Andrew Biggs at AEI documents that reducing federal employee compensation to market levels could save taxpayers $77 billion per year. He estimates that Federal workers receive a salary premium of 14 percent, and a benefits premium of 63 percent. http://www.aei.org/docLib/AEI-Working-Paper-on-Federal-Pay-May-2011.pdf
There's been lots of argument about the validity of these calculations, and while you can legitimately argue whether it's a 63% premium or a 30% premium, you can't argue with the fact that the quit rates are low and the ratio of applicants to openings is high. If nobody quits federal jobs and everybody wants to have them, then that’s the market telling you that these are pretty sweet positions.
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