Federal employees paid under the General Schedule (GS) system received a base salary increase of 1% on January 1, 2014. This marked the end of a three-year pay freeze. Locality rates remained the same as they have been for four years. Blue Collar federal workers received the same 1% as a result of language in the FY’14 Financial Services Appropriation bill, passed in January.
Both the GS and the Federal Wage System (blue collar) pay systems are supposed to adhere to a standard of “market comparability” in pay-setting. Politics are not supposed to play any role in determining federal pay. Yet beggar-thy-neighbor politics and budget austerity conspired to deny market-based pay adjustments for federal pay for three years.
According to the law, base salaries should have been adjusted by 6.9% over the past four years (rather than the 2.5% actually provided), and double-digit locality pay adjustments should have been provided to supplement these changes. The average gap between what private sector firms and state and local government pay for jobs similar to those performed by federal workers has now grown to roughly 35%, although it varies widely by locality.
The Federal Salary Council (FSC) and the Federal Prevailing Rate Advisory Council (FPRAC) are statutory labor-management bodies that advise the president on pay. During the freeze, the administration has refused to implement any recommendation from either body that would result in federal employees receiving higher pay.
Now that the freeze is over, Congress and the administration must work to undo the damage to federal pay standards and be aggressive in closing pay gaps and implementing new locality boundaries based upon the most recent Census data for both blue and white collar pay systems.