Money, Money, Money

EXECUTIVE MEMO

Money, Money, Money

anuary should bring civil servants a 3 percent pay raise and, for the first time in several years, and a cost-of-living hike for retirees. President Clinton already has approved a 2.3 percent nation- wide General Schedule raise. In November, he was expected to approve additional locality pay averaging 0.7 percent, bringing the total average raise to 3 percent.

Retirees got a break this year when Congress failed to continue delaying their COLA payments until April. Congress had planned to continue that schedule (without White House objections) but failed to pass the measure, so COLAs will revert to the January date. Federal and military retirees will get a 2.9 percent COLA, as will Social Security recipients. COLAs are based in the 12-month change in the Consumer Price Index, which is measured annually in September.

General Schedule raises are supposed to be based on the Employment Cost Index, a measure of the change in labor costs, to close the gap between private-sector and federal salaries. The Clinton Administration has criticized the way the gap is measured and has rejected pay recommendations based on the formula. In March, the Bureau of Labor Statistics estimated the gap at 30.03 percent. Under the 1990 Federal Employees Pay Comparability Act, combined nationwide raises plus locality pay raise should have averaged 5.7 percent for 1997.

The Federal Salary Council says 1998 locality pay should average 14.3 percent.

Source: OPM

PAY RAISE ROLLER COASTER

Here's how nationwide General Schedule pay raises fluctuated over the last 10 years.