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

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This topic contains 14 replies, has 11 voices, and was last updated by Avatar of Andrew Krzmarzick Andrew Krzmarzick 2 years, 6 months ago.

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  • #156608

    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:

  • #156636

    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…

  • #156634
    Avatar of Natalie Jennings
    Natalie Jennings
    Participant

    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?

  • #156632
    Avatar of David Coffin
    David Coffin
    Participant

    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.

  • #156630
    Avatar of Lisa Coates
    Lisa Coates
    Participant

    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?

  • #156628
    Avatar of Tony Camilli
    Tony Camilli
    Participant

    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

  • #156626
    Avatar of Sharon Murtha
    Sharon Murtha
    Participant

    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.

  • #156624
    Avatar of Katt Hancher
    Katt Hancher
    Participant

    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.

  • #156622

    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?

  • #156620

    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.

  • #156618

    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…

  • #156616
    Avatar of Scott Kearby
    Scott Kearby
    Participant

    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).

  • #156614
    Avatar of David Dejewski
    David Dejewski
    Participant

    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.

  • #156612
    Avatar of Steve
    Steve
    Participant

    It beats the pay cut a good number of us in local government have been getting for the past few years.

  • #156610

    Let’s call it what it is – a symbolic gesture to influence federal employees in a presidential election year!

    But I’ll take it and am appreciate of any effort to increase my salary…

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