”
The GAO report (p. 3) also reminds Congress that "government-wide more than 34 percent of federal employees on-board by the end of fiscal year 2015 [September 30, 2015] will be eligible to retire by 2020" At the OPM AHIP carrier conference, an OPM statistician observed that the federal government retirement tsunami that was predicted ten years ago has not happened yet.  He attributed it to the great recession and the fact that the FEHBlog's own Baby Boomer generation is working longer than anticipated. Giving the government more time to adjust is a good thing, but as sure as time marches on, the retirement wave will hit before long.

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