Debating the Federal Pay Raise

The system for determining the average federal pay raise is steeped in politics. What is going on and why?

Late last week, we published an article entitled “2.7% Increase for 2007 Gets Congressional Boost.

The gist of the article was that arguments on “pay parity” have been persuasive in obtaining a pay raise for federal civilians comparable to increases given to military personnel. And, since a House committee has endorsed a pay raise of 2.7% for military personnel, that increases the likelihood that federal employees under the general schedule will get an average 2.7% increase as well.

Not surprisingly, some readers had questions or comments.

Some readers wonder why pay parity is an issue at all with comments such as “We work just as hard and our expenses are going up as much as for military personnel. Why shouldn’t federal employees get the same raise as the military?”

The reality of politics is perception. What persuades people? How will voters view this issue? Here is the reality underlying this issue.

The media is filled with images of American troops serving in the MIddle East. Military personnel are being wounded or killed. Most of us are grateful for them facing danger in combat on our behalf. A Congressman who votes against a pay raise for American troops will not be seen as being patriotic. In an election year, a Congressman running for office will not want to run with that perception attached to his name on the ballot.

There are also federal civilians in these war zones. But the majority of federal employees are in America in a wide variety of jobs. The public perception of federal employees is that of people working in an office environment (and getting good benefits and an exceptional retirement program) processing checks, claims, medical benefits, protecting the environment, etc.–not being shot at in Iraq.

In effect, higher pay raises for federal civilians in the last several years have been, at least in part, piggy backing on the public’s desire to support our troops. That is reality. Feel free to debate the fairness of the perception but it is not likely to change in the near future.

Other readers, obviously from the Department of Defense, had comments along these lines: “The administration’s new pay for performance plans pretty much eliminates any possibility of pay parity considerations between the military and civilian counterparts. The psychological and informational campaign on the part of the proponents of the new systems has been that civilians are overpaid and even if they were not they are unworthy of pay increases.”

Keep in mind that Congress is looking at a broader picture. While those in DoD are concerned about the new personnel system, there is only a small percentage of the American public even aware of a proposed change to the personnel system. Those that do know about it often think pay for performance is a good idea.

The pay parity argument is alive and well and has obviously been very effective. It still is.

The House has approved a pay raise of 2.7% for military personnel The Senate has not done so. It has approved a 2.2% raise. Here is a quote from a widely read column on military personnel issues: “Senators opted for the smaller increase in part to avoid having to boost federal civilian pay. It is perceived as no longer possible politically to give the military alone a bigger annual increase, said a Senate aide.”

In other words, the 2.2% pay raise may not go through for the military. If it doesn’t go through, it may be because Congress does not want to pay a few billion more to federal civlilan employees–even if they would like to do so to support our troops fighting overseas.

And here is another quote on this issue. This came from the White House after the House approved the 2.7% raise: “The Administration regrets that the Committee rejected the proposal to target pay increases for those serving over thirty years, and elected instead to apply funds towards a higher (2.7 percent) across-the-board hike. The 2.2 percent across-the-board increase proposed in the President’s Budget, when combined with the overall military benefit package, provides a significant increase for Service members and their families. The Administration proposed the 2.2 percent increase because that is what is necessary to recruit high-quality people to the Armed Forces. The Administration strongly opposes the additional and unnecessary increase in across-the-board pay.”

And here is a quick summary. Several readers were obviously wondering: “Will we get an average 2.7% increase next year or not?”

The answer is that no one really knows. My best guess based on a cynical view of politics: The 2.7% average pay raise will end up passing.

It is an election year. Congress has not been hesitant to spend billions of dollars on pet projects (“pork” if you prefer that term). It isn’t their personal money. Getting elected is the primary objective. Voting for a higher pay raise may mean more votes for those running for office. Federal employees have several advocates including Congressman with large numbers of federal employees who vote in their district to unions representing the interests of federal employees. Taken together, the odds favor the 2.7% average pay raise.

One other caveat: the federal government is changing. Next year’s pay raise will be different than in years past. Pay-for-performance will be a bigger factor than in past years in awarding new raises. Moreover, some DoD employees will be under a different pay system. In other words, regardless of what is eventually enacted, you may see considerably more or less than 2.7%.

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. Follow Ralph on Twitter: @RalphSmith47