Diversity, Equity, Inclusion, and Federal Employee Pay

Equity and Starting Salary for Federal Employees

The Office of Personnel Management (OPM) is proposing to revise the criteria for making salary determinations based on salary history. The purpose of the proposed change is “to advance pay equity in the General Schedule pay system, Prevailing Rate Systems, Administrative Appeals Judge pay system, and Administrative Law Judge pay system.”

Comments on the OPM proposal are due on or before June 12, 2023.

OPM Director Kiran Ahuja said, according to an OPM press release:

These proposed regulations are a major step forward that will help make the federal government a national leader in pay equity. Relying on a candidate’s previous salary history can exacerbate preexisting inequality and disproportionally impact women and workers of color. With these proposed regulations, the Biden-Harris Administration is setting the standard and demonstrating to the nation that we mean business when it comes to equality, fairness, and attracting the best talent.

The press release highlights that the latest policy is again designed to “advance diversity, equity, inclusion, and accessibility to attract a workforce drawn from the full diversity of America, consistent with President Biden’s Executive Order on Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce.”

This new proposal will require agencies to create policies for setting pay based on a previous Federal salary for employees who have previous civilian service in the Federal Government.

Defining “Underserved Communities”

Various Executive Orders and policy pronouncements have addressed achieving equity for “underserved communities”. This latest policy pronouncement continues this focus and cites previous Executive Orders as a basis for the latest policy change.

A previous Executive Order defined these terms. A later Executive Order shows how the term “underserved communities” is significantly expanding by adding a variety of people. As the Biden administration has increasingly focused on sex, gender, and related topics, the newest definition is longer:

The term “underserved communities” refers to populations sharing a particular characteristic, as well as geographic communities, who have been systematically denied a full opportunity to participate in aspects of economic, social, and civic life. In the context of the Federal workforce, this term includes individuals who belong to communities of color, such as Black and African American, Hispanic and Latino, Native American, Alaska Native and Indigenous, Asian American, Native Hawaiian and Pacific Islander, Middle Eastern, and North African persons. It also includes individuals who belong to communities that face discrimination based on sex, sexual orientation, and gender identity (including lesbian, gay, bisexual, transgender, queer, gender non-conforming, and non-binary (LGBTQ+) persons); persons who face discrimination based on pregnancy or pregnancy-related conditions; parents; and caregivers. It also includes individuals who belong to communities that face discrimination based on their religion or disability….

Federal Register :: Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce

Notably excluded from the list of categories are white people although some would presumably be included if they fall under one of the other listed categories.

The purpose of the OPM policy change is to lower the pay gap that exists. According to OPM: “setting pay based on an individual’s salary history may maintain or exacerbate pay inequity a job candidate experienced in their current or previous employment. Nationally, women earn less than men, on average, and this pay gap varies by race and ethnicity.”

OPM Data on Average Pay by Race and Gender

A previous article on average federal employee salary was based on OPM data that highlighted differences in salary between different groups. The groups with the highest salaries were Asians and Caucasians. These differences presumably indicate a lack of “equity” in the federal government. This new proposal is another way for the administration to achieve what OPM may see as equity by bringing these average salaries closer together.

The earlier data show that the average salary for those classified as “Asian” is consistently higher. The average salary for those classified as “Caucasian” is in second place. Hispanic federal employees are generally in third place and African-Americans are generally in fourth place although these last two averages are close and the ranking varies by year.

Average Federal Salary by Race or Ethnicity

Here are the data from OPM for the average salaries at the end of each fiscal year from 2017-2021. The table below displays the average federal salary as well as the average salary for several racial groups.

The average federal salary went up by 9.18% in these five-years. For each year, the highest average salary was for those employees categorized as “Asian” in the OPM data. Over this five-year period, the overall increase for this category of employees was 10.5%. For those employees categorized as “white” or “Caucasian”, the average increase over this period was 9.5%.

For Hispanic employees, the overall increase in this time period was 9.21%. While the average salary in this time frame was lowest for African-American employees, the overall increase was 10.98%—the most significant increase for any of the categories.

Average Percentage Salary Increase by Race for Fiscal Years 2018-2022

There is also evidence, again based on OPM data, that the average salary for Black and Hispanic federal employees is going up faster than it is for other groups based on the fiscal year data from 2018-2022.

These changes imply that the process of achieving similar average federal salaries for all groups has already been occurring. Presumably, OPM is trying to achieve further “equity” faster by taking this latest action to speed up the process of bringing all racial groups closer together in their pay averages. And, having worked for several federal agencies (including OPM) in years past, it is always good from the perspective of political appointees to work hard to comply with the political preferences of the administration in charge at any given time. This latest OPM proposal gives the agency another box to check off in achieving compliance.