Federal employee salaries on average lag behind those of the private sector by almost 31 percent, an advisory council said Tuesday, while splitting between union and non-union members on whether to recommend potential changes in the way it arrives at that figure.
The average salary difference of 30.91 percent reported by the Federal Salary Council is somewhat smaller than the 31.86 percent it reported at a special meeting it held April. The figures of prior years were in the 34 to 35 percent range.
Those figures, based on two Labor Department surveys covering some 250 occupations, stand in contrast to assessments of some conservative and libertarian organizations that have concluded that the advantage is about the same or even greater in favor of federal employees.
The Congressional Budget Office last year essentially split the difference. It found an average advantage for federal workers of 3 percent, although within that average it said there is a wide range by educational level: from a 34 percent advantage for federal workers with a high school education or less to a 24 percent shortfall for those with a professional degree or doctorate.
Under a federal pay law, the “pay gap” as measured by the Salary Council is to be used in setting annual raises varying by locality for federal employees under the General Schedule, the pay system covering most white-collar employees below the executive levels. However, that law never has been followed due to the potential cost of paying such large raises and disagreements over how the figure is calculated.
In an August message to Congress, President Trump said that following the law’s formula would result in locality-based raises in January 2019 averaging 25.7 percent plus an across-the-board raise of 2.1 percent, at a cost of $25 billion. “Federal agency budgets cannot sustain such increases,” Trump’s said in backing a pay freeze that he originally proposed in a budget plan early this year.
A House-Senate conference underway on a spending bill will decide between a freeze and a Senate provision to pay an average 1.9 percent raise. Unless Congress passes, and Trump signs, a bill specifying a raise, salaries will be frozen by default. If the raise is enacted, it would vary slightly among 44 city areas and what is called the “rest of the U.S.” locality everywhere else; employees working in the Washington-Baltimore area would stand to receive one of the larger raises, probably around 2.3 percent.
The long-running controversy over comparing salaries flared at Tuesday’s meeting of the Salary Council, a group of federal employee unions and compensation experts whose decisions typically are unanimous.
A “working group” document produced since the April meeting laid out a series of potential changes for consideration by a higher-level body called the President’s Pay Agent. Those options included adding more detailed data on salaries by occupation and level of work, taking into account other data such as attrition rates, switching to a “total compensation” approach taking benefits into account, and conducting a very detailed review only once every four or five years — the latter two of which would require a change in law.
Council chairman Ron Sanders, a longtime career federal personnel official who is now a clinical professor at the University of South Florida School of Public Affairs, argued in favor of exploring those options. “I think it’s obvious to all of us that the current methodology is problematic,” he said.
“That methodology does not tell the whole story,” Sanders said. “It’s nice to say there’s a 30 percent gap. If OMB [the Office of Management and Budget] doesn’t believe it, the White House doesn’t believe it, the Congress doesn’t believe it, what good does it do?”
He pointed to the testimony of officials of federal agencies from several urban and rural areas not now receiving higher city-based locality pay, who told of their difficulties in recruiting and retaining employees despite using special hiring authorities and incentive payments. However, the current process doesn’t support specific salary rates for them, he said.
Two other members supported exploring the options: Katja Bullock, associate director of presidential personnel, and Jill Nelson, who leads an advisory committee on pay for blue-collar federal employees.
However, members from federal unions argued against changing the calculations and questioned whether the group even has the authority to raise new options for consideration. “I don’t think the methodology is broken,” said J. David Cox Sr., president of the American Federation of Government Employees.
“The elephant in the room is the Congress and the president over time not funding the pay system” as the law intended, said Randy L. Erwin, president of the National Federation of Federal Employees. Anthony M. Reardon, president of the National Treasury Employees Union, expressed concern that including the value of federal benefits “will be used as a justification to reduce those benefits.”
The council adjourned without voting on whether to recommend that the Pay Agent consider different approaches. Afterward, Sanders said that in the annual report to that higher-level body to be made by year’s end, individual members of the Salary Council could express their own opinions.