Workforce

Feds make almost one-third less than private-sector peers

employee data (kentoh/Shutterstock.com) 

A federal council overseeing general schedule locality pay at the Office of Personnel Management reported that federal employees make 32 percent less than their private-sector counterparts, and recommended six metropolitan areas be added to the locality pay program for 2019.

Based on data from the Bureau of Labor Statistics, a new report from the Federal Salary Council states private-sector workers are, on average, paid 31.86 percent more than federal employees performing similar work.

The localities with the largest pay disparities, according to the report, were in the San Francisco, and Washington, D.C./Baltimore, Md., areas. In the DC-Baltimore area, pay disparities between the private and public sector generally grew the higher up the general schedule.

This seems to cut against a 2017 Congressional Budget Office report, which found feds across all education levels earned 3 percent higher wages than private sector workers "with certain similar observable characteristics." That report, however, noted the estimates "do not show precisely what federal workers would earn if they were employed in a comparable position in the private sector."

The discrepancies in findings regarding pay gaps likely stem from differing methodologies; the council, at its first meeting since 2016, recommended further discussion be held on whether to further review its salary survey methodology.

In a December 2017 report, the President's Pay Agent – a committee including the head of OPM, the secretary of labor and the head of the Office of Management and Budget -- raised "major methodological concerns" with the way the Federal Salary Council calculates pay gaps.

That report also noted the necessity of "fundamental reforms" to the federal pay system.

Other recommendations made by the council included adding six new special pay rate localities to the President's Pay Agent.

Four of the six areas — Birmingham, Ala.; San Antonio, Texas; Burlington, Vt.; and Virginia Beach, Va. — have already been at least tentatively approved by the President's Pay Agent. The remaining two — Omaha, Neb., and Corpus Christi, Texas — are new additions.

Currently, there are 45 locality pay areas nationwide.

Tony Reardon, a council member and the president of the National Treasury Employees Union, which represents 150,000 employees from 31 federal agencies and departments, said the report raised concerns about government's ability to attract skilled employees.

A civilian pay freeze, as proposed by the White House's fiscal year 2019 budget, "coupled with the fact that private-sector workers earn on average about 32 percent more than their counterparts in the federal government, only puts the U.S. government further behind in the competition for highly skilled workers," he said.

The White House budget, which also proposes cuts to federal retirement benefits, calls for a 2.6 percent pay increase for military pay, as well as a $1 billion fund to reward federal employees at managers' discretion.

About the Author

Chase Gunter is a staff writer covering civilian agencies, workforce issues, health IT, open data and innovation.

Prior to joining FCW, Gunter reported for the C-Ville Weekly in Charlottesville, Va., and served as a college sports beat writer for the South Boston (Va.) News and Record. He started at FCW as an editorial fellow before joining the team full-time as a reporter.

Gunter is a graduate of the University of Virginia, where his emphases were English, history and media studies.

Click here for previous articles by Gunter, or connect with him on Twitter: @WChaseGunter

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