An Upside to the Pay Freeze

• By Kellie Lunney; August 30, 2012
  

It’s safe to say the two-year federal pay freeze has not been popular with government workers. Even those who support the freeze acknowledge its limitations: the savings it has generated (estimates are between $60 billion and $70 billion) is a drop in the deficit-reduction bucket, and it’s not exactly a morale booster. The GOP policy platform, which calls for overhauling the federal pay system to bring it in line with the private sector’s, and Obama’s decision to postpone a 0.5 percent pay boost 2013 until Congress passes a budget, has put the issue in the crosshairs once again.

But there could be an upside to the pay freeze for feds. It puts a slight chink in the argument that federal employees are way overpaid compared to private sector workers — a debate that rages on both sides and probably will never be settled definitively. The libertarian Cato Institute, the Washington think tank that has argued federal employees are too generously compensated compared to their private sector counterparts, acknowledged in a recent blog post that the “federal pay advantage” has narrowed, partly as a result of the two-year pay freeze. Continue reading “An Upside to the Pay Freeze”