I intimated this in an earlier post, but here’s a bit more to chew on. From F. Vincent Vernuccio, writing in The Daily Caller:
While Obama’s plan would stop the annual across-the-board cost of living adjustment (COLA) for all federal workers, it will not stop workers from getting raises altogether. The freeze will not affect pay raises for job classification upgrades. As an official at the Office of Management and Budget told Federal News Radio, “employees will still be eligible for step increases.”
Step promotions — also known as “within-grade increases” — are mandated by statute. They are nearly automatic as long as an employee performs his job adequately. The law governing federal employee pay states, “a within-grade increase shall be effective on the first day of the first pay period following completion of the required waiting period and in compliance with the conditions of eligibility.”
Here’s how the system works. Over 70 percent of the federal workforce (except for the military and postal workers) is paid according to the Office of Personnel Management’s (OPM) General Schedule (GS) pay scale. GS includes 15 wage grades that reflect the category and skill necessary to perform a job, with 10 steps within each grade.
According to OPM, new employees can expect to receive a step increase every year, mid-level employees every two years, and senior employees every three years. Step increases can range from $728.00 for a GS 3 to $3,321.00 for a GS 15. Grade increases can range from $2,214.00 for a GS 1 to GS 2 to $14,931.00 for a GS 14 to GS 15. These numbers represent the ‘base’ amount for federal pay. The government gives a percentage increase for different areas of the country to reflect local variations in cost of living.
For example, despite the pay freeze, a government employee living in Washington, D.C., who is classified as a GS14 Step 1 and is upgraded to a GS 15 Step 2, will receive a raise of $22,672. The next year that same federal employee — without a promotion or grade increase — can see their pay go up by $4,126 through a step increase.
Even more importantly, the freeze would probably have happened anyway. Increases in federal pay and government assistance are calculated based on rising prices and higher costs. In October, the Social Security Administration (SSA) announced there would be no automatic COLA increase for the 58 million Americans receiving Social Security benefits.
[…]
President Obama said the freeze “would save $2 billion over the rest of this fiscal year and $28 billion in cumulative savings over the next five years.” Some economists claim that barely scratches the surface of the real savings that could be achieved if federal pay were brought into line with private sector wages.
Federal salaries have ballooned over the last few years and are far greater than salaries in the private sector. USA Today reports that, “the number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office”
As James Sherk of the Heritage Foundation notes, “Federal employees earn between 30 percent and 40 percent more than equivalently skilled private-sector workers…[M]ost federal compensation is not a contractual obligation and Congress can reduce it in those positions which are overcompensated. If Congress reduced this federal pay to market rates this would save taxpayers about $47 billion a year.”
Chris Edwards of the Cato Institute also discusses the inequity between federal government workers and those in the private sector. In a June study, he found that government sector workers earned an average annual wage of $81,258 in 2009, while private sector workers only earned an average of $50,464. He also notes that government salaries rose on average by 58 percent in the last decade while private sector salaries rose by only 30 percent.
Union officials have strongly criticized the freeze. American Federation of Government Employees President John Gage denounced it as the “scapegoating” of federal employees and “a superficial, panicked reaction to the deficit commission report.” AFL-CIO President Richard Trumka called the freeze “bad for the middle class, bad for the economy and bad for business.”
If we’re going to get serious about cutting spending, we might start by beginning to step down federal pay rates to bring them more in line with market rates. Then we can cut, say, 15-20% of all federal jobs on top of that.
But of course, we aren’t serious. Because if we were, we wouldn’t be adding bureaucracy and increasing the power of the Dept of Agriculture, or the EPA, or the FDA.
Too, Newt Gingrich wouldn’t be going around agitating for partial support of the DREAM Act. Karl Rove wouldn’t be out stumping for “compassionate conservatism”. And Mike Huckabee and Mitt Romney wouldn’t be considered viable candidates for the GOP presidential nomination.
I despair.
David Brooks says we all need these well paid Federal Government workers so’s we can build a great nation with a better character. Bankruptcy be damned.
I gotta admit Jeff, you hit the nail right on the head with questions about Romney, Rove, Gingrich and Huckabee. You’d think this most recent election results would give them a new perspective but I guess not.
They think we’ve shot our wad, and that we’ll all settle down now that we’ve had our little tantrum (except they’re Very Clever Ivy Leaguers, so they’ll couch it in terms like “catharsis”).
They’re very wrong. Funny how the cleverest guy in the room so often fails to see it coming.
We chose the wrong name for the ‘Tea Party’. Shouldve been the ‘Pitchfork Party’, with a side car of Tar and Feathers.
SquidCo™ has the pitchfork, torch, and tar and feather markets sewn up. However, if you feel a need to get up close and personal in your political activity, the CrankyCudgel™ can be a good companion.
Yeah, because those union stooges don’t want to miss their boat payments.
Yeah, because those union stooges don’t want to miss their boat payments.
Heavens, no! Could you imagine if these guys had to spend their dozens of paid days off at home?! Their wives would kill ’em! (Or make ’em weed the flower gardens, since they don’t trust Manuel to do a careful job.)
Don’t despair yet, wait until January when the Republicans take over and go right back to business as usual. Then you may despair.
On the bright side, the Senate Repubs have shown a little spine with their memo to Reid refusing to allow passage of any legislation that doesn’t address jobs and the economy. If they can hold the line against the lame ducks I’ll be at least a little bit encouraged. On the not-so-bright side, Senator Kyl appears to have suffered no ill effects from grabbing a $200 million earmark only three days after the Senate Repubs swore off earmarks. If he got so much as an irritated glance from his colleagues I’ve not heard about it. That doesn’t bode well for future fiscal discipline.
We shall see.. Of course I’m on record as believing that the only thing that will get government spending under control is actually running out of Other Peoples’ Money. Like alcoholics, they’re not going to quit until they hit bottom and we still have a short way to go before we get there.
The Big Question: Where exactly is The Bottom and how will we know when we’re there? When a big chunk of some city burns down because they laid off all the firemen, or the burning and looting starts and the last six cops are barricaded in their downtown bunker? When California or New York or New Jersey threatens to default on their debt if they don’t get a bailout and Congress lets them default? When all the oldsters get an IOU in the mail instead of a Social Security check? When the Fed can no longer print money as fast as Congress spends it? When Congress goes home and doesn’t come back because there’s no more money in the treasury to loot? All of the above?
I think there’s a factual error here:
You don’t go from a GS 14 Step 1 to a GS 15 Step 2. Step increases are for longevity in a particular grade and position, and the increased skill in that position that longevity implies. A move from one GS grade to another indicates a different position altogether, and the increased responsibility that comes with it. What’s being described here isn’t a “raise”, it’s describing someone taking a new position with increased responsibility and furthermore you don’t get a longevity increase for taking a new position.
Seth, if I had to guess, that should have been GS14 Step 2.
SDN,
No, the error is greater. There’s no $22K jump in a step increase. If fact, I don’t think there’s any such jump possible in GS, even those leaping to Senior Exec. Because the launch point for that leap would be very high already.
Cordially…
BLUF: my point is that there is (so far as I know) no such thing as taking a step up in grade AND taking a step increase. “Steps” are for longevity, grades are according to job responsibilities. You can get a new postion (grade increase) or a more pay for longevity (step increase). Both of those have an analogue in the
civilian job market: if I get promoted from the line to management, I should expect more pay. If I stay in a postion for years, I should also expect more pay than new hires to that same position. I see no scandal in the principles at play here.
Just FYI, here’s the OPM table for the GS scale which the pay in the article was calculated against. Washington DC has a high (although not the highest) locality adjustments. A locality adjustment is a percentage deviation from the base pay scale according to the relative expense of the local housing market. The highest locality adjustment is in the San Francisco area.
Something to consider: the GS scale tops out at GS 15. So is the point of the article that senior executive level workers in the government shouldn’t get senior executive level compensation? I’d argue again that there is an analogue to this in the civilian job market: senior executives tend to get remunerated handsomly for their higher level of responsibility than the line workers.
Now, that’s not saying that perhaps some positions aren’t too handsomly compensated given their relative (lack) of responsibilites, or that perhaps there aren’t too many GS workers. Both of those sentiments may be true.
One more thing to consider: on the GS scale, only at the highest steps of the highest grade in the most expensive locality does pay top $150,000 per year (a fairly exclusive club any way you cut the cake). So when you read that there are now more topping that level than ever before, they’re probably not really talking about the GS scale at all…there are other pay scales for government work.