GovernmentExecutive.com

A specialist in the Congressional Research Service is drawing renewed attention to the issue of crowding at the top of the federal pay scale.

Curtis Copeland, a specialist in American national government at CRS, told members of a House subcommittee Tuesday that ceilings limiting maximum compensation are creating compression at the high end of pay schedules, and cases where the officials in one system are paid as much as higher-ups in another. And while pay compression is not a new issue, it is a growing problem, testimony from the hearing indicates.

In 1991, for example, Cabinet secretaries and others at the top of the Executive Schedule were paid 28.2 percent more than employees at the top of the Senior Executive Service scale. But in 2007, top Executive Schedule salaries were only 11 percent more than those of the highest paid SES employees working under certified performance appraisal systems, Copeland said. In fact, top SES employees earned the same salaries as deputy Cabinet secretaries, senators and members of the House -- those in level II of the Executive Schedule.

Last year, the Government Accountability Office found that employees in the Executive Schedule are losing buying power. Using the gross domestic product price deflator, GAO found that Cabinet secretaries make 27 percent less than they did in 1970.

Compression is beginning to affect the upper reaches of the General Schedule as well, Copeland said. Under current law, base and locality pay for employees under the GS system cannot exceed level IV of the Executive Schedule, which stands at $145,400 nationwide, he said. As a result, GS-15 employees at steps 7 through 10 in nine locality pay areas are unable to receive full pay increases, he said.

Pay compression also has caused GS-15 salaries to bump up against the first levels of SES pay, said Linda Springer, director of the Office of Personnel Management. "You have people in GS-15 who don't find it particularly attractive to move to the SES level," she said.

"The primary drivers behind this cascading set of pay compressions appear to be limits on [Executive Schedule] salaries and the linkages between the [Executive Schedule] and other pay systems," Copeland said.

A 1989 ethics reform law includes two provisions under which pay rates for officials under the Executive Schedule can be set, including one that provides for a quadrennial review of such salaries by a Citizens' Commission on Public Service and Compensation. But the commission was never established, largely because initial funding was rescinded in a 1994 appropriations act, Copeland said.

He recommended that Congress begin to re-examine pay compression and connections among federal pay systems "to avert even more pay compression problems in the future." Such an examination has not been conducted since the 1989 ethics reform law was enacted, he said.

Copeland also brought to light reports that federal employees are paid more than their private sector counterparts. He pointed to one article published last month in the Asbury Park (N.J.) Press that concluded that federal workers are paid almost 50 percent more than employees in the private sector.

But Copeland cautioned that there is an established process for comparing GS pay rates to those outside government. Such comparisons are administered by OPM and use data from the Bureau of Labor Statistics. "That process has been examined by top compensation experts in academia and elsewhere, and found to be valid and reliable," Copeland said, concluding that federal and nonfederal pay comparisons outside of the congressionally authorized process are much less precise.

OPM reviews "have found consistently that federal pay lags behind the private sector by as much as 50 percent in some localities," Copeland said.

COMMENTS

• Wait until you are under Core-Comp pay. All the pay bands max out, and once there we only get the Presidential cost of living raise each year as a lump sum payment. It is not added to our base pay, therefore you do not get the extra going into retirement, TSP or Life Insurance. The only time you see a raise to base pay is when the Administrator raises the pay band maximums. However, in the past they added the percentage total across the board to everyone's yearly pay, this year they decided to go up around middle of the pay band and everyone above that point received the same amount as the middle. So, we did not receive the same percentage as the people below us, and bonuses? If I am fortunate I might receive a $150 for the year. In case you are wondering I am equivalent to a GS-8 step, however they now earn more than I do at FV-E Pay Band. Cindy Posted August 7, 2007 4:14 PM
• It is sometimes embarrassing to see your words and thoughts in print; particularly when emotion gives reign. I hope my fellow readers will forgive the inadequacy of my last posting. My major problem with these bonuses is the disparity between the 1% (average) bonus, the 5% maximum of NSPS raise, and the 10+% of these bonuses. So saying I have some questions. I’ve not found it in the literature, but often seen it here in this forum. Is it true that the highest raise a person can get under NSPS is 5%, even if getting a promotion and going from a non-supervisory to a supervisory position? If so and, if I remember correctly, the SES were the first to convert to NSPS, how does any SES receive a 10 to 15% annual bonus? Perhaps my memory is faulty, like my tongue and fingers in some of these responses, but such a difference seems reminiscent of the benefits of an aristocracy. Being a numbers-oriented fellow, I realize that the minuscule number of SES, when compared to the vast number of we civil servants, allows large bonuses to have a much relatively smaller budgetary impact. Still, in a situation requiring buy-in from the working plebs to facilitate a sea change in administration, IMHO such a change would have been facilitated with more equitable dispersion of limited funds. It’s almost biblical when the SES, such as Don, proclaims in their defense, “There will always be poor.” Well, your success depends solely upon these poor laborers. We ask only a fair shake, like the proposed Fair Tax. Dan, as often pointed out in these forums you rip into so frequently, those pay raises (step-increases) are not yearly or guaranteed. As for the (often but not assured) annual COLA adjustment, the specific goals of those is to reduce turn-over in the federal employment, reduce training costs, and maintain a knowledgeable population; yet another difference between not-for-profit and for-profit businesses. Tip off Posted August 7, 2007 9:17 AM
• A few of thoughts I’d like to share: 1. Ref: “top SES employees earned the same salaries as deputy Cabinet secretaries, senators and members of the House -- those in level II of the Executive Schedule.” Am I to worry that the Tog Dogs can’t go higher while many struggle to make ends meet? I’m just wondering if those $14,000+ bonuses figure into these salaries. If not, then they should. If so, and that is still insufficient to motivate these folks, perhaps they should seek solace elsewhere. That may make room for new blood and stagger the pending retirement wave. 2. I’ve heard so much about the ES and the SES being capped, but getting outrageous bonuses. I do not begrudge such unless it comes at the expense of the masses. Why is the pending retirement wave worrisome only at top levels? Is that why more and more of our limited budget is being suck increasingly to high grade/high cost areas like DC? What is a GS-11 anywhere else is a GS-12 there; THEN they slap on the plused-up COLAs and bonuses. 4. There has been so much talk about the “Fair Tax”, how about a “Fair Raise”? How about a “Fair COLA”? Why keep injecting inflationary wage increases into high cost of living areas when a pay increase across the board (demographically and geographically) might just hold down prices and encourage people to relocate to lower cost areas? This lagging of civil servants behind industry only seems a problem at levels above the drowning average worker. Please consider that those magnificent minions would not be where they are, productivity speaking, without that ever eroding base of the common worker. Tip off Posted August 6, 2007 10:39 AM