Fox Uses Misleading Cato Data To Falsely Claim Federal Workers Are Overpaid

Fox Business' Stuart Varney cited misleading research from the Cato Institute to disparage federal employees, claiming they make 78 percent more than private sector workers. In fact, when compared to private sector workers in similar occupations and with similar levels of education, government employees are often paid less than their private industry counterparts.

On the October 9 edition of Fox Business' Varney & Co., host Stuart Varney and Fox contributor Tammy Bruce used a misleading report from the right-wing Cato Institute to mockingly claim that federal workers are paid too much. Without any discussion of the different types of jobs performed by government and private sector employees, Varney and Bruce slammed “super, super rich” federal workers for contributing to economic inequality in Washington, D.C.:

TAMMY BRUCE: Well look, they're better than us, aren't they? And they deserve more money because they do such-- much more difficult work, and they're just more important and better people. Look, these are the people that all this-- those are the only people politicians really see. Its unionized of course. It goes through the framework of government and politicians wanting to spend more, make things bigger, make things worse. And they're right on that track.

STUART VARNEY: Look what is on the screen. Six of the top--of the richest neighborhoods are right around Washington, D.C.

BRUCE: But that's very small area of D.C., of course. And the talk about the distance between the poor and the wealthy. You see it. Government--super, super rich. And then those other neighborhoods in Washington, D.C, the poverty, the unemployment, the abandonment. That's classic big government where everybody else get pushed out and the people who genuflect, who pay allegiance to that big federal government get all the money, and everyone else suffers.

According to Cato's October 2015 report, total salary and compensation for an average federal worker in 2014 was $119,934 -- compared to just $67,246 for the average private sector worker. Cato's analysis blamed supposedly generous pay for driving federal budget deficits and demanded that compensation for federal jobs be reduced to better reflect the private sector. Cato even acknowledged that federal workers typically have higher levels of education and professional experience than the private sector as a whole, but still recommended that their compensation be arbitrarily reduced -- a common refrain among right-wing think tanks.

In reality, federal and private sector workers are compensated differently because they perform different jobs and have strikingly different levels of education, on average. According to a January 2012 report from the Congressional Budget Office (CBO), “33 percent of federal employees work in professional occupations, such as the sciences or engineering, compared with only 18 percent of private-sector employees” and “21 percent of federal employees have a master's, professional, or doctoral degree, compared with 9 percent of private-sector employees.”

The same CBO report found that after accounting for education and other “observable characteristics,” average federal wages were only 2 percent higher than would be expected in the private sector.

According to the findings of an exhaustive November 2014 review by the Federal Salary Council, federal employees nationwide face an average pay disparity of 35 percent compared to private sector counterparts performing “the same levels of work.”

Federal worker occupations and levels of education are too different from that of the private sector to easily compare side-by-side, a fact that even Cato's Chris Edwards -- who authored the study used by Varney & Co. -- readily admitted in a July 23, 2012 interview with The Washington Post:

Chris Edwards, director of tax policy studies at the Cato Institute, a conservative think thank [sic],and author of several papers concluding that federal workers are overpaid, acknowledged Monday that “it's hard to make an overall sweeping assessment” of whether private- or public-sector employees make more.