Cato: Federal employment is 'parasitism' on private sector


Do you see dedicated public servants contributing to society? Or parasites leeching off of the private sector?

I’ve had the nagging feeling lately that this never-ending debate over federal salaries is, deep down, really just a Rorschach test for how someone feels about the government. And the Cato Institute’s latest blog on the subject has some interesting comments that lend credence to my theory.

Cato budget analyst Tad DeHaven on Tuesday fired back at OPM Director John Berry’s recent assertions that Cato and other federal critics are playing fast and loose with the facts to support their political viewpoints. DeHaven goes over some familiar points — federal perks and benefits are much more generous than in the private sector, their job security is nearly absolute, feds are much less likely to quit their jobs than private sector employees.

But then DeHaven takes an unusual angle on Berry’s comment that federal-private comparisons have been “apples to oranges:”

However, although they have a point [that Cato is comparing apples to oranges], it’s not for the reasons they suggest.

In the private sector, an employee’s compensation is a reflection of his or her value in the market. […]

What’s a federal employee worth? How does one measure a government employee’s production? Government isn’t subject to market disciplines. It can’t go out of business. It has no competitor. It doesn’t need to earn a profit or even break even. It doesn’t receive its revenue from voluntary transactions – its revenues are obtained via taxation, which is paid by individuals under compulsion and force.

[…]Federal and private employees are apples and oranges because the former is dependent on the latter for its existence. In the natural world, this relationship is call parasitism. [emphasis added] This is not a pejorative statement. Every dollar earned by a federal employee is one less dollar that a private sector employee earns. One can argue over a federal employee’s value to society, but one cannot argue that the perceived value doesn’t come at the expense of the private sector.

Even though DeHaven says that he doesn’t mean “parasitism” to be a pejorative, it’s certainly reads that way. (His qualification kind of reminds me of the way my Southern relatives will follow a brutal dig at someone with “Bless his heart.” As in, “Federal employees are parasites on the private sector, bless their hearts.”)

I spoke to DeHaven earlier today about OPM’s plans to reconsider how it determines the pay gap, and he told me:

At the end of the day, we need to look more towards the overall size and scope of the federal government. From my libertarian perspective, it’s way too big and too much of a drain on the private sector, and does things it doesn’t need to do or does them poorly, or does things that should be done in the private sector. Downsizing the federal government should mean we need less employees, and that’s the direction I would like to see things go.

It’s a reminder that the dustup over federal employees’ salaries doesn’t entirely come from genuine concern about fairness and wage equality. For some, it’s a proxy war, an extension of the centuries-old argument over what role the federal government should play in our nation. These are philosophical debates that can’t be resolved by looking at pure numbers. And even if feds were paid dollar-for-dollar the same amount as their counterparts in the private sector — or even less — this debate wouldn’t end.


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  1. And if we want to really bring compensation into sharper focus, let’s look at total rewards (ALL benefits and monies proved to the employee) in both Federal and private sector roles. Perhaps then we have stone fruit to stone fruit comparisons.

  2. It should also be mentioned that Federal Employee’s work under regulations and policies with reporting that is under more scrunity than private companies. Federal employees are held to a higher standard of ethics than private companies.

  3. exactly. it’s not about fairness. the pay disparity is a consequence. it’s evidence. it’s never been about fairness and equality. it’s what’s to be expected when the “servants” become the masters.

    “Government isn’t subject to market disciplines. It can’t go out of business. It has no competitor. It doesn’t need to earn a profit or even break even. It doesn’t receive its revenue from voluntary transactions – its revenues are obtained via taxation, which is paid by individuals under compulsion and force.”

  4. I’m a federal employee and I can say from personal experience that nomatter how much money our organization wastes, we always get more. This has lead to a general lack of accountability at every level of the federal government. Our funding comes from politicians, who are accountable only to the voters. As long as the policitians continue being able to fool the American people into thinking that they should keep funding everything they’re funding, there will be no reason to stop wasting money.

  5. Zshot your comment is full of crap…… yeah that’s why we have federal employees who use computers paid for by yours truly, the taxpayer, to view pornography on the job. Talk about a higher standard of ethics!

  6. Naaman Fletcher on

    Federal employees are held to a hire standard of ethics? That’s a joke right? Look at all the fed employees who spend all day surfing porn. In the private sector you get fired for that.

  7. Federal employees should be held to a higher standard, but they’re often not. That’s a management failure. I’m a federal employee and am also frequently shocked and disgusted at the money that is wasted. I do believe most federal agencies provide necessary services to our country, but they definitely don’t provide them efficiently. The problem isn’t really with most individual federal employees, who like their private-sector counterparts are mostly trying to do the best they can despite working with and for some percentage of losers. Instead the problem is with Congress’s approach of throwing money at problems in order to pander special interests, and upper management’s concern with internal politics and appearances over mission accomplishment and fiscal responsibility.

  8. I do not know what Justin or Naaman is talking about. Surfing porn on a government system is termination. Granted some of them retire or quit before the axe falls, but all in all I do not know of any employees not fired. That said, you will notice if you look farther than you nose that in almost every case the media picks up about the government doing this or that it involves an appointee.

    And yes, government is held to a higher and stricter standard than private sector companies simply because we are public employees.

    Just before I step down off the soap box, you might want to learn that the 123,000 dollars “average” salary government employees make was arrived at by the USAToday reporter inlcuding members of Congress pay into the factor. If you remove them, the average pay drops to 51,000 dollars with benefits of 22,000 (that varies).

    Ok, I’m done for now. Back to my interrupted vacation.

  9. “In the private sector, an employee’s compensation is a reflection of his or her value in the market.” (1) that’s BS, as we have nothing even approaching a free market in this country; (2) even if it were true, so what? A completely unregulated free market can produce desirable results (e.g., competition) and disastrous results (e.g., pollution). I.e., the free market is a tool, not an end in itself.

  10. @Richard J.

    “If you remove them, the average pay drops to 51,000 dollars…”

    Are you honestly trying to tell us that removing a mere 525 people out the pool of over 2.7 million federal employees in this country, that the average wage will drop by more than half?

    You quite obviously learned your math at a public school. Or perhaps just your critical thinking skills: If 525 individuals were added to a pool of 2.7 million, in order to raise the average of their salaries from $51,000 to $123,000, those 525 people would need to make around $370 million EACH.

    This lack of common sense does not surprise me coming from someone who can’t lose their job because of incompetence. Enjoy your vacation on me.

  11. I am so tired of hearing how overpaid government employees are, when really they’re talking about the big wigs in DC while most people on the ground earn less than our private sector counterparts. I also had better benefits in the private sector. The only things that the federal government has going for it are the retirement plan and the job security, and many of us are actually frustrated that it is so hard to get rid of someone. But I would suggest you stop comparing the high government earners to the lowest paid in the private sector and instead compare the average non-management salary/benefits to those of any large national company with a union. Then you’ll see the same job security, but the private sector will usually have better benefits and better wages.

  12. Government employees are public SERVANTS. Can anyone afford to pay their “servants” (employees) better than what they get themselves?

  13. Love Commenter Sean L’s dig at public schools.

    Let’s hope he doesn’t spill any caviar on his ascot while he and his preppy private school pals create more Enrons, bless their greedy, cannibalizing hearts.

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  17. I’m a federal employee in HHS and work myself ragged every day. Extremely complex work, constant deadlines, no breaks, rare lunches, lots of personal time freely given to my employer, and no perks. We don’t waste money in our programs and certainly have no time for online porn, much less the lacking judgement to access it. My private sector buddies feel sorry me and have actually started calling me to remind me to take breaks and invite me to their company picnics and such. What is personal sacrifice, commitment to the greater public good, and competence worth to taxpayers? I hope it’s at least worth my pretty much average salary.

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