Politics and Locality Pay

By on October 20, 2014 in Current Events, Pay & Benefits with 12 Comments

No public action has been taken by the President’s Pay Agent regarding expanding locality pay areas in 2015. New areas were recommended by the Federal Salary Council for inclusion in 2014 but no action was taken by the Pay Agent. It is no surprise the lack of action has not been satisfactory to the unions comprising the majority of members on the Federal Salary Council.

In a press release, the American Federation of Government Employees attacked the administration for lack of action with regard to locality pay for 2015 with the following statement:

“It cannot move forward just yet,” AFGE National President J. David Cox Sr. said. “The excuses keep piling up. They are scared of the reaction of House Republicans. They are scared that the public won’t understand what they’re doing. They are scared to find out what might happen if they actually do something positive for federal employees…”

A working group for the Salary Council made recommendations in September regarding locality pay including these items:

  • Asking the Pay Agent to quickly publish regulations needed to propose the 12 recommended locality pay areas
  • Recommending establishing Kansas City as an additional locality pay area

(See Locality Pay and the Federal Pay Schedule for a listing of the recommended locality pay areas.)

In an article published in July, FedSmith noted these comments by the President’s Pay Agent from its July 2014 report on locality pay for 2015:

We remain in agreement with the (Federal Salary) Council that we should establish 12 new locality pay areas, which the Pay Agent tentatively approved in its May 2013 report. However, we have not yet made a final decision on what the timing should be for this significant change. We also agree with the Council that it may be appropriate, after appropriate rule-making, to use the Office of Management and Budget’s February 2013 metropolitan area definitions as the basis for locality pay areas….“Although we agree with the Council that we should issue regulations proposing establishment of the 12 new locality pay areas the Pay Agent tentatively approved in its May 2013 report, we have not yet made a final decision on what the timing should be for this significant change.

In effect, the President’s Pay Agent has to act on the recommendations of the Federal Salary Council in order for the new locality pay areas to become effective.

It’s About the Politics

While AFGE and other unions are unhappy with the lack of action by the President’s Pay Agent, the union’s press release, which includes the rhetorical flourish reflecting the union’s own agenda, is probably fairly accurate in describing the reason for the most recent delay on locality pay.

Another national election is coming up in November and there is a strong possibility that both the Senate and the House will be under Republican control. President Obama has already made clear that several significant actions he intends to take will be delayed until after the election. Presumably the reason for the delay is that taking controversial actions shortly before an election will influence voters who will not like the actions likely to be implemented later. In effect, waiting until after the election will increase the Democrats’ chance of retaining control of the Senate.

While some would see these as a cynical political ploy, and that may be exactly what is happening as many voters do not pay close attention to political issues until just before an election (if they pay attention at all), retaining and expanding political power is always uppermost in the minds of our national political leaders in both parties.

The cost of expanding the locality pay areas is not obvious from the documents available. No doubt, the cost of expanding federal pay for a number of employees over a multi-year period will be significant and the cost would not look good in a political ad casting aspersions on the administration shortly before voters cast their ballots and the outcome has been ascertained.

Median household incomes in the U.S. are now at $51,939—about 8% below their level of 2007. Since the recession ended in 2009, median household incomes are down 4%—down to levels last seen in 1996. With this economic background, a political ad noting that the median federal employee’s salary in 2013 was $73,736 and that the administration was taking action to further increase federal employee salaries in an additional 12 locality pay areas could be used to the detriment of the administration and Democrats running for office.

There are numerous arguments that can be made for increasing federal pay. No doubt, there are many in Congress and the administration that support these arguments. Those arguments are secondary in the political process. Willingly or not, federal employees are part of the political theater that occurs during any national election.

The Federal Salary Council and the unions on the council are politically astute and well aware of the political pressures. The publicity they have garnered with the report from the working committee and press releases highlighting the 12 (now possibly 13) locality pay areas may result in these pay areas being approved before January 2015. If that occurs, the regulations will most likely be released after the November elections and the timetable for implementation will presumably accompany the new regulations.

Readers are free to vent their frustrations or just express opinions in the comments section. While there are times that being in the eye of politicians can work to the advantage of the federal workforce, the current political and economic climate have not combined to create one of those favorable times. More locality pay areas are likely to be created; we do not know when action will be taken.

Salary Council Working Group Report

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

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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 on federal human resources.

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