Public-private pay gap widens

None Photodisc
The pay gap between government employees and private-sector workers grew 2.25 percent this year in favor of private-sector workers, the Federal Salary Council announced Friday.

The average pay gap in 2011 was about 26.3 percent, compared to 24.05 percent in 2010, according to survey data from the Bureau of Labor Statistics. The disparity is largely due to the two-year pay freeze enacted in January affecting federal civilian employees, the council said. According to the Employment Cost Index, private-sector pay increased about 1.6 percent between March 2010 and March 2011.

Miami and Washington were the only locality pay areas that experienced a decrease in the pay gap between government employees and private-sector workers.

"This growing pay gap is not surprising, since the federal workforce is in the midst of a two-year pay freeze," said National Treasury Employees Union President Colleen Kelley, who is a member of the Federal Salary Council. The group is made up of federal pay policy experts and union leaders and uses information from BLS to make recommendations to the President's Pay Agent on comparison methods and locality areas and rates.

The statistics come amid debate over whether government workers are overcompensated -- an argument that has fueled many recent proposals targeting federal pay and benefits. Comparing wages and benefits of government employees and private sector workers is an imperfect science because there are many variables, including age, education, different pay scales and bonus opportunities.

In May, the President's Pay Agent decided that civilian government workers would not receive an increase in locality pay in 2012, as a result of the two-year pay freeze. The President's Pay Agent, which consists of the Labor secretary and directors of the Office of Management and Budget and the Office of Personnel Management, also declined to change the locality pay designation in six metropolitan regions or add any geographic areas to the list.

In his fiscal 2011 budget, President Obama proposed ending the locality pay surveys that help determine the gap between public and private sector pay and replacing them with a new method for measuring compensation. BLS traditionally has used estimates from the National Compensation Survey, which collects data by occupation and work level from 36,000 businesses and government agencies nationwide. The new model incorporates information from the bureau's Occupational Employment Statistics program, a mail survey that samples 1.2 million businesses and covers all U.S. metropolitan areas. The figures released Friday were based on both NCS and OES data.

On Friday, the Federal Salary Council recommended the President's Pay Agent reinstate the full National Compensation Survey program and the use of NCS data to determine 2013 locality pay rates. The group also recommended retaining the 34 existing locality pay areas and adding new ones for Albany, N.Y.; Albuquerque, N.M.; Bakersfield, Calif.; Charlotte, N.C.; and Harrisburg, Pa. The President's Pay Agent usually decides on locality pay for the next year each spring.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.