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GovLoop has teamed up with the Washington Post to host a "Federal Worker Question" each week. This week's question is:

0.5% Pay Increase: Woo-Hoo or Whoop-De-Doo?

As Natalie Jennings at the Post puts it:

Tags: Federal Buzz, Washington Post, careers

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Let's say you make $50,000. That would mean 0.5% is $250 in your pocket over a year, right?

Not a whole lot...

So do people think it's worth a big fuss over that much of a difference? Why make a big deal this year over .5? Is it about more than the money?

It's also about how this adds up over time. It's not just a 1-year bonus of $250, it's an extra $250 (or more) for as long as you're on the job. And that's what fuels both sides to fight on this issue, the effect on people's incomes is over their career, just as the effect on the deficit is in the long run, not just this year's budget.



True - and to Tony's point below, this adjustment does not keep track with inflation. And the impact of compounding interest - either saving that $250 or paying down debt (or not) - creates a cumulative impact.

Generally with budget cuts and pay freezes comes downsizing. Is it fair to have your workload continually increase while your pay doesn't equal up to the additional workload?

Good point, Lisa. One of the residual affects. It really is an overall environment shift that leads to diminished morale, lackluster performance and...well, a vicious cycle ensues, right?

People need to stop calling this a "pay raise" as this annual "adjustment" to federal salaries is supposed to cover the cost of inflation and 0.5% is a laughable increase when compared to even the most underestimated CPI figures.  The anti-gov political types like to call it a "pay raise" for Feds b/c it gets them attention and votes, but this is a misnomer.

Federal employees get pay raises through the Grade/Step process, which is based mostly on merit and longevity.

Just my .02

Just your 0.5%? ;-)

And though Grade/Step has some merit-based elements, I'd add another underline for longevity. But not even longevity is rewarded with a 0.5% adjustment.  What a disincentive to stay...

I feel Federal Pay Increases actually lowers Federal Employees Standards of Living. If we get a 1% raise, lets say $100 a month, after taxes that would mean around $75.

Well the U.S. Cost of Living seems to follows Federal Pay so if Feds get a 1% pay increase EVERYTHING goes up 1%, e.g. insurance premiums, food, clothes, building supplies, etc. But since we had to pay taxes our $100 is now $75 in additional disposable income and with everything else up the 1% because everyone is after our $100 a month raise, it now cost us an additional $25 a month for the same thing we got last year. So we either pay the additional or do without. The lower the grade the greater the drop in Standards of Living.

Better than nothing, but still less than an adjustment to cover increases in other areas. The phrase "...wouldn't mean much extra cash..." doesn't apply because with other increases, it just means slightly less of a loss. 

Based on quantity -- it's not much, but it's the thought that counts.  In this economy, with the tremendous debt we have, and continually spending more than we take in, any increase in pay should be appreciated.

I work in local (County) government and we are not increasing pay (and have not since 2008). 

Context. If inflation is greater than the amount they are adjusting, then the net effect is a loss. A .5% increase for some people (depending on their tax bracket) is a .3% increase after taxes. If inflation is 3%, then the net gain is -2.7%. 

A freeze equals a net loss equal to the amount of inflation. There's a good chance we're going to see inflationary pressure rise over the next three years - which equals a bigger loss. Watch the value of the dollar. 

Of course, if unemployment rises over the next three years, having a job at all may be better for some. 


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