Shouldn't We Be Concerned About Ballooning Public Sector Pay?

by: David I. Templeton, CFA

An interesting article appears in USA Today showing the number of Federal workers earning more than $150,000 has increased tenfold since 2005. It is the private sector that ends up paying these wages. This rate of growth in public sector compensation is unsustainable.

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From The Blog of HORAN Capital Advisors
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The article notes:

  • The Defense Department had nine civilians earning $170,000 or more in 2005, 214 when Obama took office and 994 in June.

  • The biggest pay hikes have gone to employees who have been with the government for 15 to 24 years. Since 2005, average salaries for this group climbed 25% compared with a 9% inflation rate.

  • Federal workers earning $150,000 or more make up 3.9% of the workforce, up from 0.4% in 2005.