Federal Pay: Are Government Workers Overpaid?

💰The Headline Number

Yes, the average federal worker earns $116,751 — nearly 78% more than the average private sector worker. But this comparison is deeply misleading. The federal workforce has a fundamentally different composition than the private sector.

There are virtually no retail clerks, fast food workers, or warehouse associates in the federal government. Instead, federal workers are disproportionately lawyers, engineers, scientists, IT specialists, and medical professionals. When you compare apples to apples — the same occupations in both sectors — the gap shrinks dramatically and sometimes reverses.

Comparing federal pay to all private sector workers is like comparing a hospital's average salary to a Walmart's. The jobs are fundamentally different.

— Congressional Budget Office, 2024 compensation analysis

📊What Most Workers Actually Earn

The $116K average is pulled up by high-paid DC-area senior positions and specialized professionals (doctors, patent attorneys, financial regulators). Here's what the actual distribution looks like:

Nearly half the federal workforce earns under $100,000. The 'overpaid bureaucrat' is a senior GS-14 in Washington, not a VA nurse in rural Oklahoma.

📋The GS Pay Scale Explained

Most federal workers are paid under the General Schedule (GS) — a 15-grade system created in 1949. Each grade has 10 steps, and workers automatically advance through steps based on time served. GS-1 is entry level; GS-15 is senior professional. Above that, the Senior Executive Service (SES) handles top leadership.

The bulk of the federal workforce clusters at GS-11 through GS-13 — the “journeyman” level where experienced professionals land. At 377K employees, these three grades alone account for a major share of the GS workforce.

The GS system's fatal flaw: a brilliant analyst and a mediocre one on the same grade and step earn exactly the same salary. Time, not talent, drives pay.

🏆Who Earns the Most

The highest-paid agencies are financial regulators and specialized commissions — organizations that compete directly with Wall Street for talent. The highest-paid occupations are medical professionals and attorneys.

Highest-Paid Agencies

Highest-Paid Occupations

Medical Officers top the list at $296,932 average — but the VA employs 33,816 of them, and they're still paid below private practice rates. Securities examiners at $239K compete with Wall Street compliance roles paying $300K+. Context matters.

🗺️The DC Premium

Washington DC and its suburbs are home to a disproportionate share of senior-level positions — headquarters staff, policy analysts, and senior executives. These positions earn 20-40% more through locality pay adjustments meant to match the area's high cost of living.

This geographic concentration dramatically skews the national average upward. A GS-12 in San Antonio earns roughly $80,000. The same grade in DC earns $100,000+. Same job, same grade — different number.

Roughly 16% of federal workers are in the DC metro area, but they account for a disproportionate share of senior positions. Remove DC and the 'overpaid' narrative collapses.

✍️The Real Problem

The “overpaid bureaucrat” narrative is both overstated and understated. Overstated because most federal workers earn fair market wages for their education and experience — CBO consistently finds that workers with professional degrees earn less in government than they would in the private sector.

But understated because the pay system is broken. The GS scale rewards longevity over performance. Step increases are virtually automatic. Firing is nearly impossible — fewer than 0.5% of federal workers are terminated for cause in any given year. This isn't a workforce compensation problem. It's a management accountability problem.

The fix isn't cutting salaries — that just drives top talent to the private sector and leaves the mediocre behind. The fix is reforming the system: tie pay to performance, make firing possible, and give managers the tools to build excellent teams.