From the comments:
"…It used to be that gov’t workers were considered to be low paid, relative to private sector workers. The idea was that working for the public involved some sacrifice, that gov’t workers were willing to make. What has happened since then is not that gov’t workers have gotten better pay and benefits, but that private sector workers have gotten worse pay and benefits. They are poorly paid. That is the problem.
"And if anything, better pay for gov’t workers serves to bolster pay for private sector workers, by giving them the alternative of working for the gov’t. Lowering gov’t workers’ pay would be more likely to lower private sector pay, instead of equalizing it…."