Jason Richwine of Heritage and Andrew Biggs of AEI provide an interesting thought experiment about the disparities between public and private employee compensation:
If public employees are underpaid, they ought to get raises when they switch to the private sector. But they don’t, and that fact is telling.
According to the SIPP data, the average federal worker shifting to a private job actually accepts a small salary reduction of around 3 percent. Similarly, private sector workers who move to federal jobs don’t take a pay cut. They get a first-year raise averaging 9 percent, well above the raise other workers get when they switch jobs within the private sector.
SIPP stands for Survey of Income and Program Participation, a Census Bureau dataset that tracks tens of thousands of households over several years as they switch jobs. Using it above, Richwine and Biggs turn their thought experiment into a cold hard fact: Compensation is better in the public sector.
Think that’s sustainable?