Tackling the Problem of Federal Pay Caps
New Year, new Congress, new . . . Resolve. The 118th Congress offers a fresh chance to secure a fair pay raise next year, and FMA has renewed vigor and resolve to make important changes to attract and retain the best and brightest to public service.
Federal managers, and indeed all feds, deserve to be treated with respect for their efforts and the work they have performed over many years. Every job they hold and perform daily is because of a congressional mandate. It is not too much to ask that, in return, feds be given the ability to maintain a living wage that provides for them and their families.
Federal employees did receive the highest pay raise (4.1 percent) in twenty years in 2023. But that’s not really saying much when ten of those twenty years saw a pay raise of 2 percent or less, including three pay freezes. Simply put, federal pay has not kept pace with inflation (6.5 percent in 2022 and 7.1 percent in 2021), increases to the Federal Employee Health Benefits Program (the average enrollee share increase for 2023 was 8.7 percent), or comparable private sector salaries in a locality pay area. The Federal Salary Council reported in 2022 that federal workers earned more than 24 percent less than private sector counterparts, a growing disparity that is driving many good feds out of public service and repelling others from considering it.
Taken together, this means retention of feds is at severe risk. But the new year, and new Congress, offers a chance to start fresh and make meaningful changes. First and foremost, FMA urges Congress to pass the Federal Adjustment to Income Rates (FAIR) Act (H.R. 536 / S. 124), introduced by Rep. Gerry Connolly (D-VA) and Sen. Brian Schatz (D-HI), respectively, which would provide an 8.7 percent pay raise in 2024. This is an important first step that recognizes the disparity with the private sector and begins to address it.
Additionally, the federal pay cap has not kept up with the higher cost of living in many cities across the United States. This issue plays a role in recruitment and retention to the federal workforce, which already has hiring issues. If an employee is offered a promotion at a higher level, with more responsibilities, but no corresponding salary increase, will they take on the new role? Many employees who are now capped are tempted to leave the government for the private sector where there is no pay cap. Congress must address this problem before it grows exponentially. Delegate Eleanor Holmes Norton (D-DC) began work in the 117th Congress, and FMA will assist her office address this harmful situation in the new year.
Further, FMA supports proposals to remove the cap on Federal Wage System (FWS) employees as a vital way to retain good workers through better pay and unfair caps. We are concerned by the loss of these workers, whose pay is supposed to be set according to local prevailing rates – rates which compare to the same types of jobs performed by their non-federal counterparts. The federal workforce is losing too many FWS employees to the private sector due to current compensation levels, and the pay cap on these employees must be removed.
We often hear that seven percent of the workforce is made up of employees aged 30 or younger. This is an alarming statistic, particularly when considering the same age group makes up 24 percent of the private sector workforce. While there are many variables that factor into that, the basic concern about receiving a living wage and reasonable compensation is chief among them. The federal government can and should do better by its dedicated workforce, and FMA will continue our fight for fair compensation for feds with a renewed resolve in the new year.
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The views reflected in this column are those of FMA and do not necessarily represent the views of FEDmanager. To learn more about the Federal Managers Association (FMA), visit their website: FedManagers.org.