Locality Pay Lament?

The release of the president's budget proposal always occasions a torrent of news stories, even though it's of course remarkably unclear whether those proposals will ever be enacted. But to my mind, the big news for federal employees in general yesterday came from the budget and the Office of Personnel Management. In the budget, President Obama proposed eliminating locality pay surveys and replacing them with an economic modeling process. And the report of the President's Pay Agent, released without fanfare yesterday, recommended that the government not implement locality pay for 2011because of the larger economic situation in the country.

Combined, do these two developments signal some kind of death knell for locality pay as an institution? Probably not. Getting rid of locality pay surveys could actually make it easier to create more locality areas because the Bureau of Labor Statistics wouldn't have to design and implement a new survey every time a new area came into being. And not having locality pay for one year doesn't mean it's gone forever. But I do think that these two developments, combined with language in the budget about how public- and private-sector raises have generally tracked each other closely (though the budget acknowledged that those statistics don't acknowledge educational and professional differences) suggest that the administration isn't entirely happy with the process for assigning federal pay and the conversation around it.

I don't think that's a surprise to anyone who's been following federal personnel news for the last year. But as the first concrete steps towards changing the federal pay system, the administration's locality pay proposals bear watching.