No, the Federal Pay Systems Are Not Broken

Categories: Pay, The Insider

While the United States continues to suffer from systemic racism and ongoing problems with gender inequities, the federal pay systems have quietly continued to protect all federal employees from discrimination.   

Indeed, if the General Schedule for salaried employees and the Federal Wage Grade System for hourly workers were adequately funded, they would be the absolute gold standard for what a pay system should be: fair, flexible, and capable of promoting excellence.   

But no one is talking about these amazing qualities of the federal pay systems (except for us). Instead, there are endless attempts to discredit these systems – attempts that often cover up critics’ real agenda: introduce into the government a huge pay gap between the highest and lowest paid workers in order to drive wages down, create new venues for budget politics, and foment hostility towards the very notion of a working-class person earning a decent living.   

The short-lived National Security Personnel System (NSPS) is an excellent example of the government robbing Peter to pay Paul so they didn’t have to pay everyone fairly.   

NSPS gave Defense Department managers a limited pool of money to allocate to employees as they saw fit, and the result was disastrous. Massive racial and gender discriminations ensued – white males in the Pentagon received larger raises than anyone else in the department. The farther away employees were from D.C., the less money they received. Congress quickly ditched NSPS after three years.   

Then there have been attempts, mainly supported by contractors disguised as “good government groups”, to justify the government’s refusal to sufficiently fund the federal pay systems. These industry critics are hoping that any new system will involve a lot of consulting contracts for the always-complex strategies they can employ to hide pay inequities. 

5 great things about the federal pay systems nobody’s talking about  

If you care about fairness and equality, you would be happy to learn that our federal pay systems were designed to promote that and also to create a good balance among several other factors.   

Here are 5 great things about the current system industry critics don’t want you to know:   

  1. Federal pay systems protect workers against discrimination 

Federal pay systems are designed to pay everyone who does the same job the same salary regardless of race, gender, age, religion, political belief, and others.  

This is the concept of equal pay for equal work or work of equal value. Different jobs in the government pay the same amount for equal levels of skill and responsibility.   

That’s the reason why the federal pay system does a far better job of avoiding gender discrimination than its private-sector counterpart. In the private sector, for every dollar a man makes, a woman makes 82 cents doing the same job, adjusted for occupation and education. That’s 18 cents different. A similar study in the federal government shows that the gap is much smaller – only 7 cents. We need to keep fighting to close this to zero.  

What does that translate into? For every $35,000 earned by men, women in the private sector are paid $28,700, and in the federal sector are paid $32,550. The gender pay gap shouldn’t exist at all, but these numbers show the federal pay systems are far superior to those in the private sector when it comes to preventing pay discrimination.   

  1. Federal pay systems are flexible  

Federal managers do have flexibility when it comes to the pay issue. They have a lot of flexibility on starting salary, quality step increases (QSI), withholding step increases, paid time off, recruitment bonuses, retention bonuses, relocation bonuses, and just plain old performance bonuses.   

  1. Federal pay systems recognize professional excellence 

Federal employees do get recognized for their great work. Federal managers can award good employees with bonuses, QSIs, paid time off awards, and promotions.  

  1. Federal pay systems promote career mobility 

Most federal job classifications come with a career ladder. The classifications are sensitive to whether the job expectations are at the entry level or journey level. There is a clear path for career growth that goes along with experience (and the assumption that you get better with experience).   

  1. Federal pay systems are based on sound, objective statistical methods  

In the 1980s, federal workers’ salaries lagged far behind those in the private sector, so Congress passed the Federal Pay Comparability Act (FEPCA) of 1990 to fix the pay inequity between the federal and private sectors. The law defines “market comparability” as 5% below salaries paid in the private sector and state and local government for jobs performed by federal workers.   

There are two components to the annual pay adjustments under FEPCA: across-the-board adjustment and locality pay adjustment. Data used to calculate pay adjustments and pay gaps comes from the Labor Department’s Bureau of Labor Statistics (BLS) that measures inflation of wages and employer-paid benefits, among other things.   

The statistical models used by the professional economists at BLS in support of the federal pay comparability system are of extremely high quality. BLS economists have attended several meetings of the Federal Salary Council, which advises the White House and executive branch on federal pay issues. They patiently explained to the members exactly how the models have been created and improved over the years. They explained how they perform under rigorous testing protocols, how the raw, observed data are collected, what assumptions underlie the models and why, what degree of certainty the results of the regression analysis provide, and so on.   

BLS data show federal salaries still lag behind those paid by employers in the private, state, and local government sectors by a nationwide average of 23%. By law, that gap was supposed to have been closed 19 years ago, but opponents of paying federal employees market rates always cite budget and other issues as reasons not to close the gap.   

A better way forward  

Critics who deride the federal pay systems because they claim they want the government to be able to recruit and retain a talented federal workforce couldn’t be more wrong. If they really want to attract the best and the brightest, do what we have been telling them to do all along: invest in the workforce.   

By that we mean:  

  • Pay workers fairly by closing the pay gap and giving federal workers the annual pay raise (we suggest 3.2% in 2021) 
  • Provide excellent healthcare and retirement benefits (so stop trying to cut even more plus reverse earlier cuts) 
  • Pay federal employees at least $15 an hour (there are more than 6,000 hourly federal workers and 16,000 salaried workers who are paid less than $15 an hour)
  • Pay Wage Grade employees the same locality pay rate as GS employees working in the same location (right now those working in the same building for the same employee traveling the same roads to get to and from workmaynot get the same locality pay due to quirks of the system – but AFGE has been able to bring those cases forward and win equal locality pay in many instances)  
  • Provide paid family and medical leave (you will instantly become a national hero-slash-model employer everyone’s looking up to)
  • Provide hazard pay to feds who can’t work from home during the COVID-19 pandemic (a real morale booster) 
  • Get Transportation Security Officers on the GS pay scale and grant them full collective bargaining rights under Title 5 (this will help reduce employee turnover and boost morale) 
  • Insist that it is our country’s moral obligation to take care of our veterans by maintainingveteran’spreference in the federal hiring process (they take the bullet. The least we can do is give them, especially those with a disability, a fighting chance to serve their countrymen in another capacity)  
  • Expand employees’ rights to join a union to give them a voice at work and more say in their working conditions (forward-looking organizations know everyone does better when employees have a say in the work they do) 
  • Treat employees’ unions as partners to help make the federal government a better place to work (we are ready to be your partner!)

The federal pay systems have an excellent structure. They just need to be adequately funded because federal workers deserve to be paid fairly.  


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