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By: FEDweek StaffNew figures from the Federal Salary Council show that the federal-private sector pay gap is 22.47 percent, slightly below the most recent prior figure of 23.11 percent in 2020. That continues a trend of decreases in each similar report from the 35.4 percent number of 2013 despite federal pay raises of only in the 1-2 percent in most of those years.
The number is the official—although controversial—measure of how federal and non-federal salaries compare, for purposes of the GS locality pay system. Under a 1990 law, locality pay sufficient to close the varying gaps by metro areas was supposed to have been paid by now. That hasn’t happened for reasons including the cost and disagreements over the methods used to compare salaries.
Instead, the measures of pay gaps by city areas are used mainly to divide up the portion of an annual raise that is designated as locality pay among the areas with their own rates and a catchall “rest of the U.S.” locality for areas outside those zones (Alaska and Hawaii also have specific rates covering the entirety of those states).
For January 2023, the most likely federal raise will be the 4.6 percent called for in the White House budget proposal earlier this year; that will take effect by default if no other figure is enacted into law before December 31. Both a House-passed spending bill and a draft Senate counterpart bill would allow a raise by default, a practice that has been common in recent years.
The Salary Council projected that a 4.6 percent raise would be split as 4.1 percent across the board and the rest divided as locality pay. That would produce raises varying by locality of possibly several tenths of a percentage point above or below 4.6. Presidents typically announce in late August how they would split a raise if Congress allows one by default.
The larger raises once again would be paid in several localities already receiving the highest rates—the top five in descending order, would be San Francisco, Los Angeles, New York, Seattle and San Diego. The bottom five, in ascending order, would be the “rest of the U.S.” locality; Corpus Christi, Texas; Palm Bay, Fla.; Indianapolis and Kansas City.
The council also backed creating—potentially effective in January, although rule-making would be needed—new localities for the Fresno, Spokane, Reno and Rochester, N.Y. areas, moving some 16,200 employees from the rest of the U.S. locality, the lowest-paid, into areas with their own higher rates.
That kind of increase also would apply to some 15,400 by loosening the rules on attaching outlying areas—called “areas of application”—to a locality using standards including levels of commuting from there into the core area; and to some 1,300 employees who would be moved from RUS into current localities by adopting the most current OMB definitions of city areas.
The next step is consideration by the President’s Pay Agent—the secretary of Labor and the directors of OPM and OMB—which most commonly accepts the Salary Council’s recommendations.
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See also,
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