Federal Employee Advocates Renew Fight for Huge Pay Raise

Federal employee advocates are renewing a push for a pay raise more than three times the size of the one proposed by President Obama, saying civil servants’ wages have fallen significantly behind those in the private sector.

The Federal-Postal Coalition, a collection of more than 20 unions and associations representing employees across government, wrote a letter to lawmakers this week imploring them to support a measure that would raise federal employee pay by 5.3 percent in 2017. Obama proposed a 1.6 percent raise, the largest in six years.

That proposal appears to be advancing without congressional interference, as lawmakers have to date declined to inject any language into spending or other bills to block it. The fiscal 2017 Financial Services and General Government Appropriations Act would institute pay freezes for certain high-level political appointees and others, but states none of those specific carve outs “shall prevent employees who do not serve under a political appointment from receiving pay increases as otherwise provided under applicable law.” 

The measure was scheduled for a vote on the House floor this week, but a sit-in by Democrats protesting a lack of vote on gun safety bills derailed those plans. Republican leadership adjourned the chamber until after the Fourth of July, when the body is once again expected to debate the bill.

The spending measure allowing the pay raise could still face turbulence, however, as the White House has threatened a veto of the bill. The administration’s concerns with the bill relate to a series of non-pay raise issues, including funding shortages for Internal Revenue Service, General Services Administration and other agencies; U.S. Postal Service delivery requirements; and other factors.

Even if the financial services spending bill passes and the president accepts it, Congress can take alternative action to block -- or increase -- the proposed pay raise, either through standalone legislation or as an attachment to another bill. The Federal-Postal Coalition is pushing lawmakers to accept the 2016 Federal Adjustment of Income Rates (FAIR) Act, a proposal to give feds a 5.3 percent raise. The group said the while private sector salaries jumped 11.3 percent and the cost of living increased 9.2 percent over the past six years, federal employee wages increased 3.3 percent.

“Federal employees are underpaid whether they are physicians working at the National Institutes of Health, [Federal Aviation Administration] staff and air traffic managers, engineers, scientists, lawyers, or administrative workers and Department of Defense civilians supporting our military,” the coalition wrote. “At a time when we need to recruit the best and brightest to civil service, federal pay is falling further behind the private sector and living standards for federal employees and their families continue to decline. A catch-up raise to reflect market rates in 2017 is imperative.”

So far just four senators have attached their names to the bill, while 66 House members have -- all of whom are Democrats.

President Obama proposed a 1.6 percent pay raise in his fiscal 2017 budget blueprint, the highest since 2010, when federal employees received an across-the-board increase of 2 percent. Feds received a 1.3 percent raise this year, including the first locality pay adjustment since 2010. Still, in the larger historical context, raises under Obama have been quite low.

If there is no specific legislative language that provides funds or prohibits an across-the-board raise in any bills -- either stand-alone or omnibus legislation -- then the president has the authority to determine a pay raise based on the Employment Cost Index.

The president has until Aug. 31 to formally announce his 2017 pay raise proposal for federal employees. If the president doesn’t inform Congress of his alternative pay plan for feds by that date, then the increase mandated by the 1990 Federal Employees Pay Comparability Act kicks in. Under FEPCA, the raise would be determined by the change in the Employment Cost Index minus 0.5 percent. In 2017, that rate would be 2.1 percent.

Presidents, however, have largely ignored the FEPCA formula in their federal pay raise proposals, preferring to offer their own figure, which they are allowed to do under law. Congress created FEPCA, which provides an annual across-the-board salary boost and a locality pay adjustment for General Schedule employees, to close the public and private sector pay gap.

If the 1.6 percent raise goes into effect, the annual increase will have been below the FEPCA formula for eight consecutive years. In its budget document, the White House projected federal employee pay will have dropped 9 percent compared to the private sector during the Obama presidency.

“This would be the largest relative pay cut over an eight year period since the passage of FEPCA by a significant margin,” the administration said, noting “the second largest eight year drop, from 1990 to 1997, was roughly 2 percent.”

New federal employees’ earnings have been hit the hardest, the budget highlighted, as their pay freezes were combined with higher contributions to their pensions. The White House said their compensation has dropped off more than 10 percentage points relative to the private sector between 2009 and 2015.

In November, the Federal Salary Council, made up of federal employee union representatives and pay experts, found a pay gap between General Schedule employees and private sector workers of 34.92 percent. The council’s report conflicts with other studies -- including those from conservative-leaning think tanks -- that show federal employees earn more than those in the private sector.

A recent report from the Cato Institute found feds earned 78 percent more than their private sector counterparts, though a Government Accountability Office pay expert has said that study did not compare apples to apples.

A 2012 GAO study concluded there is no definitive way to measure any potential gap. A Congressional Budget Office report found that public and private sector salaries were about comparable, but that education level played a role in pay disparities between the two groups.

Here’s a look at the various studies on the federal pay gap. The CBO findings are separated by education level: professional degree (CBO PD), bachelor’s degree (CBO BD) and high school degree (CBO HS).