NOT ENOUGH: AFGE national President J. David Fox says pay increase for Federal workers is insufficient since it does not provide locality-based adjustments.

At the start of the Labor Day weekend, President Trump endorsed an across-the-board 2.6-percent pay increase for the two-million-member Federal workforce, but without a locality differential.

Previously he had been demanding a wage freeze. The President announced his shift in an Aug. 30 letter to Congress, with the Washington Post reporting that he did so “to prevent a much larger increase from taking effect automatically.”

Under the Federal law that covers government employee compensation, “a default raise kicks in if Congress doesn’t legislate a raise by the end of the year,” the newspaper reported.

Had he not acted, the 2.6-percent raise would have automatically taken effect, along with locality-based increases “averaging 24.01 percent, costing $24 billion in the first year alone” according to his letter to Congress.

“We must maintain efforts to put our Nation on a fiscally sustainable course; Federal agency budgets cannot sustain such massive increases in locality pay,” Mr. Trump wrote.

Unions’ Mixed Reaction

“The across-the-board pay raise next year is a positive step for the public servants who keep our country running every day,” American Federation of Government Employees National President J. David Cox Sr. said in a statement. “Federal employees have endured years of pay freezes and incremental adjustments that have failed to keep pace with inflation, and Federal agencies are struggling to recruit and retain employees due to noncompetitive salaries that lag private-sector standards.”

He continued, “But the pay raise falls short by failing to provide any locality-based pay adjustments, which are essential if the government is ever going to make real progress is closing the wage gap between the Federal and private sectors.”

National Treasury Employees Union President Tony Reardon stated, “A pay freeze was simply uncalled for given the pay gap between Federal employees and those in the private sector, along with all the challenges Federal employees have faced, including the longest partial government shutdown in our nation’s history.”

House More Generous

In June, the House of Representatives voted to provide all Federal employees a 3.1 percent raise next year, which would be divided between a 2.6 percent across-the-board increase and an average 0.5% locality adjustment. The AFGE said that raise formula would ensure that the Federal Government would continue its “decades-long tradition of providing pay raise parity between civilian and military employees.”

The Senate has not yet taken a position on a civilian Federal employee pay increase, but it joined the House in endorsing a 3.1-percent increase for uniformed military personnel.

Last November, the Federal Salary Council, an advisory panel set up under the Federal Employees Pay Comparability Act of 1990, determined that Federal workers’ pay averaged 31 percent less than that of their private-sector peers. The Council’s findings were based on annual surveys done by the Department of Labor’s Bureau of Labor Statistics of the pay trends for 250 different occupations.

Historically the FSC, which is composed of independent compensation experts and the leaders of the unions that represent the Federal workforce, reaches a consensus. But in April, a faction of the panel proposed collecting data using a “total compensation” approach that would include Federal employee benefits, the paper reported.

‘Doesn’t Tell Whole Story’

Ron Sanders, chair of the panel, was the leading proponent of changing the formula. “I think it’s obvious to all of us that the current methodology is problematic,” he told The Post. “That methodology does not tell the whole story. It’s nice to say there’s a 30-percent gap. If [the Office of Management and Budget] doesn’t believe it, the White House doesn’t believe it, the Congress doesn’t believe it, what good does it do?”

That approach would be more in line with the longstanding critique from conservative and libertarian think tanks that have great influence in the Trump White House and believe the Federal workforce is too large and overcompensated.

The panel’s members representing the unions rejected altering the methodology, maintaining the prolonged Federal Government shutdown, along with lagging employee compensation, were preventing agencies from hitting their hiring and retention targets.

PBS reported that a survey by ZipRecruiter of 1,940 government workers affected by the shutdown found that 67 percent of those surveyed said it made them consider leaving government employment for the private sector. “Of those looking for work, 89 percent said the shutdown was causing them a significant financial hardship,” PBS reported.

The 35-day shutdown came as hundreds of thousands of civil servants contemplated their retirement options. One in four Federal civil servants is older than 55, with just 17 percent younger than 35, compared to 40 percent in the rest of the economy.

Looming Skills Gap

Succession planning and employee retention has been a particular challenge in the scientific and technical fields for the Federal civil service. Earlier this year, the Government Accountability Office flagged skills gaps in “government-wide occupations in the fields of science, technology, engineering, mathematics, cybersecurity, and acquisitions.”

“Causes for these skills gaps vary; however, they often occur due to a shortfall in one or more talent management activities such as robust workforce planning or training,” the GAO reported. “Additionally, the changing nature of Federal work and the high percentage of employees eligible for retirement could produce gaps in leadership and institutional knowledge and could threaten to aggravate the problems created from existing skills gaps.”

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