Report Finds Federal Pay Falling Further Behind the Private Sector

The good news on the public sector pay front is that most federal employees are in line for a 5.2% salary increase in 2024.

In an Aug.31 letter to House and Senate leaders, President Joe Biden formalized his plan to provide federal workers their biggest raise since the Carter administration. For next year, Biden determined an across-the-board base pay increase of 4.7%, with locality pay bumps averaging 0.5%, equating to an overall average raise of 5.2%, the same percentage the president first put forward in March of this year, as part of his 2024 budget proposal.

The not-so-good news emerging from a new Federal Salary Council report, however, is that, even with the significant bump on the horizon, the pay gap between federal employees and their private sector counterparts is actually increasing.

In its Nov. 14 report, the council—an advisory committee that provides recommendations on locality pay issues to the President’s Pay Agent—noted that federal employees took home an average of 28% less in wages that private sector workers over the past year. That figure represents a 3% in pay disparity compared to the council’s 2022 report, and a 6% spike from 2021.

Describing the pay gap uncovered in the Federal Salary Council as “alarming,” National Treasury Employees Union (NTEU) President Doreen Greenwald said in an NTEU statement that this disparity “proves what federal employees have been feeling all year.

“Their paychecks are not keeping up with inflation and monthly bills are increasingly harder to cover,” said Greenwald. “It is outrageous that our nation’s civil servants have lost ground in the fight for fair pay, and it makes our push for an adequate raise in 2024 all the more urgent.”

As Federal News Network has reported, the NTEU was among the organizations voicing support for passage of the Federal Adjustment of Income Rates (FAIR) Act, which, if enacted, would provide an 8.7% average raise to general schedule employees.

In the aforementioned NTEU statement regarding the Federal Salary Council’s recent report, Greenwald also endorsed the council’s recommendation that, going forward, the federal government seek across-the-board pay increases equal to the full Employment Cost Index, which measures the change in the hourly labor cost to employers over time. Taking such steps, along with increasing locality pay by at least 0.5% or 1%, “would help reduce the pay disparities at a faster rate,” according to the NTEU.

“At a time when federal agencies are struggling to retain and attract talent, a competitive wage is even more important,” Greenwald continued. “Every year the Federal Salary Council hears directly from local civil leaders across the country who plead for higher salaries so that federal employers in their area can fill critically important vacancies. An across-the-board raise plus increases in locality pay will help agencies keep and hire the skilled employees they need to deliver vital services to the American people.”