Could pay freeze send feds to private sector?

“I’m confident that we have an overall value proposition for employment that’s quite strong and that a lot of people do want to serve,” Zients said during a conference call Nov. 29 about President Barack Obama’s proposal to eliminate federal pay raises for two fiscal years.

Zients has also said the government needs to recruit the most qualified workers, and the pay freeze would not be an impediment.

“This freeze will not get in the way of our efforts to bring in the best and brightest,” he said.

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But it's Zient's boss proposing the pay freeze. Do experts outside of the administration agree?

At least one does. Jennifer Kerber, vice president of federal and homeland security policy at TechAmerica, said the private sector might not have much more to offer federal employees. Industry is still coming out of an economic recession, which means budgets are tight and hiring is slow, said . Companies are wrestling with the ramifications of the recession and taking tough actions, such as cutting employees’ pay to avoid layoffs. Furthermore, the benefits packages in the private sector often are not as generous as the government’s.

“I think if a government employee wanted to jump ship for a better paying private-sector job, it might not be so easy to find, and in the end, the net pay increase would be less because of the decrease in benefits,” Kerber said.

Meanwhile, the pay freeze's impact on federal employees' retirement income is a major concern for labor unions. Pensions are calculated based on the average of the employee's highest income for three consecutive years. Because of the impending pay freeze, employees who will be eligible to retire soon might face lower retirement income.

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