The Great Federal Gravy Train Robbery

...There were those who considered public service a more satisfying pursuit than the alternatives open to them...

...Since 1962, the great increase in federal programming has not been in research and development, where professionals dominate, but in routine payment programs such as welfare, social security, food stamps, salary and revenue-sharing disbursements, which require hives of clerical worker bees...

...No...

...Editors, for example, abound in both the public and private fields, but since important elements of the commercial editor's job, such as circulation-building or attracting advertisers, play no role in the federal editor's job, the two are not judged matchable...

...This is so in spite of the fact that the Board of Actuaries of the Civil Service Retirement System has projected federal pension costs at 56 per cent of the payroll, a huge addition to the federal employees' deferred, but nonetheless real, compensation...

...Assuming a modest five-percent inflation rate, by the end of his actuarial life 18 years from now he would have collected more than $1 million in pension money—almost three times as much as he earned during his entire working life...

...Somewhere along the line, all of that changed...

...to raises less than a full catch-up with industry...

...Some civil service occupations are excluded simply because they have no counterparts in industry: IRS agents, customs inspectors, air traffic controllers, and the like...

...They are, in fact, busy people, dependent on the career civil servants who do the commissions' real work and greatly influence the conclusions...

...Reassignments and adding duties are among available alternatives for managers...

...But that doesn't make the resulting salary figures, based on the highest-paying two or three per cent of American business organizations, any more representative...

...Now, lots of people have the marvelous faculty of being able to cork off in a large, dull meeting...

...I find it difficult to get past this point without recalling an incident from my own service in the Voice of America at a time when John Chancellor had just been appointed the VOA director...

...The techniques used in this annual exercise, however, are seriously suspect...

...Back before World War II, the Commission itself classified jobs throughout the federal system...

...That's not likely to happen as long as the federal pay machine is designed and operated by the payees...

...The budget director in cities of that size averages $31,800—compared to the more than $50,000 salary of the chief budget officer in any federal agency...

...A federal employee who averaged $12,000 a year over his 30 years of service and retired five years ago, age 55, at an annuity of $20,000 (based on his "high three") would see that annuity go above $30,000 this year...

...The percentage of overgrading was higher in the higher grades, reaching 26 per cent at Grade 13...

...Adding duties" usually amounts to beefing up a job description rather than changing the nature of the job...

...You have to settle for the smallest number that will give some balance to your diet...

...Job descriptions" are designed to provide the details on a particular post in the bureaucracy...

...The theory is simple: If the job standards describe the level of skill and responsibility of a GS-14, all BLS has to do is find the private sector employees whose jobs match that same standard...

...But it is they and not the vacator (who may be leaving for any of a variety of reasons which he ennobles with his duty-to-family statement) who reflect what the government has to offer in its competition with industry for talented people...

...private industry and other groups in an effort to resolve different viewpoints regarding key matters of management and organization"—in short, he could be relied on to fill in for Kurt Waldheim on a moment's notice...

...The Carter administration's proposed "pay reform" legislation, currently being contemplated in the congressional navel, calls for pay comparability to be based on "total compensation...

...Job descriptions are the superheated air that lifts the federal pay balloon aloft...

...On the private side of the equation, BLS goes out and visits employees, observing their actual duties...

...But the talent it takes to fall asleep when you are one of four people sitting around a table presided over by your boss was Bledsoe's particular genius...

...comparative paylines...

...But for several reasons, there was no dearth of candidates for civil service jobs...

...at the GS-12 level going into one pot, those at the GS-11 level into another, and so on...

...The job mixes at certain of those levels," the GAO noted, "contained disproportionate numbers of jobs which were highly paid in the private sector, which resulted in an upward bias of the average 'work level rates...

...Civil service employees argue that they, unlike most private employees, contribute to their retirement fund—seven-and-a-half per cent of their salary...

...And Two Vegetables But while the number of jobs surveyed may well be statistically adequate, when the number is as small as it is the selection of jobs to be surveyed can skew the private payline one way or another...

...This is not to suggest any dishonest number-switching on the part of the officials concerned...

...Still, although "comparability" cannot— and should not—be achieved in every government post, by any fair comparison the bulk of civil servants are far better compensated than the general public for whom they work...

...Beyond the year-by-year security federal employment offers to the competent and incompetent alike, there is the ultimate security: the fact that for the federal employee there is no longer any mandatory retirement age—he can go doddering into eternity at full pay, each year presenting him with a pay increase to bring him up to "comparability" with the private sector...

...The worker or executive in the business world faces the prospect of salary loss from any of a number of causes: layoffs due to localized or widespread recession, performance considered unsatisfactory by his superiors, bankruptcy of his company, etc...

...Bledsoe's head would fall forward, snapping his eyes open, and then be brought temporarily upright...

...You include small and large firms, average them out, and you end up with a scale of average salaries, ranging from those paid starting accountants to those paid accountants in the more demanding and responsible positions...

...Commissioners of social services in large cities average $33,000—a salary exceeded by roughly 12,000 employees in HEW, our federal social service agency...

...Even so seasoned an observer of the federal workforce as Mike Causey of The Washington Post referred to civil servants as being "held down...

...Such action," he wrote, "is generally a last resort...

...And federal salaries, it turns out, are substantially higher than those of any state except Alaska...

...Chancellor was taken with an idea he had for giving satellite weather reports to areas to which we were broadcasting...

...Things equal to the same thing will be equal to each other...

...Erasing this remaining disparity became a respectable item of reform in the late 50s— who could oppose equal pay for equal work?—and in 1962, Congress formally established the principle of "comparability" between federal jobs and equivalent work in the business world.* To put this comparability principle into effect, the Bureau of Labor Statistics (BLS) was charged with designing annual surveys to provide information on salaries in the private sector for use as a yardstick against those in the federal service...

...Even if one could untangle that syntax, any impression of civil servant impecuniosity that could be salvaged would be hard to reconcile with the data compiled in the July 1979 Survey of Current Business, which shows that in 1978, federal employees earned an average of $18,988 compared with an all-industry composite average of $13,275...

...they represented less than one per cent of grade 5 employees, but had a 60-per-cent influence on that portion of the private payline...

...Similarly, at the loftier grade 15 level the only three, jobs selected for surveying in the private sector were (and still are) attorney, engineer, and chemist—occupations that are among the highest paid in private industry...

...One instance may suffice as an example of what "reassignment" often means...

...If you take what a job description says a federal manager does, and find someone in the private sector who does those things, you'll discover he has a high salary indeed...

...OPM, which was carved out of the old Civil Service Commission last year, largely disclaims any responsibility for such "overgrading...

...On the government side, BLS conducts no on-the-scene investigations...

...The 1970 revision of the pay comparability laws under which they operate speaks only of salaries...

...Unless the president acts to increase or reduce the recommended raise, it automatically goes into effect on October 1 of each year...

...Estimates of the potential savings to the taxpayers range from the administration's "$3 billion over the next several years" to the Chamber of Commerce's "immediate savings of $10$14 billion...

...Let Sleeping GS-12 s Lie...

...But they are not equal...

...For it is unlikely that the administration will delve very deeply into the true cost of pension benefits— much of which is an unfunded liability...

...When BLS sallies forth into the private sector, it is these disembodied job standards that it compares with the people it finds...

...In fact, the seven per cent, plus the "in-grade" increases which virtually all federal workers receive, plus the additional pension benefits growing out of the raise, amounted to about an 11-percent increase— decidedly in excess of the guidelines...

...In the small enterprise, it seems, employees have a disorderly tendency to pitch in here and there with whatever task needs doing at the moment...

...The salaries of all the jobs at each level (as measured by the all-important "standards") are averaged together—accountants, attorneys, etc...

...It is true, as government officials maintain, that large establishments frequently duplicate more precisely the jobs found in governmeht...

...See also "What's Wrong With the Civil Service," The Washington Monthly, April, 1977.] A GS-14 (of whom there are 55,000 in the federal realm) may spend his day leafing through old reports and looking out the window, but his job description says he has "extensive and frequent contacts with key officials and top management of the same and other establishments, other government agencies, State officials...

...Unreported, because they are not newsworthy, are the multitudes of equally qualified applicants who scramble after the vacated job...

...Still more of the occupations are excluded simply because the statisticians have deemed that a less extensive survey can still yield a statistically sound result...

...It makes a big difference which vegetables you choose...

...You want vegetables for dinner," explained one OPM official, "but do you want 50 of them...

...The writing of the job description is a practiced art—and the higher the grade, the greater the scope for what one OPM official referred to as "journalistic freedom" in describing the alleged duties that justify a given level of pay...

...So, although over 76 per cent of GS-15s are not lawyers, engineers, or chemists, the salaries business pays for people in those three fields is the basis on which all GS-15 salaries are annually determined to be lagging behind salaries in the outside world...

...Carter, mindful of his own inflation guidelines and of an electorate grown increasingly impatient with the high cost of government, announced he would limit the raise to 5.5 per cent...

...OPM officials point out that their omission is not a matter of negligence on their part...

...The federal version of comparability is based on something called the PATC survey—an acronym denoting a selected group of professional, administrative, technical, and clerical jobs in the private sector...

...You see, of the 436 white collar occupations listed in government work, only 22—representing about 23 per cent of the federal force—are "matched" in the survey of the private sector...

...increases by other government people in what is now OPM...

...in dollar terms, these employees were being overpaid an average of $7,344 per year...

...Chancellor, one of the highly-paid special assistants he had inherited (for our purposes, Bledsoe), the weatherman, and I sat at a small table...

...Inevitably, the commissions also recommend sharply increased pay, particularly for the elite class of civil servants who help shape the recommendations...

...267.80...

...Instead, what is matched to the job standards is that flight of the federal imagination known as the "job description...

...The pension of the federal white collar worker is based on his highest three-year average...

...Officials of the OPM dismiss this comparison as an apples-and-oranges thing— the apples being working Americans at large and the oranges the federal force, which has a much higher component of professional and administrative personnel...

...Job standards" are lists of criteria and responsibilities that purportedly describe the various grades in the civil service (federal employees are paid by the grade, a GS-12 writer getting the same as a GS-12 physicist...

...We go to a small business," explained an OPM official, "and find that the boss's secretary is somebody who not only types letters but also makes up the payroll...

...It doesn't work that way at all...

...Also left out of the PATC survey are the employees of state and local governments, who have come to constitute 14 per cent of the working population of the United States...

...Instead, the government compares federal to private jobs using a medium called the federal "job standard...

...Certainly, some of the oddities involved in the process of comparing federal and private pay bring to mind the story of the fellow who was asked, "How's your wife...

...Accountants are employed in a variety of private industries...

...Back when men wore watch chains across their vests, compensation for federal employment was something less than lavish...

...and for a firm with more than 1,000 employees, the wage average is...

...That cuts out of the survey the salaries paid in 96 per cent of manufacturing and 98 per cent of retail firms...

...For example, although 70 per cent of employees at Grade 5 were clerical, of the ten jobs surveyed at that level in the private sector, only one was clerical—which gave clerical work only a ten-percent influence on the outcome...

...and replied, "Compared with whom...

...His grade secure, he was then "detailed" back to his old job, where he is again happily writing speeches...

...Plans nurtured for years within the bureaucracy—such as the recently established Senior Executive Service—emerge as "reforms" endorsed by these commissions...

...poverty becomes the mark of the average federal employee...

...Additionally, the civil servant's protection against job loss because of poor performance completely removes from the comparability process the element of quality...

...It is not a gift, however, avidly sought out or particularly well paid in private industry...

...in fact, an employee's entire contribution has been returned to him by the time he has been retired 18 or 19 months...

...Other federal jobs, while having private counterparts, are not considered matchable by BLS...

...In a series of random audits performed in a variety of federal agencies between 1976 and 1978, the Civil Service Commission (not the system's most severe critic) found that 11 per cent of federal jobs were overgraded...

...If federal workers are placed under mandatory wage controls for the second straight year," declared the Federal Employees Wage Council (consisting of the heads of the major employee unions), "the president will sound the death knell for the principle of comparability...

...From time to time these recommendations are given credence in the public mind by newspaper accounts of a high government official who is returning to the presidency of the college he left, or to the executive board of his corporation, because he can't get along on his $50-$60,000 government salary...

...At the Department of Health, Education and Welfare, one of the more egregious offenders, a three-year "correction program" was instituted...

...Yet, during that same period, the superiority of the federal pay average over the all-industry average steadily increased from 27 per cent in 1962 to 47 per cent in 1978...

...it means that the pay of people who are capable of holding their jobs is being compared on equal terms with that of people who constitute a mix of the capable and the incompetent...

...The generosity of the benefits under the federal pension system is truly remarkable...

...It doesn't however, show up on the A federal employee who averaged $12,000 a year could see his retirement pay go above $30,000 this year...

...Lest these disturbing findings cause too much anxiety in the ranks, Civil Service director (now OPM director) Alan Campbell pointed out that it wasn't necessary to downgrade the overgraded employees...

...Others were attracted by the security government work offered...

...A speechwriter's job was found to be overgraded and was reduced from a GS-15 classification to a GS-14...

...The Best Compensation The notion that government pay is low and needs to be boosted if we are to attract quality people to serve is periodically given new support by presidential pay commissions...

...When measured up against the broader, generic "standards," these job descriptions determine each federal employee's grade level...

...The difference between the two determines the percentile increase OPM deems necessary to bring federal pay up to par...

...And the GAO, in a 1973 report on the survey, noted that the jobs selected for PATC were not representative of the composition of federal jobs at several of the grade levels...

...Piled on top of these rather glaring distortions in the official comparison of private and public wages are some sheer omissions: important elements of compensation that the government doesn't even try to compare...

...But the explanation is not totally satisfying...

...I've decided that it would be unfair of me to ask my family to sacrifice any further," is the usual quote...

...If comparability is to be achieved, it will require not an upward but a downward revision of government compensation...

...And there was the pension system which, although modest, was better than anything else around, and which was calculated to compensate for the probability that the civil servant was not going to be able to put aside much during his working life...

...For starters, there is the question of which jobs are included in the PATC survey...

...Even to make known the actual and projected costs would put the administration between the rock and the hard place— an enraged public on one hand, on the other a powerful federal employees' lobby, doggedly opposed to any linking of salary and benefits...

...Bledsoe's Bonus One factor simply ignored in the comparability process is an intangible job security...

...at the First National Bank of Omaha, whether to approve a mortgage loan for Millie Plotkin...

...As the weather expert talked, Bledsoe, to Chancellor's silent mortification, kept dozing off...

...As one official of OPM put it, "We are not trying to see that a secretary at the GS-7 level has the same, salary as a secretary in a business office who does essentially the same work...

...Whether or not one considers federal pensions excessive, the importance of including these benefits in any valid pay comparison is hardly arguable...

...Nevertheless, the general impression left with the public was that fairness for the federal employees had been sacrificed to the necessity of setting an example of restraint...

...The current standards take up six to eight feet on a bookshelf and reveal, for example, that the assignments of a GS-9 management analyst are "relatively routine" but "require seasoned judgment," while a GS-14 analyst issues reports "of major significance to top agency and department administrators...

...it is to suggest a built-in bias that has ample room for expression in the arcane method by which "comparable" federal pay formulas are determined...

...Their exclusion is mandated by law on the theory that local government salaries are administered rather than being a reflection of market forces...

...The time arrives for a federal pay raise to maintain "comparability" with salaries in the world of business...

...Probably the most piteous cry came from Vincent J. Paterno, president of the Association of Civilian Technicians, who wrote, "This must stop before abject Leonard Reed is a contributing editor of The Washington Monthly...

...Carter, with less fanfare than accompanied his previous announcement, relented somewhat and set the raise at seven per cent...

...But the argument is a bit disingenuous: it overlooks the considerable influence of those same officials in the drafting of that law...

...Some of the more generous plans base the pension amount on his average earnings of the last five years, which, because of both seniority and inflation, can be expected to be his peak earning years...

...It was a complicated matter and he had asked a weather expert from NBC to come to Washington to help explore the problems...

...Nobody apparently gave much thought to the fact that BLS is composed of government workers whose salaries would be directly affected by the results of the annual surveys—and that these results would be worked into a recommended scale of pay *By 1969 federal salaries had, by the government's own arithmetic, caught up with pay in the private sector, leaving only the need for an annual adjustment to maintain equality...

...Typically, these commissions consist of prominent citizens (Nelson Rockefeller headed the last one) who appear to the public to be neutral and authoritative figures...

...Relatively few government workers have the responsibilities, make the kind of decisions, or exercise the latitude that their job descriptions attribute to them...

...But with the growth of the government during and after the war, responsibility for writing job descriptions in adherence to the "standards" wasturned over to the individual agencies, where it became a wondrous thing...

...for a 50 to 99 employee firm the figure is $193.50...

...So the government paysetters turn to the big corporate hierarchies to locate work habits they find more familiar...

...But in recent years, political pressures, if not market forces, have been exerting their influence— most notably in the tension between the public labor unions, which exercise increasing clout, and the resistance of the taxpayers of local jurisdictions, who feel the tangible connection between the salaries of public employees and the size of the tax bill...

...By and large the minimum-sized manufacturing or retail establishment in which BLS will seek pay statistics employs 250 people...

...Invariably, when this payline is matched against the line that represents existing federal salaries, the private payline comes out running above the public one...

...The pension of an employee in the private sector is most generally calculated as a percentage of his average earnings during all the years he was employed by the firm...

...Comparability" does not mean that accountants, engineers, editors, secretaries, and bottle-washers in government are paid on the basis of what their counterparts in industry earn...

...But if there is no legal requirement for the federal worker ever to retire, there is one hell of an incentive...

...The process, according to BLS itself, is "surrounded by controversy because there is no single, generally accepted method of computing [the paylines...

...Ask an informed citizen who reads the newspapers and follows things like federal pay raises how "comparability" is established, and after a bit of thinking he might come up with something like this: "The government employs accountants...

...In addition, federal pensions, unlike most private pensions, are indexed to the cost of living to afford the retiree complete protection against inflation...

...So I assume what happens is that a survey is made of the salaries paid accountants in industry...

...Six of the survey jobs, on the other hand, were the higher-paying college graduate entry jobs...

...In order to protect the speechwriter against personal loss because of the error, he was moved into a GS-15 job that had become vacant in another part of H EW's hydra-headed public affairs domain...

...Unless he is something of a clod, an assistant secretary of the Treasury is likely to find it a lot more rewarding to concern himself with controlling inflation or bolstering the dollar on the international market than to ponder, as he did when he was a V.P...

...For the latest period compiled, the data show the average weekly wage in a firm employing three or fewer employees to be $158.13...

...One figure that federal employee unions have been providing to friendly congressmen is that "88 per cent of federal white collar workers are paid up to 34 per cent less than private workers in comparable jobs...

...In Grades 12 to 15, 40,798 jobs were overgraded...

...The upward pressure this selection exerts on the payline can be seen from figures put out by a different office of the Bureau of Labor Statistics, which show how average weekly wages increase in direct proportion to the size of the employing firm...

...Further distorting , the private "payline" is a series of limitations placed on the survey's scope that effectively eliminates from consideration the salaries of three fourths of all non-federal white collar workers...

...As long as these job descriptions are taken seriously, BLS will be forever comparing the salaries of GS-14 reportreaders with those of the field marshals of business...

...By mid-century, government salaries had moved up substantially, although the average civil servant's pay remained modest enough to allow some room for envy of his private-sector counterpart...

...There is a big difference between those two estimates, and a substantial part of the difference has to do with retirement benefits...

...An American Management Association survey puts the average salary of the mayor in cities of more than 200,000 population at $42,700—less than the average salary of the GS-15...

...The assistant secretary who can't get along on his $60,000 salary may not be too well attuned to the public he is there to serve, and it's a fair bet that the public interest will not be mortally injured by his departure from government...

...In 1976, "weighted averages" were introduced into the process, belatedly offering a degree of correction...

...That is no national tragedy...

...Since the payline above the GS-15 level is determined not by survey but by "extrapolation," a cynic might suspect that those at the top who choose the occupations to be surveyed are no dummies...

...We have no jobs like that in the government...

...They are the superheated air that fills the balloon-like "standards" and lifts the federal pay structure aloft...

...Although it is the exception rather than the rule, many government officials—particularly at the cabinet and sub-cabinet level—are paid less than people carrying like responsibilities in business or industry...

...Even more remarkable is that these benefits, also, are in no way included in the comparison of private and federal pay...

...The prospect of high pay is hardly the best motivation for public service...

...The amount of the increase is proposed by something called the President's Pay Agent—not a man with a green eyeshade, but a committee consisting of the director of the Office of Personnel Management (OPM), the director of the Office of Management and Budget (OMB), and the secretary of Labor...

...In 1979, the Pay Agent recommended an increase of 9.8 per cent...

...But no "pay reform" will endow the comparability process with a semblance of reality unless it takes into account the central fallacy on which the whole system now rests—the inflated "job descriptions" used in the matching of federal and private workers...

...Then you use this scale to set up comparable salaries for government accountants in comparable positions...

...A Lawyer in Every Pot On top of this mirage, BLS has built an elaborate mechanism that further deprives the comparability process of any accountantto-accountant simplicity...

...The orchestrated protest that rose from the federal employee lobby has been matched in recent times only by the poignancy of Lee A. lacocca's pleas for alms for Chrysler...

...On the basis of this series of statistical stews, BLS plots a "payline" for the private sector, running from GS-1 to GS-15...

...None of these threatens the federal worker to any significant degree surely a form of real, if hidden compensation...