Higher salary or better benefits?

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outtawhack said:   

Huh?

Contractors are being cut left and right, especially in the defense sector. The government employees are picking up the slack, being asked to take extra workload, and in some cases, take extra workload and also get furloughed. I have a few friends who are cursing their luck by being deemed "essential", when they would've preferred a furlough.

There is not a worse time to be a contractor. Contracts are being killed, re-negotiated, consolidated and deferred. Lots of beltway bandits are being let go already, on the simple fear they can't afford to keep contractors and consultants on the bench and have had indications contracts are going to be vaporizing soon.

That said, DC/government contractors are a perfect example of better pay vs better benefits. I would guess at least 35-40% of the DC area workforce is over 40 years old and collecting a pension, be it military or civil service.

So many "high paying" jobs in DC have terrible benefits, because they hire these more senior ex-military/ex-government employees who receive their benefits from uncle sam for life. EG - most contractors I know were officers who have a clearance and important skill, have a pension and full healthcare for life, and go back as contractors collecting 100-200k in salary with crappy benefits.

Most of those folks can't care less about losing their job. They can always retire, take a few years off, look for a gig somewhere outside of DC where their specific skills are required, etc. The profile of an individual the OP posted about should be s--tting their pants about now, though.


I disagree. About the only segment of the DoD that is not being cut are contractors. Put another way...when the military draws down out of Afghanistan, who is going to replace them? Contractors. Who is flying the UAVs? Contractors. Who mans the guard posts at bases, etc? contractors. Look at all the IT jobs--all contracts. I'm talking specifically about DoD contractors. I know that contractors for other agencies like USAA, etc are probably closing them down. If you have a security clearance, you're also set for life.

BenH said:   fermatallegro said:   Something to consider. Twenty five years ago I chose benefits over $100 in weekly wages. About a year later I had an accident in the course of my work and received a permanent partial injury which resulted in a lifetime of weekly worker compensation payments. The payments are one half of my average weekly salary at the time of the accident. Those benefits ended up costing me $50 a week for the rest of my life in addition to a decrease in the amount in my social security payments. If it had been a total disability it would have cost me $100 a week for life.

I'm confused?! On the one hand you are saying that you get weekly payouts because you were protected by your benefits - that's good right? So why are you then stating the benefits "cost" you $50 a week?
Either you are getting payouts (e.g you make money) or you are paying out (e.g. it costs you).
Which one?



Whether or not the companies benefits covered the injury that's not the point. People can buy their own benefits, so that must be assumed for an apples to apples comparison. The point of his post is he would have got a higher monthly check had received higher pay rather than benefits (Even if the payment he is receiving would have required him to have insurance)
i.e.

Person 1 makes $40k per year and gets $10k worth of benefits. He becomes partially disabled and gets $20k per year for the rest of his life.

Person 2 (The identical twin of person 1. They did everything together until they disagreed on whether wages or benefits is more important) gets an identical job except he makes $50k per year with no benefits. He still wants benefits, but he wants a higher pay to disclose when looking for his next job. He spends ~$10k per year on his benefits (Although his company doesn't pay for his insurance, he still gets group rates because his company offers to let employees pay for it). He gets partially disabled and gets $25k for the rest of his life.

Of course Person 2 may not spend his money on the benefits. (And whether these benefits are required for certain situations anyways. - If the injury is work related, or caused by an accident caused by someone filthy rich.) Regardless, this is an interesting point. You choose the job with benefits in case something happens. When something does happen you find you would have been better off with the higher pay all along!

skunker said:   Look at all the IT jobs--all contracts.

Who told you this fairy tale? I work for the DOD, in I.T. Probably about 30% or so are contractors, and I work with people around the globe.
Don't you remember the massive "flip" we had a few years back?

StartByServingOthers said:   Whether or not the companies benefits covered the injury that's not the point. People can buy their own benefits, so that must be assumed for an apples to apples comparison. The point of his post is he would have got a higher monthly check had received higher pay rather than benefits (Even if the payment he is receiving would have required him to have insurance)
i.e.

Person 1 makes $40k per year and gets $10k worth of benefits. He becomes partially disabled and gets $20k per year for the rest of his life.

Person 2 (The identical twin of person 1. They did everything together until they disagreed on whether wages or benefits is more important) gets an identical job except he makes $50k per year with no benefits. He still wants benefits, but he wants a higher pay to disclose when looking for his next job. He spends ~$10k per year on his benefits (Although his company doesn't pay for his insurance, he still gets group rates because his company offers to let employees pay for it). He gets partially disabled and gets $25k for the rest of his life.
True, but if Person 2 was paying his own disability insurance premiums, his premiums were also higher because he was paying for higher benefits, so it's not a free lunch.

Most importantly, before the disability Person 2 was netting out less than Person 1. That's because Person 2 was paying taxes on that entire amount and was then paying for his own benefits with post-tax dollars. Even if he is able to get a tax deduction for it, on an after-tax basis it is still substantially worse than the alternative. The higher your tax bracket, the more pronounced this difference is. This is the reason that high income earner compensation is typically structured to avoid the situation of Person 2.

skunker said:   

I disagree. About the only segment of the DoD that is not being cut are contractors. Put another way...when the military draws down out of Afghanistan, who is going to replace them? Contractors. Who is flying the UAVs? Contractors. Who mans the guard posts at bases, etc? contractors. Look at all the IT jobs--all contracts. I'm talking specifically about DoD contractors. I know that contractors for other agencies like USAA, etc are probably closing them down. If you have a security clearance, you're also set for life.


I am pretty sure USAA is an insurance company that caters to the military and not part of the government. As for contracting being guaranteed I think you are really over stating the issue. I have lots of friends and a spouse in government contracting including DoD and I'd say the bulk of them are worried about the future. At my wife's company, a major DoD and civilian contractor they have been cutting back on hiring and had some layoffs over the last couple of years. They have also started cutting benefits in the last couple of years and been far less charitable to folks "on the beach". As for a clearance I would agree if you have a high-level clearance you probably good for the foreseeable future. If you have just a secret level, not so much. Now we haven't see mass layoff yet and we might never see them but I would say you cannot extrapolate the last decade or so going forward.

I think people overstate the worrying. I can tell you how things will be for the next 30 years. They will be just like they have been for the last 30.



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