1.6% Pay Raise for 2012?

Despite the election year rhetoric, it is still possible to come up with an estimate of your future pay increase based on past actions by Congress and the President.

The most intriguing questions among readers of our site often concern pay and benefits. Specifically, many people want to know: “How much will I make next year?”

Leaving aside the issue of whether federal employees are over or underpaid on average, it is possible to make a reasonable guess about your future income based on past actions by the President and Congress. Obviously, in an election year, anything can happen but, when the rhetoric subsides, federal employees have come out reasonably well on pay and benefits issues that have come up regardless of which party is in power in the White House and Congress.

We still don’t know the final pay figures for 2011 but a reasonable guess is an average of 1.4% in January. Presumably, the final figures will be available sometime before January 1, 2012.

But, looking ever further ahead, how much will your salary go up in 2012? 

According to the Bureau of Labor Statistics, an organization which is part of the Department of Labor, wages in the private sector are 1.6% higher from September 2009 – September 2010. Here is an example of why this figure is important for your future salary.

The projected average salary increase for federal employees in 2010 is projected to be 1.4%. Wages in the private sector went up 1.4% from September 2008 – September 2009.

There is a good chance that President Obama will propose a 1.6% increase for federal employees in 2011. As a matter of law, military salaries are to go up each year per a rate equal to the change in the employment cost index for salaries in the private sector.  Federal employee unions always argue vigorously for “pay parity” with the military. 

That does not always happen and, for 2010, the President proposed a higher raise for military personnel than for civilians. And, as federal retirees are well aware, this figure does not directly impact your future annuity payment as, for two years running, there has not been an increase in your annuity payment due to low inflation. (See What About Your 2011 COLA? Forget About It!)

But 2011 is not an election year. Chances are there will be a big budget battle in Congress if, as expected, Republicans take over control of the House. Even with Democrats controlling both Houses of Congress and the White House passing a budget has been a major struggle (the fiscal year 2011 budget has not been passed) so the political wrangling next year should be interesting.

But, based on how federal employees have fared under both parties, a 1.6% average increase for 2012 is a reasonable estimate. We will, of course, let our readers know as events that impact your future salary unfold.

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