New Data reveals the widening of the Federal Pay Gap with the Private Sector.
There may be an increasing wage disparity between the federal government and the private sector. may Be widening, According to New Data. Union representatives pushed the Biden administration to offer a more generous raise than the 4.6% average increase planned for the following year, and a body representing executives encouraged officials to look into more extensive pay reform initiatives.
The wage disparity between federal employees and those in the private sector is again expanding, as per the new data presented at a Federal Salary Council meeting last week.
Federal workers’ average pay was 22.47% less than their private sector counterparts in 2021, according to statistics from the Bureau of Labor Statistics that compared federal government and private sector remuneration in recent years. However, the pay gap increased to 24.09% this year.
The new statistics, according to National Treasury Employees Union National President Tony Reardon, is another proof that President Biden has to enact a greater pay boost than the 4.6% average salary increase he has suggested for the upcoming year.
The National Treasury Employees Union and other federal employee unions favour a proposal from Rep. Gerry Connolly, D-Va., which might give federal employees a 5.1% average pay raise in 2023. However, Congress has declined to adopt the proposal in fiscal 2023 appropriations discussions.
There has been much discussion regarding the formula used to determine the wage disparity between federal employees and those employed by the private sector. Conservatives have argued that policymakers should include non-salary benefits, such as health and retirement insurance programs, into the model to compare “total compensation” between sectors because a model like that would imply that federal employees are highly paid compared to those in the private sector. Federal employee groups, however, prefer the current BLS model.
Last month, representatives of the libertarian Cato Institute hailed the excellent news that the federal pay gap shrunk in 2017 according to their own “total compensation” statistic. Even though government employees continue to have an “advantage” over their colleagues in the private sector, the think tank’s analysis found that the total pay gap has shrunk thanks to the private sector’s rapid real wage growth—a 7.7% rise in 2020 and a 5.9% increase in 2021.
A broader overhaul is required if federal agencies are to successfully attract and retain high-performing employees, according to the Senior Executives Association, which advocates for career federal executives before the salary council. This advisory body makes yearly recommendations to the administration on federal employee compensation.
According to director of policy and outreach at SEA,Jason Briefelalmost 75-year-old General Schedule pay structure is ill-equipped to fight with the private sector on pay concerns, especially at the higher end of the scale where pay deflation has become an increasingly significant issue. He also attributed some blame to the federal employee unions’ resistance to attempting to alter the government’s compensation structure.
Therefore, what we need right now is for the unions on the Federal Salary Council to stop delaying broadly supported changes to the federal compensation system.
