Average Federal Salary Goes Up Despite Pay Freeze
by Ralph Smith |
The FedSmith site has been inundated with comments about federal pay in the past several weeks, largely in response to a series of news items about a pay raise for federal employees, legislation designed to quash the pay raise, and an article about taxes in France and a French film star leaving the country as a result of the socialist government there attempting to take a very large bite out of his income in taxes if he remains in his native country. (He has since accepted a Russian passport but, apparently, is still living in Belgium.)
The Pay Freeze
A number of the comments were along the lines of “The average federal worker only makes about $40,000 (substitute your own number here) a year” and numerous comments on the theme that federal workers make less than they would if they were to take a job in the private sector. Numerous readers also referenced the federal pay freeze that has been in effect since 2011. As most readers know, the pay freeze did not impact within-grade increases, promotions, or bonus payments but there has not been an overall salary increase for the federal workforce during the freeze.
Based on anecdotal evidence, many who think the average pay for federal employees is much lower than the actual figures indicate are using their own salary as a guide. (Typical comments are along this line: “I don’t know any federal employee who makes as much as the so-called ‘average’ federal employee.”) So, while the supposition of the overall average pay may be spot on for their organization, the overall average for the federal workforce may be higher than some readers would anticipate based on their personal experience.
What has been the impact of the pay freeze on federal employee salaries?
There is a variation among the federal agencies reporting on average federal salary figures. For this article, we used the latest figures available from the Office of Personnel Management. The figures are for the period ending in September 2012. The averages are for federal employees working under a general schedule pay system (there are variations among some agencies so the amounts for the same grade or position may vary between agencies. See, for example, Highly Paid Federal Administrative Positions: Where Are They and How Much Do They Make?). The OPM figures for the average salary are generally less than those reported by the Bureau of Labor Statistics. (See Average Federal Salary: $83,679 and Lowest Average Pay Increase in 10 Years) In order to consider the impact of the federal pay freeze, we have used the OPM data to compare the average federal salary before and since the pay freeze has been in effect.
The Six-Figure Club: Average Federal Employee Salary in the District of Columbia Still Over $100,000
The average federal employee in Washington, DC now makes $101,263. But, while the average federal employee salary for those working in Washington, DC is still in the six-figure pay club, this figure has gone down. In September 2010, the average salary for this group of federal workers was $101,757 so the average has dropped about $500 from September 2010 – September 2012. The average figure is for salary alone and does not include the cost of the federal benefits package.
Average Federal Salary Goes Up During Pay Freeze
The average federal salary for all federal employees under the general schedule or related pay systems is now $74,558. For those employees working in the United States, the average salary is now $74,804. The chart below outlines the breakout among different agency categories and their average salaries.
Despite the pay freeze, the average federal employee salary is still going up. Back in September 2009, the average federal salary was $72,249 and in September 2010 it was $74,302. By September 2012, the average GS federal salary was up to $74,804—an increase of about $500 despite the limited pay freeze.
Presumably, this increase is because agencies are promoting people into higher graded positions for performing the same or similar duties, employees are receiving within-grade increases, and new positions are being created in agencies and these positions may be paying a higher salary. This table displays the average salary figures for employees under the General Schedule only.
|Locality/Agency Type||Average Salary|
|Cabinet Level Agencies||$100,894|
|Large Independent Agencies (1000 or more employees)||$103,004|
|Medium Independent Agencies (100-999 employees)||$100,774|
|Small Independent Agencies (less than 100 employees)||$100,372|
|Cabinet Level Agencies||$73,075|
|Large Independent Agencies (1000 or more employees)||$86,937|
|Medium Independent Agencies (100-999 employees)||$97,385|
|Small Independent Agencies (less than 100 employees)||$94,550|
More Young Employees in Agencies
Since September 2010, the number of young employees in agencies has increased which would tend to drive down the average salary as younger employees are usually hired as a lower pay grade. The Office of Personnel Management is struggling to keep up with retirement applications as the baby boomers are retiring in larger numbers which would also lead to a lower average salary. (See, for example, OPM Retirement Applications Backlog Now Below 30k and OPM Planning to Segregate ‘Healthy’ Retirement Packages to Address Backlog)
Overall, the number of employees in the federal GS pay systems increased by more than 35,000 between September 2010 and September 2012.
For example, in September 2010, the number of federal employees between 30 – 34 increased about 13%. The number of employees from 35 – 39 increased about 4%. The number in the age range of 40 – 44 increased about 2%. There was a decrease in the number of federal employees between 45 – 49.
The number of older federal employees also went up though, including those who are 65 and older (an increase of about 39% in this age group) and have elected not to retire. No doubt, the recession that has been with us during this time period had an impact on retirement decisions as employees who are eligible to retire have continued to work and we have seen data indicating the number of federal employees retiring is now increasing which will have an impact on the overall average federal salary in the future.
So, despite the pay freeze and its negative impact on federal employee dissatisfaction with their pay in recent surveys, the overall pay freeze has slowed the increase in federal salaries but has not eliminated it. (See the chart in Will Federal Employees Get a Pay Raise in 2013? for a brief history of federal employee salaries.) We will update the data when it becomes available from OPM which includes the pay rate information for all of calendar year 2012 and early 2013.
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by Ralph Smith |