The Trump administration has projected that its study of comparing “total compensation” of federal vs. non-federal employees to replace the current measure that focuses only on salary will be completed in the first part of next year but that the next step—to review those results and “develop a strategy” to carry them out—is about a full year away.
The effort aims to “obtain market information and study the federal government’s competitive posture in total compensation for civilian federal employees, to include base pay, benefits, awards, and other relevant total reward elements,” according to the latest update on the President’s Management Agenda.
However, given the time line, the effort likely will have little to no impact on prospects for a January 2020 raise. The White House has proposed a freeze but the House has approved an appropriations bill containing a 3.1 percent increase; the Senate has not yet written its version of that bill but likely will soon.
The current pay comparison system, dating to a 1990 pay law, involves Bureau of Labor Statistics comparisons of federal vs. non-federal pay in some 250 occupations in what are now 50 localities, as well as in a number of other city areas that are considered possible candidate for specific pay rates. That process has annually resulted in findings that federal employees are behind in pay by about a third on average. Other studies, including several by the CBO, have said that the average difference is only several percentage points, with the least-educated federal employees ahead but the most-educated substantially behind.
Over the years there have been numerous calls by conservatives to include the value of health insurance, retirement, leave and more in the comparison. The most recent occurred last year when the administration’s appointees to the Federal Salary Council, which produces the official “pay gap” figures based on BLS data, advocated considering a range of possible changes to the methodology, including taking benefits into account.
The council ultimately didn’t endorse any change, however, due to opposition from the more numerous members representing federal unions—who called including the value of benefits a strategy to hold down annual raises.
Underlying the position of both sides is an assumption that federal employee benefits are superior on average to the private sector’s. CBO found that to be the case—mainly due to federal retirement benefits—although it cautioned against reading too much into that conclusion, given the wide range of private sector practices and the difficulties in projecting the future value of retirement benefits.
A formal recommendation from the White House about a year from now would be in time for the salary council to consider next year in advance of the January 2021 raise. However, given the union opposition on that council to including the value of benefits, a change in law likely would be needed.