The Tax Policy Blog has a good article which quotes Chris Edwards from his Washington Post article, but does not paraphrase the most important element:
Why is federal compensation growing so quickly? For one thing, federal pay schedules increase every year regardless of how well the economy is doing. Thus in recession years, private pay stagnates while government pay continues to rise. Another factor is the steadily increasing "locality" payments given to federal workers in higher-cost cities.
This can be combined with a BLS News Release which states:
Average weekly earnings rose by 4.1 percent, seasonally adjusted, from July
2005 to July 2006. After deflation by the CPI-W, average weekly earnings
decreased by 0.1 percent. Before adjustment for seasonal change and inflation,
average weekly earnings were $571.48 in July 2006, compared with $542.49 a year earlier.
combined with:
U.S. single-family housing starts fell 2.3 percent in July to an annual pace of 1.452 million units, the slowest since May 2003.
Overall housing starts were down 13.3 percent from July 2005. Total housing permits were down 20.8 percent from the same month last year.
This means that the 62% advantage of Federal Employees over Private Sector Employees will increase, while Total Compensation for Federal Employees will increase even more rapidly (now standing at twice that of Private Sector Workers). Reminder to myself: Check the growth of Federal Employment. A 20% drop in Housing Starts average What?--a probable 31% drop in Construction employment (including Supplier Payrolls and maybe a 9% increase in Emergency Room visitations?). lgl
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