http://www.usatoday.com/news/nation/2010-03-04-federal-pay_N...
I think it's best summed up as: The federal workforce is disproportionately comprised of scientists and high-end professionals and these workers earn less than their counterparts in the private sector. with the not so minor caviot that rank and file workers are over paid. What's less obvious is output from federal workers; it seems like a few people get the majority of the work done, but you tend to see that in large private companies as well.
Also, within many (but not all, obviously) occupations, the government tends to hire more qualified people than average because they deal with complex work. Federal accountants aren't handling the work of some 50-person small business, they're auditing the tax returns of multi-billion dollar international corporations. Federal lawyers aren't handling some old guy's will, they're overseeing multi-billion dollar transactions.
Another thing the USA today article over looks is living expenses. Almost all professional government jobs are in big cities with high cost of living.
It is commonly known that at equal skill level you will make less pay for the government.
As much as the politicos would like to claim otherwise, I have never heard of anyone taking a govt job so they can make more money.
Want to know why the federal government hasn't made much of a dent in the recession? Visit the DC exurbs and then visit the exurbs of any other city in the US. If you never left fifty miles of DC you would be forced to assume there was an economic boom going on.