Federal salaries lag 22.5% behind private sector, report says

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Salaries for federal employees are 22.47% lower on average than their private sector counterparts in comparable jobs, an advisory group said in a report on Friday that noted that the “pay gap” has remained stable. over the past two years.

The findings of the Federal Wage Council underscore the need for President Biden’s proposed 4.6% increase for federal employees, the unions said.

“With the latest inflation numbers, rising private sector wages and the new pay gap calculation, it’s even clearer that federal employees need help to deal with rising costs and that the government needs help in recruiting and retaining qualified employees,” the National Union of Treasury Employees said. Chairman Tony Reardon said in a statement.

The last time the federal wage gap was calculated, at the end of 2020, the council reported a gap of 23.1%.

The council calculates wage differences on a national average and by some four dozen urban areas using Department of Labor statistics on labor costs — not cost of living — according to a formula fixed by a federal wage law.

However, assessments using other datasets and methods have come to very different conclusions. Some conservative and libertarian organizations have found that federal employees earn more than private sector workers, while the Congressional Budget Office in 2017 found that federal employees were slightly ahead on average but lagging behind among those with higher incomes. higher levels of education.

Biden’s recommended pay rise would be the biggest for the executive branch’s 2.1 million workers in two decades. Under the Wages Act, if Congress does not pass a figure by the end of the year, this recommendation automatically takes effect.

That looks likely to happen, with the House recently passing a spending bill for 2023 making no mention of an increase. A comparable bill in the Senate is also silent. However, employee organizations and some Democrats in Congress continue to push for 5.1%.

In most years, the increase figure becomes an average, with some being paid at all levels and the rest being paid in amounts that differ depending on where employees work. This year, the board calculated that employees working in the Washington-Baltimore area would be in line for one of the biggest raises.

The wages board projected that 0.5 percentage points of the 2023 increase would go to location-based pay, though that’s also up to Biden to decide whether Congress leaves matters in his hands.

By urban area, the largest increases in 2023 would be paid to employees working in the San Francisco-Oakland, Los Angeles, New York, Seattle-Tacoma, San Diego and Washington-Baltimore areas. The smallest would be paid to those working in the catch-all locality outside designated urban areas, called the “rest of the United States”

At its Friday meeting, the board also recommended creating new localities in the Fresno, California, Spokane, Washington, Reno, Nevada and Rochester, NY areas, and expanding the boundaries of a number of localities. existing. This would increase the salaries of some 33,000 employees by moving them out of the catch-all locality.

Recommendations from the council now go to a higher-level group called the president’s payment officer made up of the heads of the labor department, the office of management and budget, and the office of personnel management. This group in turn reports to the White House, with the final decision on a raise usually being made in a year-end presidential order.

The American Federation of Government Employees called on the group to accept the recommendations, saying they would “put extra money into the hands of federal employees who are paid less than their colleagues.”

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