A: The standard approach for these types of pay comparisons is that you focus on the employee. ... You use the attributes of the individual to try and predict what the wages are and that’s how most economists see this. ... The Pay Agent Approach doesn’t think about employees, it thinks about jobs. ... The Pay Agent also doesn’t include benefits. ... For both federal [and] state and local workers, it’s in the benefits where the action is.
Q: Do you think an across-the-board pay freeze for public-sector employees is enough to level the playing field? If not, what steps would you recommend?
A: An across-the-board pay freeze like we’ve seen and [people] have proposed, I don’t think as a short-term measure is terrible. But it’s really not the way you want to go about this. ... The level of pay for federal employees isn’t uniform across the distribution. It tends to be the low and middle end where the pay is overly generous. ... An across-the-board pay cut is a blunt instrument that doesn’t get things right. We need reforms to how we go about doing these things and to get away from a one-size-fits-all solution.
Q: In which sector is it more significant to have a college degree?
A: It is more common in the federal government to have a college degree than in the private sector. There’s a second more technical question: Where are you more rewarded for being educated? I think [payment] tend[s] to be a bit larger in the federal government.
Q: From your perspective, what industry in the private sector is the most promising in terms of salary and benefits at the moment?
A: It’s not something I study very much. Obviously health care is a growth industry in the private sector. Private-sector education is working well. I don’t have a very good answer to that question.
Q: Are there a large number of private-sector employees who are going to the public sector? Or is it the other way around?
A: Research has shown that you have what’s called a job queue for federal employment and also for state and local government as well, which means that more people want those jobs than can get them. The government doesn’t have a lot of trouble attracting people in most cases.
Q: What do you think the biggest misperception is about the debate surrounding the pay differential between the two sectors?
A: You get a little from both sides. Folks on the right who will just compare pay for the average federal employee to that of the average private-sector worker, and ignore the fact that federal employees are more educated and more experienced. On the other hand, a lot of government employees have spent most of their lives in the government being told that they’re underpaid by 26 percent or whatever. And I think a lot of them don’t really understand how generous their pay and benefits are relative to the private sector.
Q: Is there a model on the state level that you would implement on the federal level in terms of dealing with discrepancy in pay?
Sen. Jeff Flake, R-Ariz., takes a selfie with his cut-out head during the Hoops for Youth 16th annual charity basketball game held at George Washington University's Smith Center, September 8, 2014. The members of Congress team beat the lobbyist team 46-40. Buy photo here.