The 1 percent: D.C. metro area the wealthiest in the nation


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posted at 4:45 pm on October 19, 2011 by Tina Korbe
printer-friendly Yet more evidence that the Occupy Wall Street crowd should march on Washington instead. The nation’s capital is also the country’s wealthiest metropolitan area, according to U.S. Census data. Bloomberg News reports:

Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.

The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.

Total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009, according to Bloomberg News calculations of Commerce Department data. There were 170,467 federal employees in the District of Columbia as of June. The Washington area includes the District of Columbia, parts of Northern Virginia, eastern Maryland and eastern West Virginia.

Let me parse one of those numbers a little bit. The average federal worker receives compensation of $126,369. OK, fine, right? I’m not about to cry “unfair” about a person’s salary and benefits, am I? Not when I’ve been criticizing OWS-ers day in and day out?

Actually, I am. First, remember that, even though federal workers pay taxes themselves, their salaries are also paid by taxpayers. Again, fine. As a society, we agree that government — especially our particular form of government — adds value to our lives and the economy by, among other things, enforcing property rights, without which enforcement the capitalistic system would struggle. We need a government, the government needs workers and those workers need to be paid. Federal workers deserve to keep the fruits of their labors no less than the rest of us.

But, secondly, let’s remember that the federal government isn’t fully subject to the marketplace. As The Heritage Foundation’s James Sherk explains, “The government earns no profits and does not go out of business. Competition for workers limits the government’s ability to pay below market rates. Nothing, however, prevents the federal government from paying its employees more than they would earn in the private sector.”
And, in fact, that’s exactly what the federal government does — overpays its employees. After controlling for differences in education, experience, occupation and other observable characteristics, federal employees earn hourly wages 22 percent higher than those of comparable private-sector workers.

Even Alan Krueger, the chairman of the president’s Council of Economic Advisers, concedes: “Federal government appears to consistently pay higher wages than the private sector for comparable employees.”

And what about those added benefits? The average federal employee’s benefits package is also greater than a comparable private-sector worker’s — by about 30 to 40 percent. Simply reducing federal compensation to market rates could’ve cut $47 billion from the deficit this year.

The federal government should be held accountable for the way it spends taxpayer money — and inflated federal pay seems to me to qualify as an irresponsible use of it. Taxpayers should demand better.

read it all here.
The 1 percent: D.C. metro area the wealthiest in the nation « Hot Air

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