Interesting perspective. One of the biggest factors in the "increasing wages" of government workers isn't that any given government job has increased significantly above the rate of inflation, it's the combination of massively increasing health care costs, which don't hit most government jobs' "wage" directly, but DO increase the employer-side cost; along with the fact that lots of the lower-wage government jobs were contracted out in prior years (under both party's administrations.) I doubt there are any plain old fashioned "janitors" working in the capitol building any more that are actual government employees.
What I'd like to see is a comparison of the lower-wage government jobs that were outsourced, compared to the contract price of the new contracting agency, compared to the actual wages of the newly-contracted-out workers.
I'd bet the government is, at best break-even, while the individual workers are significantly worse off. And, as Blackwater contracting shows, contracting can be expensive, I think it's more likely that the government is paying more for the same work contracted-out, with the actual workers making way less.
Remember, government employees are not the problem, it's the way the government is run that is. (I've had my fair share of IRS problems, about half the IRS's fault; but I've never taken it out on the individual IRS employees - it's not their fault that their system is broken.