Do You Still Want Pay Parity?

By on October 19, 2006 in Current Events with 0 Comments

Last year, many federal retirees received a 4.1% cost of living increase. It was the largest increase in more than a decade for the federal employees who may have moved to Florida, Arizona or some other area with relatively high costs and warm weather.

The news for 2007 is still positive as the COLA for next year for millions of retired and disabled Americans will be 3.3 percent.

Social security beneficiaries, as well as most civil service annuitants, foreign service and military retirees will start seeing the raise in their January 2007 checks. Federal Employees Retirement System (FERS) annuitants age 62 and over, as well as FERS survivors and disability retirees, will receive a full Social Security COLA, but the adjustment in their FERS annuity will be 2.3 percent. This is because the FERS COLA formula is different than the one used for CSRS retirees whose federal service did not earn Social Security coverage.

But, while many retired feds got the 4.1% increase, the federal employees still working away and commuting through the heavy traffic did not fare as well. Federal employees get a raise–not a cost of living increase–and that raise is determined by Congress and the President each year. Your next raise is not determined by a cost of living index as it is for retirees.

Last year, the average federal employee raise was 3.1% (yes, some got more and some less because of locality pay differences). The same anomaly is apparently going to occur again this year.

It is possible that federal employees will get an average of 2.7% for 2007. It is also possible that the raise will be 2.2% instead of 2.7%.

With the passage of the Defense money bill for next year containing a 2.2% raise for military personnel, there is the strong possibility that Congress will again adopt the long-standing argument used to raise federal pay that there should again be parity between the raise given to military personnel and to federal employees.

In recent years, the pay parity argument has been a good one for getting more money for federal employees. (See “Patriotism, Pay and Parity“) That is because higher pay for our troops fighting overseas was relatively easy to get through Congress. The civilian federal workforce grabbed the coat tails of the military and got the higher raise as well.

This year, while it appeared earlier that the 2.7% figure would be the one that got through Congress, the decision to make the military raise 2.2% will make it easier for Congressional representatives to do the same for the federal workforce. Moreover, while many readers become apoplectic when the average federal salary for civilians is over $63,000 (not including benefits), this average figure makes it a little easier for Congress to go along with a 2.2% raise for next year. And, to add insult to injury, the Cato Institute had the audacity earlier this year to release figures compiled by the government that shows the average federal employee makes twice as much as the average private sector worker. (See “More Info on the Elite Island of Secure and High Paid Federal Workers“)

Readers can (and do) argue vehemently about why the pay and benefits statistics are misleading. The political reality is that there may be good reasons for the differential between the average pay and benefits of federal and private sector workers but when it comes to deciding that extra 1/2 percent of pay for next year, that may not make that much difference to the average taxpayer who will not listen to or be persuaded by any arguments justifying why the average fed makes a lot more than he is making.

Congress will decide on your next pay raise when it goes back into session after the November elections. Will they be feeling generous toward federal employees when it comes to voting on the 2007 pay raise? That will determine whether the average for next year is 2.2 or 2.7%.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.