Federal Pay Freeze Was Really A Pay Slowdown

The Huffington Post’s Dave Jamieson argues that Rep. Paul Ryan’s proposed budget “ignores” a two-year pay freeze for federal employees. But Jamieson also ignores another simple fact.

[T]he House Budget Committee chairman appears to get a simple fact wrong on recent federal worker pay. “Immune from the effects of the recession,” the budget reads, “federal employees have received regular salary bumps regardless of productivity or economic realities.”

In fact, federal employees have now been working under a pay freeze for more than two years, their part of a shared sacrifice toward budget control announced by President Obama in 2010 and backed by Congress.

While it is true that Obama imposed a pay freeze, that does not mean that federal employees could not get pay increases under the freeze. As my former colleague F. Vincent Vernuccio noted at the time of the announced freeze, federal workforce rules make many increases mandatory.

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.

Thus, like most spending “cuts” that get bandied around Washington these days, the “freeze” is really a slowdown in the rate of increase, which is precisely the problem. Digging slower is no way to get out of a hole.

Moreover, as the Cato Institute’s Dan Mitchell points out, the Ryan budget, while a step in the right direction, is hardly the meat cleaver approach Democrats would deride it as: “Federal spending will still be far too high. Indeed, the budget will consume a larger share of the economy than it did when Bill Clinton left office.”

For more on labor policy, see workplacechoice.org.