Back in August, President Obama recommended a 1% pay raise for federal employees noting that, “Civilian Federal employees have already made significant sacrifices as a result of a three-year pay freeze that ended in January 2014 with the implementation of a 1.0 percent pay increase…” But he also noted that, “as the country’s economic recovery continues, we must maintain efforts to keep our Nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share.” The full text of this letter is at the end of this article.
With the passage of the Omnibus spending bill by Congress now in place, the 1% pay raise that the president recommended will become a reality. The 1% pay raise will also apply to military personnel. Congress made the decision to support the 1 percent pay raise recommended for federal workers and military personnel instead of including a specific provision to block the 1% raise or to provide a different amount.
The president’s letter of last August also stated that “across-the-board pay increases will be 1.0 percent, and the current locality pay percentages shown in Schedule 9 of Executive Order 13655 of December 23, 2013, will remain at their 2014 levels.”
The 1% pay raise was not popular with federal employee unions. The American Federation of Government Employees wrote: “[O]ne percent is not nearly enough to make up for the financial hardship wrought by years of frozen pay and substandard increases. Including the FY15 increase, employees have seen a paltry two-percent total increase in their paychecks over last five years. When accounting for inflation, most federal workers have actually taken a substantial pay cut. ”
Federal employees were often incensed at federal pay raises under President Bush (See Federal Pay Raise Issues May Be Political, But They Are Not Partisan). Some of the vitriol that existed at that time has not generally been present in recent years. There is little doubt that federal employees strongly believe they have already done their “fair share” having had a general pay freeze that lasted for three years (2011 – 2013) and an across-the-board pay raise of 1% in 2014. The pay increase in 2010 was 2%.
Despite the support of federal employee unions on behalf of federal employees, President Obama has not been inclined to push for higher federal pay raises. In 2010, the pay raise was 2% due to a national emergency. In 2010, President Obama proposed a pay freeze to last for two years (it was later extended) “because of the massive deficits we inherited and the unsustainable fiscal course that we are on.” In 2014, the president proposed a pay raise of 1% that was implemented last January.
Federal employees may be longing for the “good old days” of higher inflation but also higher raises in the earlier part of the decade. Here is how raises looked in earlier years (also see Federal Pay Raises Through the Years):
The official rate of inflation has been low in recent years which has certainly been a factor in lower pay raises for the federal workforce and the federal deficit which was cited as being “massive” under the Bush administration has gone up more than any time in our history and now stands at over $18 trillion and growing each day—despite record tax revenue being received by the federal government.
Predicting future pay raises is not realistic as too many events impact the decision. But, with the deficits continuing to go higher, and inflation continuing to be at a low annual rate, there would appear to be a significant likelihood of substantial pay raises for some time.
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release August 29, 2014
TEXT OF A LETTER FROM THE PRESIDENT
TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES
AND THE PRESIDENT OF THE SENATE
August 29, 2014
Dear Mr. Speaker: (Dear Mr. President:)
I am transmitting an alternative plan for pay increases for civilian Federal employees covered by the General Schedule (GS) and certain other pay systems in January 2015.
Title 5, United States Code, authorizes me to implement alternative pay plans for pay increases for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the adjustments that would otherwise take effect as inappropriate.
Civilian Federal employees have already made significant sacrifices as a result of a three-year pay freeze that ended in January 2014 with the implementation of a 1.0 percent pay increase — an amount lower than the private sector pay increases and statutory formula for adjustments to the base General Schedule. However, as the country’s economic recovery continues, we must maintain efforts to keep our Nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share.
Accordingly, I have determined that it is appropriate to exercise my statutory alternative plan authority under 5 U.S.C. 5303(b) and 5304a to set alternative January 2015 across-the-board and locality pay adjustments. Specifically, I have determined that for 2015, across-the-board pay increases will be 1.0 percent, and the current locality pay percentages shown in Schedule 9 of Executive Order 13655 of December 23, 2013, will remain at their 2014 levels. This decision will not materially affect our ability to attract and retain a well-qualified Federal workforce.
The adjustments described above shall take effect on the first applicable pay period beginning on or after January 1, 2015.