Federal workers with only a high school education outperform the private sector

Workers with a high school diploma or less — about 13 percent of the federal workforce — receive more benefits and wages per hour than their private-sector counterparts, according to a Congressional Budget Office report.

Total compensation, including benefits and wages, for federal workers with at least a high school education was on average about 40 percent higher than their private-sector counterparts in 2022, according to the report, which uses the latest full-year data available. According to USAJobs, with just a high school diploma, workers can qualify for jobs at the GS-2 level, the second pay grade on the General Schedule that typically denotes an entry-level position.

For years, federal labor groups have lamented that government wages are on par with what the private sector can offer, and in most cases they are. For people with higher education, such as doctors and lawyers, companies, not the government, offer better compensation packages. However, for other workers with less education, the opposite may be true. But if you join the workforce right out of high school or even without a degree, government jobs are actually more competitive.

A report released last month found that workers with a high school diploma or less earned 17 percent higher hourly wages and had benefits costs that were 88 percent higher than their private sector counterparts.

Those with a bachelor’s degree earned 10 percent less per hour but 44 percent higher benefits compared to private sector workers. Federal workers with doctorate or professional degrees earned 29 percent less per hour than their private-sector counterparts, but benefits were relatively the same.

The report found that federal workers’ total pay was 5 percent higher than in the public sector for those with a bachelor’s degree and 22 percent lower for those with a professional or doctorate degree.

Recently, the federal government attempted to move toward skills-based hiring by removing college degree requirements from job applications.

Federal government agencies are beginning to move away from hiring based on applicant’s education and self-assessment and are instead moving toward skills-based assessments.

To diversify the workforce and remain competitive with the private sector with high-quality employees, the Office of Personnel Management, which serves as the federal government’s HR department, has published guidelines for implementing skills-based assessments for employers to identify top talent, regardless of education level.

According to the report, most employees value job features other than pay and benefits, such as the ability to work from home and job security, which leads them to accept smaller total compensation packages.

The report found that the federal government provides more job security than the private sector, but some compensation is deferred until retirement, which is considered less attractive to potential employees.

The analysis focused on 2022 because the report said the “temporary” effects of the Covid-19 pandemic had largely subsided by then for federal and private sector workers. Both sectors continue to feel the effects of the pandemic, with officials pushing to rehire federal workers in person and away from more telework options, which the report says could reduce the total compensation offered by the federal government compared to that in the private sector.

Appeal for telework

While people are expressing interest in telework, and the report shows how restricting telework is making it less attractive to federal workers, the report suggests that this is not a determining factor in an employee’s interest in telework because only a small number of workers would be able to telework more often if will move to the private sector.

The report states that because some federal employees need to access sensitive information using their security clearances, they do not always have the option to telework. The report found that the difference in telework rates between both sectors in 2022 was just 2 percent.

CBO’s latest report on comparisons between the two sectors highlights the years 2011-2015. The 2022 report found that federal compensation offers have declined compared to the private sector because federal wage increases have not kept pace with private sector wage growth. Because the costs of pensions, paid leave and other legally required benefits are closely tied to wages, the slow growth in federal wages could also slow benefit growth, according to the report.

The report compared the two periods and found that the amount of federal wages in excess of private sector wages for workers with less education has narrowed and the wage gap between the two sectors has widened, with private sector workers overtaking their non-educated counterparts by 2022 federal.

The report found that in fiscal year 2022, the federal government paid $271 billion in compensation to 2.3 million civilian workers and continues to compete with the private sector for workers. The report indicated that the federal government could reduce its spending on total compensation by 5 percent if compensation were brought in line with the private sector.