Federal pay dropsfurther behind jobs in private sector

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By Lisa Rein and Eric Yoder
Washington Post Staff Writers
Wednesday, November 3, 2010

Official numbers released by the government last week show salaries of federal workers falling slightly further behind their private-sector counterparts in the past year, by an average of 2.1 percent across the country.

The disparity shows wide variations among the 31 regions where the government compares federal pay with salaries for private-sector jobs in order to determine pay raises. The Washington-Baltimore area, for example, showed one of the largest gaps, with federal workers' pay 38 percent behind the private sector.

The new numbers were in Friday's annual report from the Bureau of Labor Statistics to the Federal Salary Council, a presidentially appointed panel tasked with recommending pay for federal workers. The gap cited Friday will help the council recommend government raises to President Obama for 2012. Congress has not approved a raise for 2011.

The new numbers are likely to keep the bitter debate over federal salaries on the front burner well after Tuesday's midterm elections. Last year's numbers put federal pay an average of 22 percent behind the private sector, a conclusion disputed by conservative think tanks and Republican candidates.

The government's numbers also show that it is higher-paid, more senior employees who tend to fall behind their counterparts at private companies, whereas lower-paid employees in government come out ahead.

"The highest-paid federal employee makes $400,000 a year," said Philip M. Doyle, assistant commissioner for compensation for the Bureau of Labor Statistics, referring to the president. "There's a cap on federal salaries that's going to keep the higher end from going too high."

Government pay experts said it is hard to tell why federal workers fell slightly behind. To determine where the pay of federal workers stands, the government surveys more than 230 jobs outside government, but the survey does not include Americans who are unemployed. The non-government salaries often include bonuses or incentive pay in financial services and other industries, which helps skew those salaries upward, said Allan G. Hearne, a pay expert with the Office of Personnel Management.

Republicans have seized on federal salaries as symbols of overspending by the Obama administration. They say a public-private pay gap exists, but in the opposite direction, with the private sector lagging 22 percent behind the government.

The nine-member salary council is unknown to most outside the federal government - and many inside. But it has a powerful role in recommending salary adjustments for up to 70 percent of the country's 1.9 million federal workers who are paid under the General Schedule. (Hourly employees and the Senior Executive Service are paid under a different system.)

The panel of union officials, labor relations and government pay experts determines not just the average pay gap but makes adjustments to the General Schedule with salary add-ons based on where jobs are located.

This "locality pay" is based not on the cost of living in metropolitan areas but on the relative salaries of private-sector jobs. On Friday, the council heard requests from some groups trying to shift jobs into higher-paying localities.

John Berry, the government's personnel chief, has said his staff is studying ways to tweak the salary system, in part by taking into account shifts in the labor market. For instance, if accountants are in high demand, they might be paid more; if there is little demand for administrative assistants maybe they should be paid less.

But Berry has said that critics of government salaries are making false comparisons by including all public and private jobs. Since the government workforce is more skilled overall than the private one, comparing all jobs skews private-sector salaries down, he has said.

Congress most likely will deal with federal salaries for 2011 as part of a general spending bill during the lame-duck session. A draft bill in the Senate would set the increase at 1.4 percent, as recommended by President Obama. The House has not taken a position.

reinl@washpost.com yodere@washpost.com


© 2010 The Washington Post Company

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