Pay Differentials Between Federal Government and Private Sector Workers: Reply

Smith, Sharon P.
October 1977
Industrial & Labor Relations Review;Oct77, Vol. 31 Issue 1, p82
Academic Journal
The article focuses on the author's views on pay differentials between federal government and private sector workers. During the 1960's the federal pay procedures were revised in accordance with the principle that federal pay rates be comparable with private enterprise pay rates for the same level of work. These procedures have since been shown to impart an upward bias to federal salaries. The author attempts to analyze the relationship between federal and private sector pay, using data and estimation techniques that were unaffected by this bias. The U.S. President John F. Kennedy, in proposing this pay policy, had maintained that its purpose was to assure equity for the Federal employee with his equals through the national economy. This analysis was not intended to form a precise means for reforming federal pay policy but rather a general basis for evaluating the need for the reforms instituted in the let's and the effectiveness with which they were implemented. Under these assumptions, the analysis does indicate the order of magnitude of advantage associated with federal employment.


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