Congress recently voted to significantly cut the budgets for Congressional office and committee staffing, and these cuts are flowing through as pay cuts for congressional staffers. Of course, current and former congressional staff are complaining, saying that congressional staff are already underpaid and these cuts will cause a loss of quality talent.
Congressional pay comparisons are problematic, for a couple of reasons. One is that working for Congress provides a number of intangible benefits, including prestige and the opportunity to do interesting work that may change public policy. Paul Thacker and Nick Swellenbach note that the average House press secretary makes a salary of $61,628, while similar workers in the private sector make $91,690. This comparison does not adjust for the fact that dealing with press on behalf of a member of the House is more interesting than doing so on behalf of a trade association.
But there is a second, significant problem: government employees tend to have a much higher benefit load than private employees. While I don't have numbers specific to Congressional staff, the average federal employee receives over $40,000 per year in non-cash compensation, compared to about $10,000 in the private sector. This enormous gap is only partly explained by higher skill levels among federal workers, and is a significant offset to lower salaries.
High non-cash compensation is a problem for two reasons. One is that non-cash compensation costs are often difficult to measure (especially pension benefits) and therefore the cost of public employment is opaque to taxpayers. But the other is that non-cash compensation is inefficient, because it is non-fungible. The value that employees place on benefits may be lower than their cost to provide.
In Congress, a key example is that staffers receive free parking at work, a highly unusual benefit for workers whose offices are located in a central business district with very high land values. Indeed, some of Washington's most expensive real estate, adjacent to the Capitol and congressional office buildings, is taken up with surface parking lots for congressional staffers.
If congressional employees are feeling squeezed on their wage compensation, why not offer them a deal: give up some of your non-cash compensation, and we will replace it with more cash. Instead of cutting staff budgets so much, Congress could sell off its parking lots and therefore greatly reduce the opportunity cost it incurs by holding valuable land. Employees (and Members) could pay for their own parking--but many would start taking transit, because they value parking on the Hill at a lower price than it costs to buy in the open market. Other non-cash benefits could also go on the chopping block.
A similar deal could be offered much more broadly to public employees at all levels. Start for the next couple of years from a position of a wage freeze. But then set up state and federal commissions where both employees and members of the public can propose the elimination of non-cash benefits. Savings from those eliminations would be used, dollar-for-dollar, to provide wage increases.
This would result in a pareto improvement: public employees would have a compensation package that they value more, but does not cost any more to provide. It's a rare win-win solution to a budget problem, and deserves more attention.