The fact that government jobs are more immune to recession is almost certainly true; and more immune to shocks is a good thing, not bad.
As far as pay competitiveness, that article doesn't show anything but average salaries. It doesn't control for the types of jobs. The quote in the article says it:
"Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years."
" 'The data are not useful for a direct public-private pay comparison,' says Colleen Kelley, president of the National Treasury Employees Union."
Average salary for Google employees is probably a lot higher than average salary for Wal-mart. It doesn't mean that google pays more than the market rate. They hire for different positions.
If new hires are promised ANY additional benefit, that will affect their decision to take the job on the margin, relative to other jobs. The employer offering the benefit will, all else equal, be able to hire the same employees for a lower salary. Unless there is some other factor at work here distorting market forces.
Very few government employees can vote themselves raises. Like, 535. The rest are hired by a manager, who was hired by a manager, who, eventually, was appointed by the president or congress.
If the government is really paying greater than market rates and not getting above average employees for those positions, then government agencies need to look at their hiring practices; but let's not get carried away.
It amazes me how many people on /. think it's cool to just drop pensions which employees have been paying into, and promised return on, for a long time. This is a commitment made by the employer, the same as any corporate pension program, and it should be paid at least until the state of Illinois declares bankruptcy.