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And yet they're competitive for the top 5% compensation packages for their educational background? My guess is that it's probably a smaller paycheck but with shorter hours and better job stability, which isn't necessarily off the market average seller's indifference curve. In the other direction, it's worth noting that sometime in the last decade OPM spun up special non-GS pay scales for doctors and IT guys because even with benefits and job stability the GS compensation packages weren't attracting enough new hires.
That's market heterogeneity for you. Grinding billable hours at biglaw isn't a bad deal for the right kind of person, spending a month at a time at sea in the Alaskan fishing fleet isn't a bad deal for the right kind of person, cutting firewood for cash sale when you feel like it and living cheap isn't etc. But none of it, in expectation, is a free lunch. You could argue, of course, that the government shouldn't be in the pipevine swallowtail business at all, but that seems to me like an entirely separate matter.
It isn't though. That is a major issue with federal employment, that there is no similar market based job, because there is no market for the "skills" for huge swathes of the workforce. They'd have to take large pay decreases going into the private sector because they are, typically, extremely over-credentialed but also not very good at doing things that produce value. Much of the government is full of pipevine swallowtails. Large numbers of people who's job is to give out free money for various projects.
If your definition of "real value" implies a market outcome, sure, that follows. I still think this is separate from the question of whether Federal employment is a good deal for the employee, but at this point I'm content to let anyone still reading make up their own mind on a) the object-level goodness of the deal and b) whether these are, in fact, separate questions.
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