White House proposes pay increase for federal workers

posted at 1:50 pm on January 6, 2012 by Tina Korbe

The “pay freeze” on federal workers has always been a bit of a misnomer; throughout the freeze, workers have still been eligible for step increases and (rightly) increased pay for promotions. But, today, the White House officially ended the freeze with the announcement of a slight pay increased for federal government employees. Ed O’Keefe reports:

The White House will propose a 0.5 percent pay increase for civilian federal employees as part of its 2013 budget proposal, according to two senior administration officials familiar with the plans.

The modest cost of living increase in federal compensation would be the first pay jump for federal workers since before President Obama ordered a two-year freeze in late 2010.

The proposal, which requires congressional approval, differs from Republican plans supported by lawmakers and presidential candidates that would freeze federal compensation for at least one more year. In recent weeks, GOP lawmakers have called for extending the pay freeze as a way to pay for a payroll tax extension.

The increase is somewhat of a compromise position — less than the 3.6 percent cost of living adjustment that went into effect for Social Security and other benefits to keep pace with inflation and less than the 2.1 percent average increase in private-sector earnings in 2011. Still, the decision to bump federal pay is yet another move to pander to potential voters (that would be those federal workers!). Any increase is more than we can afford for two reasons. In the first place, Congress continues to debate the payroll tax cut extension (still a bad policy) — and paying for that cut with tax hikes elsewhere is counterproductive, so Republicans have suggested paying for it by continuing the federal pay freeze. Obviously, this increase alters that possibility. In the second place, federal workers are already highly overpaid. The Heritage Foundation’s James Sherk offers a helpful list of facts to anchor this debate:

  • The average federal employee earns 57 percent greater cash pay and 85 percent greater total compensation (which includes benefits) than the average private-sector worker.
  • This is an apples-to-oranges comparison because federal employees have more education and experience than private-sector workers.
  • Controlling for observable skills and characteristics allows economists to make an apples-to-apples comparison between private-sector and federal employees.
  • Doing so shows that the federal pay system gives the average federal employee hourly cash earnings 22 percent above the average private worker’s.
  • Including benefits raises the average compensation disparity to between 30 and 40 percent.
  • Federal workers receive automatic seniority-based raises irrespective of performance. President Obama’s suspension of the annual cost-of-living adjustment does not affect these raises.
  • Despite these average pay differences, many federal employees are not overpaid. The General Schedule does not connect pay with performance. Many of the hardest-working and most highly skilled federal employees receive at or below market compensation.
In light of those stats, it’s easy to see that if the White House or Congress want to tinker with federal pay, they ought to do it in a more comprehensive fashion that brings pay in line with performance — and renders the entire system more affordable for taxpayers.

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Comment pages: 1 2

JohnGalt23 on January 6, 2012 at 2:44 PM

While I believe that is worthy goal which Party is going to bite the bullet and make the changes to Civil Service laws to make it possible. At this point you could tinker around the edges with hiring freezes and leaving open jobs open. However, until unionization and laws are substantially changed the above will not happen. It will take the last creditor saying no to Uncle Sam to actually force that to happen.

chemman on January 6, 2012 at 5:24 PM

Meanwhile, back at the coal mines….
Lily on January 6, 2012 at 1:54 PM

Oh they’re to be shut down. Haven’t you heard?

Akzed on January 6, 2012 at 1:57 PM

Whistle (past graveyard) while you work
Whistle (past graveyard) while you work

OTTO on January 6, 2012 at 5:24 PM

That is why our kids go to school stupid and come out the same way.

Wade on January 6, 2012 at 5:13 PM

If your kids went to school stupid and came out stupid then you need to do the world a favor and eliminate your genes from the gene pool. If you want to reword that to ignorant instead of stupid then you have a minor point to make but why did you allow such to happen? When my spouse and I realized that the schools ware just passing our children because they were well behaved we took them out and home schooled them. My son is the senior programmer for his firm and my daughter is up for promotion to a supervisory position in the IT field. They are dedicated life long learners instead of victims of the education game.

chemman on January 6, 2012 at 5:50 PM

NOTHING this regime has done is good for America.

Absolutely nothing. It really is quite remarkable.

Vacations? Obama’s are too short rather than too long.
Stay outta the WH, I say.

Our “lazy” drug experimenter blank educational records president.

What a fubar debacle!

Sherman1864 on January 6, 2012 at 6:35 PM

Not according to a lot of posters here. Every single government employee is a leech on the taxpayers (nevermind that those exact same leeches are themselves paying taxes) and contribute nothing to the nation.

Washington Nearsider on January 6, 2012 at 5:12 PM

Well, I can see you do produce straw men better than the private sector does. Maybe that’s productivity worth a pay increase?

fitzfong on January 6, 2012 at 6:44 PM

Tina,

You can’t go wrong with an office shot from “The Trial” to introduce a topic :-)

MJBrutus on January 6, 2012 at 6:47 PM

Despite the fact that I haven’t had a raise or a bonus in more than 2 years, I consider myself fortunate to still have a good-paying job in this economy at a company that’s just barely profitable in an industry that’s going obsolete. Of course, the real value of my money has gone down, but at least it’s still coming in. We’re also fortunate that my husband works for a fairly recession-proof company that give regular raises, even though he makes half of what I do.

My eldest son just lost his job because their plant closed. My daughter has been struggling to find anything but just got a job at Starbucks and is thrilled with that. My youngest son was fortunate to get a job at my husband’s company and will soon be heading into the Air National Guard.

Of course we’re also in the process of losing all of our deductables as our kids leave the house so it’s nice to know that the additional tax money we’ll be paying is going to raises for federal workers /sarc.

Common Sense on January 6, 2012 at 7:21 PM

Tina is correct in that this is a direct pander to federal workers. At least at the locations I know of with federal workers, they were incensed with Obama when he froze their COLA.

I think Tina also does a good job with showing all sides of this. The issue isn’t, exactly, overpaid federal workers. The issue is that there is little to no positive correlation between performance and pay in the federal government.

Scott H on January 6, 2012 at 8:16 PM

Wait…. so most of us Americans have gone a few years now with no kind of pay increases… heck, in many cases, a pay CUT… are supposed to be happy about this?

Yeah must be nice.

Honestly people, there are days I am mad at myself for not getting a nice public job when I was out of HS… I be set now looking at how I live now ( not that I am bad off dont get me wrong…. but come on… who does not want to go further ).

watertown on January 6, 2012 at 10:09 PM

Reduce the federal workforce by 5 percent per year for 10 years; Would reduce the number of federal employees by 40 percent.

Dasher on January 7, 2012 at 12:55 AM

I don’t know about the coal mines but at the Eastlake Ohio power plant, which we were told it was only using a quarter of capacity. Wrong, I talked to someone who was there for almost 30yrs, he said they are running at about 80%. So much for “the coal wars” in Ohio.

angrymike on January 7, 2012 at 1:35 AM

This is a slap in the face to people like my husband and myself who are both unemployed. We are barely surviving on his military retirement and because it doesn’t cover all the bills we are having to make regular withdrawals from our savings. Neither of us had ever been unemployed in our 24 years of marriage until Obummer destroyed the economy. We would be in real trouble now if we didn’t have any savings.

sherrimae on January 7, 2012 at 2:09 AM

In the second place, federal workers are already highly overpaid.

Actually, let’s start there.
I propose not only a hiring freeze, but 10% salary reduction for all of OUR employees.
It’s time to put an end to all life-long, get-over, bureaucratic “jobs”.
Just a Modest Proposal
(for starters)

~(Ä)~

Karl Magnus on January 7, 2012 at 10:12 AM

Comment pages: 1 2