Is the 5.2% pay raise enough for feds? Union says no

Thanks to several economic headwinds afoot, a record-setting pay raise for federal employees ain’t what it used to be.

Though President Biden inked the largest federal pay raise since 1980 last month, there are concerns from at least one federal employee union that ongoing inflationary pressures are eating into the 5.2% pay bump — a 4.7% across-the-board increase to basic pay, along with an average 0.5% increase in locality pay — that workers received. 

Officials from the National Federation of Federal Employees, which represents more than 110,000 workers nationwide, said in a release earlier this month that inflation and a widening compensation gulf between the public sector and its private sector counterparts means the federal government must do more to help its talent keep pace with the economy. 

“Thank you to President Biden for signing into law the largest pay increase for federal employees in more than 40 years,” said NFFE National President Randy Erwin in a statement. “Congress must understand that to attract and retain a skilled workforce that best serves the American people, we need to pay our civil servants competitive wages.”

The 5.2% pay raise was already somewhat of an anomaly, because it was initially proposed by the White House in March and saw backing in both the House and Senate versions of the fiscal 2024 National Defense Authorization Act, but still needed approval from Congress.

However, amid the ongoing budget appropriations impasse, Congress never offered its own pay raise plan before the end of the year, leaving President Biden to cement his by executive order. 

However, NFFE notes that even with the executive order, federal employees in lower locality pay areas of the country could see a bump as low as 4.94%. Meanwhile, Federal Wage System employees could see shifting rates determined by “prevailing rate calculations for a specific area” and wouldn’t get the raise until fiscal 2024 pay limitations have been put in place.  

Because of this, NFFE officials backed legislation from Sen. Brian Schatz, D-Hawaii, last year dubbed the Federal Adjustment of Income Rates, or FAIR, Act. The FAIR Act proposed to raise federal employee wages by 8.7% when combined with base and locality pay, but the bill never made it out of committee. 

This comes as Bureau of Labor Statistics data showed in November that federal workers made 27.54% less on average than their private sector counterparts, up from 24.09% in 2022. 

To help ensure that federal employees can keep pace with the economy, particularly when agencies are striving to both attract and retain talent, some have called for strategies like incorporating incentive payments for sought-after positions as a way to narrow the private sector pay gap. 

In response to a proposed Office of Personnel Management rule issued Jan. 16 to expand the authority to waive the normal payment limitations on recruitment and relocation incentives, Partnership for Public Service president and CEO Max Stier said the federal government should widen its scope even further. 

“The federal government should go beyond this individual approach and analyze the compensation for full fields of difficult to hire positions,” he said in the proposed rule’s comments. “This would enable agencies to provide competitive incentives to reduce pay gaps, quicken the time to hire more broadly and broadcast to current and potential employees that the federal government is willing and equipped to compete for their talent.”

Meanwhile, NFFE officials said they will continue to call for broad-scale reforms such as updates to the Federal Wage System, better data to capture the economic growth happening in locality pay areas to elevate pay and better alignment between the FWS and General Schedule systems, for which there is currently legislation on Capitol Hill that the union supports.