Panel: Pay advantage increases for private-sector vs. federal work

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White-collar federal employees are underpaid on average by about 35 percent compared with the private sector, a widening of the “pay gap,” which stood at about 26 percent last year, an advisory group said Friday.

The Federal Salary Council based that number on data from the Bureau of Labor Statistics that by law are supposed to be used in setting annual General Schedule pay raises.

Federal workers have had their pay frozen for two years. In August, President Barack Obama announced plans to extend the freeze until April. He has proposed a modest 0.5 percent increase afterward.

Members of the council, composed of union leaders and outside pay experts, attributed the wider gap to the freeze and to changes in the methods that BLS uses in its pay comparisons.

“This clearly shows that there is a pay gap and that federal employees are underpaid,” said J. David Cox, president of the American Federation of Government Employees and a council member. “Hopefully, we can get back to reasonable cost-of-living adjustments and work on the pay gap.”

“I think on federal pay there's too much misinformation and fiction out there,” said Colleen M. Kelley, president of the National Treasury Employees Union and also a council member. “There's a very long history to this methodology. Even if someone wants to argue with what the number is, it's important to address that there is a gap and it continues to grow. There's no way to make the number zero, if you're basing it on facts.”

Plenty of people are ready to argue. Federal pay has been a long-running point of debate, but the cost of the government workforce has drawn heightened scrutiny in recent years, including during the presidential campaign. Along with proposing a 10 percent workforce cut through attrition, Republican nominee Mitt Romney argues that federal workers are overcompensated by 30 to 40 percent on average.

That assertion is based on a study by the conservative Heritage Foundation, which also calculated benefits; on salary alone, the foundation gave an average advantage to federal workers of 22 percent. The government's data do not reflect the value of benefits.

“No one who takes a look at these numbers, other than federal employee unions, concludes that federal employees are massively underpaid,” said James Sherk, the Heritage Foundation senior policy analyst who performed the think tank's study.

Other studies using different methods and different sets of data have found federal employees ahead on average by varying amounts, with differences by education and other factors. The Government Accountability Office recently said that none of the approaches of comparison is definitive.

Federal officials have noted that its workforce ranges from groundskeepers to physicists (David Wineland recently won a Nobel Prize). Those with advanced degrees, they say, earn less than their private-sector counterparts.

Federal pay raises vary by locality. According to the Office of Personnel Management, the data show that federal workers who are the farthest behind are in the Washington-Baltimore area, about 50 percent on average. The data show that employees on average are more than 40 percent behind in San Francisco-San Jose, San Diego, Los Angeles and New York. The smallest gap, about 23 percent, affects workers outside the 31 city areas that are specifically studied.

The salary council's recommendations go to a higher-level body, which in turn reports to the White House. In practice, federal pay raises are negotiated in the congressional budget process.

While general raises have been frozen, individual employees remain eligible for increases based on performance, promotion or successfully completing the waiting periods used in some federal salary systems.

bc-federal-pay (TPN)

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