Feds face a smaller but significant pay gap with private sector (2024)

FAQs

Does federal government pay more than private sector? ›

In recent years, data comparing federal government and private sector compensation from the Bureau of Labor Statistics had indicated that the gap has slowly trended downward, with federal workers earning 22.47% less on average than private sector workers in similar jobs in 2021.

Washington D.C. – Federal employee salaries in 2022 have fallen further behind the private sector, according to new data released Friday by the Federal Salary Council. Federal employees on average earned 24.09 percent less this year than their counterparts in the private sector. In 2021, the gap was 22.47 percent.

The 5.6% average pay gap is a slight improvement from the 5.9% gap in 2021. And it's significantly smaller than it was 30 years ago — 24.5%. The current gender pay gap in the federal sector is also smaller than the 16% gap in the private sector. Graph from the Office of Personnel Management.

The figure marks an increase over the 4.6% pay hike feds received in 2023, and would be the highest proposed pay hike federal workers have seen since the Carter administration implemented a 9.1% average pay increase in 1980.

While there are caveats in making compensation comparisons across workers, these data suggest the key reason for this enormous pay gap is that private sector pay is disciplined by the normal market forces of supply and demand, whereas public sector pay is disciplined, if you can call it that, only to the extent that ...

Benefits: Government benefits can exceed private sector benefits packages. 1 Employees often have superior health care plans with lower costs and favorable retirement plans. Government and private sector benefit packages both get worse in prolonged recessions, but government benefits remain better.

Much of the gender pay gap has been explained by measurable factors such as educational attainment, occupational segregation and work experience. The narrowing of the gap over the long term is attributable in large part to gains women have made in each of these dimensions.

Federal employees' wages are falling further behind those in the private sector, according to new data from the Federal Salary Council. The council reported that in 2022, federal workers earned 24.09% less in wages alone than their private sector counterparts. In 2021, the pay gap by the same measurement was 22.47%.

The primary difference between public- and private-sector jobs is that public-sector jobs are generally within a government agency, while private-sector jobs are those where employees work for non-governmental agencies. This includes jobs within individual businesses and other types of company organizations.

Private sector jobs often have the potential to pay more than government jobs. While government jobs may offer job security and benefits, such as comprehensive health insurance and generous retirement plans, they often have slow growth rates and provide limited opportunities for salary increases.

Does Equal Pay Act apply to federal employees? ›

The California Labor Code sections, including the California Equal Pay Act, apply to all employers, regardless of their size, but do not protect federal government employees.

Women, on average, were paid 20.3% less than men in 2019. By 2022, that gap widened to 22.2%. Similarly, the regression-adjusted wage gap, which has been stagnant for most of the last 20+ years, widened slightly from 22.6% to 22.9%.

5304 and special rates under 5 U.S.C. 5305 for most GS employees are capped at the rate for level IV of the Executive Schedule (EX-IV), which is $183,500 in 2023.

A committee-published summary of the defense policy bill said the legislation provides an average 5.2% pay raise for both members of the military and Defense Department civilian workers, in line with the proposal set forth in Biden's fiscal 2024 budget request.

For 2023, the COLA surged to 8.7%, and federal retirees saw the highest inflation increase in their benefits since the early 1980s. Now, inflation rates are slowly leveling out after reaching a four-decade high in 2022, and in response, the COLA is projected to be much more modest.

Federal employees' salaries lag their private-sector counterparts in comparable jobs by 22.47 percent on average, an advisory group said in a Friday report that noted the “pay gap” has held steady over the last two years.

Federal employees' wages are falling further behind those in the private sector, according to new data from the Federal Salary Council. The council reported that in 2022, federal workers earned 24.09% less in wages alone than their private sector counterparts. In 2021, the pay gap by the same measurement was 22.47%.

Working in the federal government can provide financial security, peace of mind and a chance to serve your community. Whether you are considering a job in the federal government or just needed a refresher on your benefits, you should know that government work changes the lives of so many employees and their families.