Federal employees in the Washington-Baltimore area will receive a 4.94 percent pay increase, starting in January, under an executive order signed by President Clinton yesterday.

In keeping with pay practices established in 1994, Clinton's order gave white-collar federal employees nationwide a 3.8 percent increase and provided a separate adjustment called "locality pay" that varies by metropolitan area.

The pay boost will amount to $2,950 for the average, non-postal federal worker in the Washington-Baltimore area, bringing the average annual salary in the region up to $62,663. [General Schedule rates by grade and step are reported in the Federal Diary on Page B9.]

The process for setting federal pay--from the original budget proposal to congressional negotiations to presidential decision--takes on great significance in the Washington area, where about 250,000 non-postal executive branch employees live and earn salaries that play an important role in the local economy.

The raise--roughly double the rate of inflation--will also enhance other employee benefits, such as thrift saving plans for retirement and time-in-grade raises that numerous civil servants automatically receive.

Under the pay formula approved by Clinton yesterday, federal employees in 16 cities--including Chicago, Houston, Los Angeles, New York and San Francisco--will receive a larger net increase in pay than Washington-Baltimore area employees.

No area will receive less than a 4.69 percent increase.

The 2000 pay raise amounts to the largest salary boost since 1981. House and Senate negotiators agreed in September to give federal workers an average pay raise of 4.8 percent but left it to the Clinton administration to determine how to weight the increase for each locality.

Locality adjustments, based on wage surveys in 32 geographic areas, are supposed to bring federal salaries in line with the rates of pay for private-sector workers performing the same kind or level of work.

Clinton and Congress have modified the original process that was envisioned, partly because some lawmakers and administration officials questioned the methodology used to determine the "pay gap" between federal salaries and those paid by private employers.

Under the Year 2000 pay schedules issued yesterday, House members and senators will be paid $141,300 annually. The vice president, speaker of the House and chief justice also get raises, to $181,400. Annual salaries for Cabinet officers and House and Senate leaders will increase to $157,000.

Members of the Senior Executive Service (SES), the elite cadre of government managers, also will receive pay increases. Their salaries will range from $106,200 to $122,400 next year. But about half of SES members will be bunched at the top rate, even though the SES pay rules provide for six different salary levels.

SES salaries suffer from "pay compression" because they are linked to congressional pay, which does not rise every year because of lawmakers' reluctance to give themselves annual raises.

As a result, several federal agencies have encountered difficulties in recruiting and retaining executives because their government salaries are no longer competitive with those offered by large companies.

Locality Pay Across the U.S.

Net pay increases in 2000 for General Schedule employees.

Area Increase*

San Francisco 5.59%

Houston 5.52

Los Angeles 5.31

New York 5.25

Chicago 5.23

Detroit 5.22

Boston 5.13

Hartford 5.12

Denver 5.11

San Diego 5.09

Miami 5.03

Portland, Ore. 5.01

Philadelphia 5.00

Seattle 4.99

Sacramento 4.98

Cincinnati 4.96

Minneapolis 4.94

Washington, D.C. 4.94

Cleveland 4.90

Dallas 4.88

Milwaukee 4.86

Columbus, Ohio 4.85

Atlanta 4.76

Richmond 4.76

Dayton, Ohio 4.73

Orlando 4.70

Pittsburgh 4.70

Huntsville, Ala. 4.69

Indianapolis 4.69

Kansas City 4.69

St. Louis 4.69

Rest of the United States 4.69

*Includes 3.8 percent across-the-board increase and the increase specific to each locality.

SOURCE: Office of Personnel Management