Federal Salary Council Releases Recommendations on Federal Pay

Earlier this week, the Federal Salary Council “weighed potential changes to how the Bureau of Labor Statistics calculates pay disparities to determine which regions require their own locality pay levels so that federal employees’ pay keeps pace with workers in the private sector,” according to Erich Wagner at Government Executive.

The effort is far from the first of its kind, with various groups in D.C. generally falling into two camps, with some suggesting that research, such as that released by the Bureau of Economic Analysis, shows that the federal workforce is overcompensated, while the other side points to other studies from CBO, GAO, et al…suggesting that the federal workforce is underpaid compared to its private sector counterparts.

A Congressional Budget Office (CBO) review of the matter in 2017 found some level of support for both sides, with the study actually finding an increase in the margin by which some feds are overpaid, and also an increase in the margin by which others are underpaid. The gaps vary depending largely on education level, with less-educated federal workers more likely to outpace their private sector peers on pay and benefits. However, at the time, even CBO noted that readers should approach the data with caution.

“Even within groups who have … similarities, the average differences in compensation between federal and private sector employees do not indicate whether particular federal employees would receive more or less compensation performing a similar job in the private sector,” the report said.

The Federal Salary Council’s most recent attempt to conclusively tackle the matter resulted in five recommendations to the president’s pay agent. The Council’s recommendations are to:

  1. Continue to use the current methodology,
  2. Adopt a salary method that “reduces the extent of statistical modeling,”
  3. Continue to use the current methodology and use other human capital data on attrition and acceptance rates, for example, to make future salary-based decisions,
  4. Develop a method that compares both federal employee pay and benefits to those of the private sector, and,
  5. Find a way to conduct a comprehensive, periodic review of total compensation for federal civilian, white-collar employees. This review may be similar to the Defense Department’s Quadrennial Review of Military Compensation.

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