Using data from the National Compensation Survey, Zubin Jelveh matched 588 common jobs in the private and public sectors. “This chart looks at how the pay differential between the two sectors changes as we move up the pay scale in the private sector:”
Overall, there is a 20% difference in pay between government and private sector employees. Government employees earn an average of $49,479 while private sector workers earn an average of $40,996.
Zubin Jelveh poses the following question:
Does this mean that we should cut the pay of the average public employee by 20%? (A back-of-the-envelope calculation puts the cost savings from this at $94 billion.)
I don’t think so. One reason: By choosing to work in the public sector, a person pretty much gives up the option of having a high or very high salary, so the pay differential may compensate for that. Are there other reasons?