Federal workers would "lose" $30,000 in pay raises and fringe benefit improvements over the next five years -- according to Reagan administration math -- if Congress okays the president's plan to completely overhaul government pay-setting machinery. That is a lot of money considering the fact that the average white collar U.S. worker today has a $21,000 salary.
In metro Washington, the government's high-grade, high-pay headquarters town, the average white collar U.S. salary is $23,000.
Reagan's plan, which goes to Congress shortly, would eliminate the government's nationwide pay scale system in favor of a local approach and change the way future raises -- based on private industry pay -- are computed.
The pay reform plan that former president Carter recommended in his last budget would have resulted in a U.S. raise this October of about 5.5 percent. Reagan's pay reform package would reduce that October boost to 3.8 percent.
Pay reform would link U.S. salaries to the prevailing wage rate for similar private sector jobs city-by-city. That system now is used for the government's half-million blue collar (wage board) workers. Reagan bought the Carter concept of matching the value of federal wages and (often more generous) fringe benefits against similar packages offered in industry. And it would require government statisticians to include the value of pay-fringes for 10 million state and local government workers in calculating pay increase averages for the private sector on which federal white collar pay decisions are supposed to be made.
The big change Reagan is proposing would limit future federal pay raises to 94 percent of the compensation "comparability standard" of private industry. Currently federal workers are supposed to get pay raises based on salary increases granted in selected private companies surveyed annually by the Bureau of Labor Statistics. Carter, and now Reagan, felt that the limited salary-only matchup does not reflect accurately compensation changes in the private sector. Each year the so-called "comparability with industry" raise due federal workers has been shaved by presidents. U.S. workers last year were due about 14 percent under the comparability system but Carter gave them only 9.1 percent. The year before, federal workers got 7.1 percent -- about half the comparability increase called for under the standard.
This is the justification for the 94 percent recommendation, from the administration's budget-briefing paper: Establishing the federal compensation standard at 94 percent of average non-federal compensation would recognize "those aspects of federal employment which make it more attractive than many comparably paid jobs in the private sector. For example, a federal employe may change jobs and career paths many times during a career in the federal service with no loss of retirement, leave or other benefits. A comparable employe in the private sector seldom can obtain comparable treatment."
The report says the revised comparability system would reduce "outlays from the current services base by $3.8 billion in 1982 and approximately $30 billion over the next five years." For the one million white collar U.S. workers, that translates into a $6,000 per year loss, over the next five years, in what they could expect to get if the current comparability system -- which has not been followed -- were followed.