With federal workers facing pay freeze, Wall Street should do its part, too
Wednesday, December 1, 2010; 10:12 PM
Washington government workers and New York financial executives have one thing in common: The U.S. public despises them both.
But American society - led by President Obama and Congress - treats the two quite differently when it comes to paychecks.
Hard economic times mean the federal civilian workforce has to accept a pay freeze for the next two years, Obama said Monday. Some newly elected Republicans in Congress want to go further, urging 10 percent pay cuts across the board for U.S. government employees.
No such austerity is being forced on Wall Street. Pay there is on pace to break a record high for a second consecutive year, according to an October survey by the Wall Street Journal. Furthermore, Congress ducked the issue this summer when it passed the buck to regulators rather than require significant pay restrictions in a major financial regulatory bill.
This all means that annual Wall Street bonuses, which often exceed $500,000, are set to be even fatter in 2011. The average federal worker's pay of about $75,000 will remain the same.
The contrast is offensive because it highlights the extent to which the nation is not sharing the sacrifice equally as it struggles to recover from the slump. Nobody expects federal workers to be immune. They've got jobs, so they're already doing much better than the tenth of the country that's unemployed.
But lawmakers and regulators could surely insist on more frugality from investment bankers and securities traders whose firms were rescued by government bailout after their own greed and recklessness played the biggest single role in creating the 2008 financial crisis. Furthermore, without changes, the Wall Street pay structure will continue to reward the same kinds of short-term business strategies that helped cause the meltdown.
One deserving government employee who is stoic about the pay freeze but troubled by the inconsistency is Nicole Faison, who works as a program adviser at the headquarters of the Department of Housing and Urban Development.
Even the most vituperative critics of the federal workforce would have to concede that Faison is somebody whom the public should be happy to employ - and reward. She plays a leading role in identifying and blocking improper payments so low-income renters don't get excessive subsidies at taxpayers' expense.
In 2007, Faison's office won a President's Quality Award, the highest recognition for management excellence, after she developed a system that eliminated $2 billion in improper payments. In the last fiscal year, the total reduction was estimated at $38 million.
Like many federal employees, Faison was unsurprised and even accepting about the impending pay freeze.
"At the end of the day, no matter what my pay is, I'm going to do what's needed," said Faison, 39, who lives in Accokeek.