Human Capital:

Review of Compensation Comparability Report

GGD-96-34R, Oct 30, 1995

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Pursuant to a congressional request, GAO reviewed a report comparing federal civilian pay and private-sector pay. GAO noted that: (1) in contrast to a number of other studies, the report concludes that federal civilian employees receive about 51 percent more in salaries, wages, and benefits over their careers than do private-sector employees and that a 33.7 percent wage reduction is needed to bring total federal compensation in line with total private-sector compensation; (2) federal pay policy is based on ensuring pay comparability without consideration of benefits; (3) the government does not achieve optimum efficiency if it overpays or underpays employees; (4) it is more difficult to compare benefits because they vary considerably; (5) the report's methodology is invalid and its assumptions are not well supported; (6) the report does not adequately compare federal and private-sector compensation, take into consideration occupational differences between the two sectors, and address private-sector employment advantages and federal employment disadvantages; and (7) the report fails to justify using identical starting salaries, greater projected federal career salaries, and assumed but unquantified advantages allegedly enjoyed by federal employees.

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