12/06/2010

So much for Obama's promise to freeze Federal workers' salaries

After getting wage increases faster than inflation over the last couple of years, a two-year pay freeze would just get federal workers closer to what other American workers have been getting. Over the last two years, average weekly earnings for all private sector employees increased by 3.74 percent in hourly earnings and by 3.73 percent in weekly earnings, a 1.9 percent increase per year. Over that period of time Federal workers got a 3.9 percent base salary raise in 2009 and a 2 percent increase in 2010 -- that is a net increase of 5.98 percent over two years. But this doesn't account for the step increases that occur virtually automatically for federal workers. And because of these other increases it is clear that a freeze for Federal workers isn't really a freeze at all. From this piece below it appears that on average these steps increase federal pay by about 3 percent every 2.5 years, or about 1.2 percent per year. Add 1.2 percent to the 3.9 and 2 percent increases in the last two years implies an increase over those two years of roughly 8.5 percent. Not bad given the comparison to private sector workers. Even a complete freeze for the next two years would very likely leave federal workers still better off than their private sector counterparts.

President Obama spoke of the need for sacrifice last week when he announced a two-year pay freeze for federal employees.

But feds won't be too terribly deprived in 2011 and 2012. Despite the freeze, some 1.1 million employees will receive more than $2.5 billion in raises during that period.

Congress is expected to approve Obama's proposal, which cancels only cost-of-living adjustments for two years. Regularly scheduled step increases for the 1.4 million General Schedule employees — who make up two-thirds of the civilian work force — will continue. The size of those increases ranges from 2.6 percent to 3.3 percent and by law kick in every one, two or three years, depending on an employee's time in grade.

John Gage, national president of the American Federation of Government Employees, called Obama's plan "wrongheaded" and driven by politics. But he said the news that step increases will not be affected takes some of the sting out of the decision.

"They're doing this as a symbol, but it's the wrong type of symbol to take it out on working people making basic wages," Gage said.

But Rep. Jason Chaffetz, R-Utah, called the retention of step increases a hole in Obama's plan. He also said the administration should freeze hiring and reduce the federal payroll from $447 billion to $400 billion.

"Somehow, someway I think this country can survive on just a $400 billion payroll," Chaffetz said. He is the ranking Republican on the House Oversight and Government Reform subcommittee on the federal work force, and could become chairman when Republicans take control of the House next year.

In addition to General Schedule employees receiving step increases, some of the government's roughly 187,000 wage-grade employees also will receive step increases.

And many employees will receive promotions, which also come with salary increases, Jeffrey Zients, the Office of Management and Budget's deputy director for management, said last week.

Many senior employees won't get raises, but will receive bonuses for good performance, although OMB and the Office of Personnel Management are telling agencies to cap bonuses at 2010 levels. OPM said it does not yet have information on fiscal 2010 bonuses, but the Asbury Park Press of New Jersey reported in June that the government paid $408 million in bonuses to 359,400 people, an average $1,135 each, in fiscal 2009. . . .

Thanks very much to Tony Troglio for this last link.

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