Federal Employees Underpaid by 34.07%

By on October 31, 2016 in Pay & Benefits with 0 Comments

Image of a businessman pulling out his pants pocket liners to show he has no money

According to the Federal Salary Council in reporting on locality pay for 2018, federal salaries are 34.07 percent, on average, less than private-sector employees are paid for doing comparable work.

The Salary Council is consistent with its salary conclusions. Similar conclusions were previously reached in previous annual reports.  The Salary Council consists of three experts in labor relations and pay policy and six employee unions that represent a large number of General Schedule employees.

Are Federal Employees Paid Too Much, Too Little or About Right?

Whether federal employees are generally overpaid or underpaid is a matter of contention in competing studies. The Salary Council comes down on the side of concluding federal workers are substantially underpaid. Other studies have concluded the federal workforce is substantially overpaid.

The figure was announced at a recent meeting of the Federal Salary Council. The organization provides recommendations to the President’s Pay Agent on pay under the General Schedule pay system for white-collar federal employees other than the most senior federal managers.

Locality Pay and the Federal Salary Council

The Salary Council also recommends amounts for locality pay in numerous locations throughout the United States. It also makes recommendations on locality pay locations.

In recent years, the Council has recommended adding large numbers of federal employees for locality pay raises by adding new cities and expanding the geographic areas covered by existing locality pay areas. The locality pay areas for 2017 are listed in Raising Federal Employee Pay By Expanding Locality Pay Areas.

New Locality Pay Areas and Locality Pay Changes for 2017

The Salary Council has recommended adding Burlington, Vermont and Virginia Beach, VA, as separate locality pay areas in 2017. (See New Federal Employee Locality Pay Areas for 2017?)

The President’s Pay Agent decides to accept or reject recommendations by the Salary Council. A report on locality pay for 2017 should be forthcoming from the Pay Agent in the near future.

Pay Raise and COLA Increase for 2017?

We probably will not know until December what the actual pay raise will be for current federal employees in 2017. Last year, an executive order was issued on December 16, 2015 finalizing the pay raise for the current year. (See Executive Order Finalizing 2016 Pay Rates Issued) A similar time period is likely for the 2017 pay raise.

As it now stands, it appears the average pay raise for 2017 will be 1.6%. That amount includes the amount designated for locality pay raises. (See 2017 Federal Pay Raise and COLA Update)

For federal retirees who may still be wondering if they will also receive a 1.6% increase next year, you can stop wondering. The COLA for 2017 will be 0.3% based on the inflation figures issued earlier this month. (See 0.3% COLA Increase for Federal Retirees and Social Security Recipients in 2017)

© 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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