Feds will soon see first pay raise in three years - but not all will benefit

Wednesday - 1/1/2014, 2:00am EST

Federal employees have reason to greet the new year with a little more enthusiasm than usual: After a three-year pay freeze enacted by Congress to help reduce the deficit, feds will finally see a slight across-the-board raise this year.

The slight 1 percent increase ordered by President Barack Obama last month is smaller than union advocates had pushed for, but it's the first time since 2010 most civilian employees will see a bump in their basic rate of pay.

"This long-overdue modest pay raise for federal government employees is a good step in recognizing the value of federal workers," said Sen. Barbara Mikulski (D- Md.), when Obama issued the Dec. 23 pay order. "They have been the targets of unending attacks. They've been furloughed, laid off and locked out through no fault of their own. I believe federal employees should never be scapegoats in fights over deficit reduction."

Still, the modest pay raise only applies to white-collar employees under the General Schedule system. Some 200,000 blue-collar federal workers at places such as the departments of Defense and Veterans Affairs as well as the U.S. Bureau of Prisons, will not see a similar increase in pay.

That's because pay increases for blue-collar feds, known as wage-grade employees, are governed by separate legislation — which Congress failed to address before leaving for the holiday recess.

Rep. Matt Cartwright (D-Pa.), whose district includes the Tobyhanna Army Depot, which employs more than 1,800 wage-grade federal employees, introduced the "Wage Grade Employee Parity Act," in November to ensure that blue-collar feds receive the same scheduled pay increase as their GS counterparts.

However, despite urging by the American Federation of Government Employees, Cartwright's bill never made it out of committee.

Locality pay remains frozen

In contrast to the across-the-board pay bump, locality pay — the complex system of pay adjustments designed to boost pay for workers in 34 specific metropolitan areas — will remain frozen at 2013 levels.

Locality pay generally applies in areas where the rate of average nonfederal pay exceeds average federal pay by more than 5 percent, as determined by the Federal Salary Council.

Federal-employee unions point to the three-year pay freeze and the continuing hold on locality-pay adjustments as contributing to an ever-widening pay gap between the public and private sectors. On average, federal employees earn more than 35 percent less than their private-sector counterparts, according to a report issued by the salary council last month.

Obama ordered a two-year freeze on federal pay at the end of 2010 following the recommendations of the bipartisan Simpson-Bowles commission tasked with finding ways to reduce the deficit. Congress supported the measure with legislation.

Obama sought to end the freeze in 2012, proposing a miniscule 0.5 percent pay increase for the following year. However, in the fight over a must-pass 2013 spending bill to avert an impending government shutdown, Congress included a measure extending the pay freeze through the end of the year.

Things turned out differently last year, though.

In August, the President, echoing a proposal included in his official 2014 budget proposal, called for a 1 percent pay raise. It was, at first, unclear whether Congress would, once again, block the proposal. But in both the funding bill ending the government shutdown in October and in the bipartisan budget deal announced last month, lawmakers were mum on federal pay, clearing the way for Obama's proposed increase.

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