Average Federal Employee Pay and the Shutdown

PayPal is offering an interest-free cash advance to federal employees of $500. The announcement is based on a false assumption about federal pay.

Hot-button political issues lead to strange news stories or “facts” that are quickly accepted and distributed in the national media.

Here is some good news mixed with “facts” that will be news to most of the federal workforce.

Interest-Free Cash Advance

PayPal has just announced it is providing an interest-free cash advance to federal employees:

With the average government employee taking home roughly $500 a week, many people were already struggling before the shutdown. There are bills to be paid, groceries and gas to be bought, families to support. These needs grow more urgent with each passing day.

Starting immediately, PayPal is offering an interest-free cash advance up to $500, the equivalent of one week’s take home pay, for any existing or new PayPal Credit customers who are federal employees, and are struggling to make ends meet. We have committed to fund up to $25 million of interest-free cash advances to help federal government employees pay for food, gas, and other everyday necessities.

This PayPal announcement is a welcome initiative that will be appreciated by many federal employees.

$500 Per Week for Average Federal Employee?

I was struck by the note in the announcement that the average federal employee makes $500 a week. That would be the equivalent of about $26,000 per year.

While the Federal Salary Council routinely announces the federal workforce is seriously underpaid (about 35% less than the private sector according to their mystical calculations), an average federal salary of $26,000 a year seems very unlikely.

And, in fact, it is a factual fantasy.

Where did Paypal come up with the idea that the $500 a week is “the equivalent of one week’s take home pay” for federal employees?

Here is the answer: From a press release from the largest federal employee union, the American Federation of Government Employees (AFGE). That is the source cited by Paypal for offering an interest-free loan of up to $500.

According to AFGE, “Our members take home an average of around $500 each week. Any interruption in their pay will have a devastating impact on them, their families, and their communities.”

It may be true that the average AFGE member makes $500 a week. PayPal took that at face value and extrapolated that the average federal employee makes that amount.

Perhaps AFGE sees this as advantageous in their campaign to get the federal government open again. That is a worthy goal. The factual inaccuracy and the misleading statistic is not worthy of an organization working toward a goal with which most Americans agree.

Average Federal Employee Salary by State

Wyoming has the lowest average federal employee salary among the states. The average salary in Wyoming was about $63,150 in fiscal year 2017. The highest average salary is in Washington, DC. In fiscal year 2017, the average federal employee salary in the District was $115,594. These salary figures are for those on the federal government’s General Schedule of pay.

That means the average federal salary in Wyoming was about $1,214 per week in FY 2017. In Washington, it was about $2,330 per week.

The AFGE press release cites the $500 figure as the average take-home pay for their members. Perhaps that is true. It clearly is not the average take-home pay for most federal employees.

Would PayPal Have Given Bigger Credit Advances?

If AFGE’s goal was to generate sympathy for its members, it was probably a success. Most Americans will feel a pang of sympathy for federal employees who are making $500 a week in take-home pay. Many Americans will probably assume, as PayPal did, that the average federal employee has a take-home pay of $500.

PayPal apparently took the union at their word and ponied up an offer of cash advances of $500 per week based on the AFGE figures. Had they known the average federal employee makes considerably more than $500 per week, perhaps their largesse would have been more.

There is little doubt the vast majority of readers are anxious for the partial government shutdown to be over soon and a resumption of normality—along with a regular paycheck.

Federal employees are like most Americans. They often spend what they earn and sometimes spend a little more than they earn. Many have an emergency fund built up that will help them through the shutdown. Many others do not have an emergency fund and are undoubtedly feeling a tough financial stretch.

For many, $500 will be of some help. For others, it won’t make much difference in meeting expenses.

While the AFGE salary figures may be accurate, with the casual stipulations thrown in, many outside of government, including PayPal, will be misled by the salary data.

There is certainly enough subterfuge used by politicians and others in the ongoing political debate. It would be a good idea and more helpful to the federal workforce to avoid purposely misleading the public.

In the meantime, we wish all readers the best of luck in getting through the current uncertainty, confusion and financial concerns.

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