Pay Gap Grows

Federal workers are now paid an average of 30 percent less than their private-sector counterparts, with government employees in two cities working for only half the wages of comparable non-federal employees, according to a new report.

In its annual report to the administration on federal employees' raises, the Federal Salary Council recommended an average 10 percent increase in locality rates for 1999 to shrink the pay gap. Locality rates are based on the cost of living in major metropolitan areas. Combined with the standard nationwide cost-of-living increase awarded federal employees each year, the average 1999 raise would be about 13 percent.

The Federal Salary Council calculates the pay gap in cities across the country using Bureau of Labor Statistics surveys. According to the council's tally, the average pay gap as of March 1997 was 30.43 percent. In Houston the gap was 47.83 percent and in San Francisco it was 49.64 percent. The Washington, D.C. area gap checked in at 31.60 percent.

The 1990 Federal Employees Pay Comparability Act (FEPCA) lays out a formula to grant annual locality pay raises to close the gap. But Congress and the administration have consistently used a loophole in the law to issue smaller raises than the Federal Salary Council has recommended. Critics say the methods used to calculate the pay gap are flawed, but no alternative method has been developed. So each year the gap as calculated by the Federal Salary Council expands.

"As the council has underscored in the past, a greater portion of the gap needs to be made up in 1999, not because of the movement in non-federal pay, but rather because of congressional and presidential action to limit the locality increases called for under FEPCA since 1994," the council said in its report. "This is a development that should be of great concern to all involved in federal pay decisions."

But the two most important decisionmakers do not appear concerned. Under the Balanced Budget Agreement passed this year, Congress and the administration estimated only a 3 percent raise for federal workers in 1999.