Government Employment is the Last Great Source of Middle Class

According to the Bureau of Economic Analysis for 2008 (an organization within the Department of Commerce), the average federal employee made $79,197, excluding benefits; when benefits were added in, the average federal employee's total compensation was $119,982. The average private sector employee made $49,935; when benefits were added in, the average private employee's total compensation was $59,909. Stated differently, the benefit cost for the average federal employee back in 2008 was $40,785; the average benefit cost for private sector employees for the same year was $9,974. [Ralph Smith, Federal Pay Gap With Private Sector Growing, FedSmith, August 25, 2009]

America's Richest Counties are in the DC Suburbs

May 13, 2011

Forbes.com - If you want to get a sense of what an economic powerhouse Washington has become in recent years, look no further than the Virginia suburb of Falls Church.

Boasting a strong school system and positioned about six miles from the nation's capital, Falls Church

has for years enticed rich families, making it the nation's richest county with median annual household income of $113,313.

"It indicates that the City of Falls Church is located in a healthy economic area in the national capital region," says Wyatt Shields, city manager for Falls Church. "We are proud of the fact that we take advantage of the city's healthy economic area to attract people to live here."

It's No. 1, but it isn't alone. In fact, four of the top ten richest counties in the nation are concentrated in the Virginia suburbs of Washington, and a fifth, Howard County, Md., is equidistant between Washington and Baltimore.

In recent decades northern Virginia has become an economic dynamo, driven by a private sector that feasts on government contracting. These counties are also home to corporate lobbyists, lawyers and consultants who work in or around the nation's capital, soaking up federal government spending. And government-related hiring manages to keep the unemployment rate in places like Falls Church City down to 5.7%.

To determine America's richest counties, we looked at median annual household income estimates from 2005 to 2009 in each county in the nation, provided by the U.S. Census' American Community Survey. The estimates are in 2009 inflation-adjusted U.S. dollars.

Nader Baroukh, the mayor of Falls Church, is not shying away from the designation of being the richest, but he does disagree with one of the U.S. Census' conclusions.

"We are actually a city and not a county, but I can't comment on how the Census puts its data together," says Baroukh. "We are a small jurisdiction, about 2.2 square miles, and I think given our location it's a very attractive place to live and our top schools are one of the big attractions."

Falls Church is in fact an independent political subdivision of the state, but most Virginia counties are much larger than Falls Church, which has a population of 12,330. Whatever you want to call it, even wealthy Falls Church is not exempt from the kind of tough fiscal realities facing counties and cities across the nation. Fall Church has cut 14% of its workforce over the last three years and raised property taxes.

Nearby Loudoun County, Va., used to be a sleepy rural community just a few decades ago, but in recent years it has become a technology center and a popular Washington suburb. It is now the second-richest county in the nation with median annual household income of $112,021. Another Washington county, Fairfax County, Va., rounds out the top three with annual median household income of $104,259.

Making the median high income in Fairfax County even more impressive is the fact that it has 1.1 million residents. This populous county has a massive federal government presence and is home to companies with strong connections to the government, like Freddie Mac, and intelligence agencies like the CIA and the National Counterterrorism Center.

Only counties that are part of the New Jersey suburbs of New York City can rival Northern Virginia. The richest county in the nation outside of Virginia is Hunterdon County in northwest N.J., where the median annual household income is $102,500. Rural Hunterdon County has become a magnet for rich commuters heading to New York City and even Philadelphia. Morris County, N.J., where the taxes are high but the median household income is $96,316 or Somerset County, also are among the richest counties in the nation.

Most of the richest counties in America are in the East. The richest county in the Western United States is Los Alamos, N.M., where decades of government money spent on nuclear weapons has resulted in median annual household income of $100,423. Most of the 18,000 residents of this county, which is New Mexico's smallest, live in Los Alamos or White Rock and the biggest employer is the Los Alamos National Laboratory.

Here are the five richest counties in America:

5. Howard County, Md.
 
Median annual household income: $101,003

Located between Baltimore and Washington, this fast-growing county boasts a fantastic school system, attracting rich residents.

4. Hunterdon County, N.J.
 
Median annual household income: $102,500

This county in northwestern N.J. has the highest median annual household income in the country outside of the Virginia suburbs. A rural area, it borders Pennsylvania and has become home to both New York City and Philadelphia commuters in recent years.

3. Fairfax County, Va.
 
Median annual household income: $104,259

Another Washington county, Fairfax County, Va., rounds out the top three. With 1.1 million residents, this populous county has a massive federal government presence. It is home to companies with strong connections to the government, like Freddie Mac, and intelligence agencies like the CIA and the National Counterterrorism Center.

2. Loudoun County, Va.
 
Median annual household income: $112,021

The second richest county in the nation used to be a sleepy rural community just a few decades ago, but in recent years it became a technology center and a popular Washington, D.C. suburb.

No. 1 Falls Church County, Va.
 
Median annual household income: $113,313

Boasting a strong school system and located about six miles away from the nation's capital, Falls Church has for years enticed rich families, making it the nation's richest county.

Click here to see more of America's Richest Counties

Is the U.S. Government the Last Great Source of Middle Class American Jobs?

August 10, 2010

End of the American Dream - Once upon a time, private industry was the engine of the great American economic machine. From coast to coast, expanding industries spawned massive cities filled with optimistic Americans who were able to achieve middle class lifestyles on the good jobs that American companies were providing for them.

The largest middle class in the history of the world had been created and it seemed possible for just about everyone to live the American Dream. But today all of that has changed. The private sector is being dominated by gigantic global corporations that have shown absolutely no hesitation to ship jobs overseas. Millions upon millions of good jobs have been sent to China, India and the third world and they are never coming back.

Pay and benefits for middle class Americans working in private industry have been slowly eroding and are now at dangerously low levels. Meanwhile, working as a "government servant" has never been more rewarding. Today, the average government worker makes far more than the average worker in the private sector does.

How much more?

Well, according to a new study from the Heritage Foundation, U.S. government workers earn 30 to 40 percent more money than their private sector counterparts on average.

So, in essence, the "servants" make substantially more money than the taxpayers who employ them.

Isn't the system great?

In fact, according to the study, if you add in retirement and health care benefits, the average federal employee now earns nearly twice as much as the average private sector employee.

Ouch.

Just check out this excerpt from the study....

"Including non-cash benefits adds to this disparity. The average private-sector employer pays $9,882 per employee in annual benefits, while the federal government pays an average of $32,115 per employee."

Yes, it is very good to be a U.S. government employee in 2010.

Meanwhile, the private sector continues to bleed jobs. The U.S. economy lost 131,000 more jobs during the month of July. Needless to say, the vast majority of those job losses came from private industry.

The truth is that it is becoming very, very difficult to live a middle class lifestyle if you do not work for the government.

A reader of this column named Tim recently shared the difficult experiences he has been going through as an employee in the private sector....

Been with my current company over 12 years. Last pay raise I got was six years ago. The last two years we’ve had our salaries actually reduced. 401K matching, vacation time, company stock purchase plans, actual pay, all gone or reduced. Me and buddies figure it to be about ~14% overall reduction. At my level I was averaging a 10% annual bonus (which are now a vague memory).

All in all, I am NOW working longer hours, at a much less satisfying job (it actually sucks), for about 20-25% less than I was making just 3 years ago.

My company was once a very highly respected company for the way it treated employees and the loyalty that created. We were long term focused, made great products. But now? ha! Upper management pushes harder and harder so they get their *quarterly* bonuses. Below VP level, people, and I mean a LOT of people are now pushing 55-60+ hour weeks for fear of losing their jobs.

With all this said – I still consider myself LUCKY. Even with the ~20% pay reduction, I still make very good money. But one thing has drastically changed. I no longer circulate my money. It all goes into savings. Every spare penny. And while this is good for me, we all understand it is at the expense of the local economy.

The saddest thing is to see my kids now graduating from college (two in the last four years!). They are entering a dismal job market with no hope of “true” recovery in the foreseeable future.

Of course the U.S. government cannot keep paying their workers above market wages forever.

But for now, if you need a good job and can stand to do it, working for the U.S. government pays really, really well.

Might as well jump on the gravy train for as long as it lasts.

So is this a good system?

Of course not.

The true wealth of a nation is produced by the private sector. But unfortunately, the private sector is providing fewer and fewer good jobs in the United States.

The truth is that the U.S. government has become the last great source of middle class American jobs. This will not be able to last indefinitely, but for now those seeking the safety and security of a job ("just over broke") should be looking to the government because the chances of getting a great job in the private sector are getting slimmer by the day.

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