How Does a Pay Freeze Affect You and Your Family?

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This topic contains 34 replies, has 27 voices, and was last updated by  Corey McCarren 5 years, 10 months ago.

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  • #151525

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


    How does a pay freeze affect you?


    I know there will be an impact on your job – potentially with morale and maybe even causing some folks nearing retirement to call it quits sooner than later and putting a greater load on your shoulders.


    But I’m also wondering what the practical and personal costs will be to your family as you can’t bank on a pay increase for the foreseeable future – things like paying down more debt (credit card, student loans, mortgages, etc.), coping with increases in the cost of gas and groceries and so much more…


    Background: The House will take a vote Wednesday on a bill sponsored by Rep. Sean P. Duffy (R-Wis.) that would freeze federal and congressional employee pay for an additional year. You can also respond anonymously on the Washington Post.

  • #151594

    Corey McCarren
    Participant

    I’m not a government worker, but I could only imagine what it’s like to have to worry about pay freezes all the time, especially with rising costs of living! As a recent graduate, my biggest concern would be things like student loans. I’m on plans where they rise with time as I theoretically advance in my career, and they’re a burden as is. I’d be interested to know the major concerns of feds regarding pay freezes as well. Is there any chance people would look into getting out of the public sector because of this?

  • #151592

    I am with Corey. I am not a govie, either, but I have student loans, a car payment and a mortgage that all need to be paid on time, no matter what. I would also like to know how it could affect the “sandwich” generation — those who are caring for elderly parents and sending their kids to college.

  • #151590

    Natalie Jennings
    Participant

    Good question Corey. I bet people leave the public sector often because of this – and they probably aren’t replaced in many cases, meaning more work for the workers who aren’t getting raises.

  • #151588

    Terrence Hill
    Participant

    I am a long-term govie, I have come to accept that we won’t be getting a pay raise any time soon. Even if we do, a .5% increase is hardly worth the aggravation of getting it through Congress. New employees can still get longevity (step) increases and promotions, so they at least have some hope. Long-term employees can only hope to make it to retirement before that is taken away as well. What’s important is to try to ignore the constant criticism and focus on trying to make a contribution.

  • #151586

    Peter Sperry
    Participant

    With 15 grades of 10 steps each and 4 SL levels, there is more than enough room to seek pay raises through superior performance leading to promotion regardless of what Congress does with the actual pay rates. As the boomer generation starts to retire in greater numbers, these opportunities will expand. At least they are freezing their own pay at the same time and cutting Congressional staff budgets as well. Many committee staff directors are spending this month trying to figure out how to avoid layoffs and asking senior staff to accept pay cuts in order to keep junior staff on board. We on the other hand are being asked to forego a 0.5 percent pay raise which, after taxes, would be almost enough to pay for coffee in the morning. Somehow, I think I’ll survive.

  • #151584

    From the couple of answers from Federal workers so far, the .5% is the equivalent of “meh!?” in physical terms.

    But what about the implications of Congress using government personnel as the scape goats for other bad decisions in spending. There’s got to be a psychological toll in terms of uncertainty and a perception of disrespect. Terry hints at that when he says, “I have come to accept that we won’t be getting a pay raise any time soon.” That sounds like a morale buster if the workforce as a whole feels that way.

  • #151582

    Denise
    Participant

    Pay Freeze – affects my family; my husband is older than I am, I am not ready to retire yet, but he has retired. Without an upgrade in my pay, this makes providing for my family and living a normal lifestyle difficult on my salary alone. Of course my husband has a side business, but since his retirement was not planned for this early in his life; lost his job and had to wait three years before he could receive retirement pay; this put a big dent in our budget. Now we are doing a lot of “catch-up” our business is growing, but it will be a while before we start to see any profits.

    I do believe that those who put this into action should also be made to abide the same rules of pay. It is real easy to make decisions about these types of situations, when you’re not directly involved.

    So I say, put your money where your mouth is; put up or shut up!

  • #151580

    Amber Gabranski
    Participant

    I have had pay freezes as well as pay cuts. I worked at a company once where we had to take Friday off for the entire summer and not get paid for it. It was tough, but we made it through it. I would much rather get a pay cut for a short time then know that my friend or myself may get laid off. I think sometimes we forget that we can live on “not so much”. We learned that we didn’t really need our expensive cable or dinners out. In fact, we found other things to do together like puzzles and games. I can’t say that I liked it, but for the better good of the company and my co-workers, we made do with what we had.

  • #151578

    Richard Jones
    Participant

    it is odd to me that the only proposed raise during this President’s term is suggested during an election year – our budgets have declined so much that this is probably the worst year of the last 3 to absorb an increase —

  • #151576

    Bill Hagel
    Participant

    Next time Congress freezes Federal Salaries – I think it would be a great gesture on their part if they reduced their salaries to the top of the GS pay scale. I’ll even give them locality pay (for their own districts of course). That means at least a $20,000 pay cut and up to a $45,000 pay cut for some. (GS-15/10 = 129,500 – 155,500)

    If they want to make a statement then MAKE A STATEMENT !!!

  • #151574

    Thomas Poli
    Participant

    I have some experience with this. I work for a county whose finances were taken over by a state oversight board because of poor fiscal management and because the current county executive refuses to raise taxes under any circumstances. One of the first actions of the state board was to freeze pay–no steps, no cost-of-living increases-even though they they were in our union contract-nothing. The impacts to workers range from inconvenience for dual-income families to disastrous in the cases of single-income families. It’s not the kind of thing that smacks you hard right away–it’s more a subtle undermining of personal finances. My children are not in college so I am not struggling as much as many of my co-workers, but it’s a hardship for everyone. Many of us are still recovering from a “lag pay” arrangement of little more than a year ago.We’re hoping for relief next year, but there is no assurance until the budget is satisfactorily under control.

  • #151572

    Randy Butler
    Participant

    I’ve been a govie for a little over 2 years now. I should get a step increase which equates to about a 3-5% increase in September (assuming step increases aren’t taken away). The only COLA raise I got was in my first year and didn’t mean much then, what i’m more concerned with is the ability for promotion which is where my big increase was last year. My supervisor who has been in his position for 20 years and has 40+ with the government is getting ready to retire though as a result of the all the “turmoil”, to seek greener pastures elsewhere and a double paycheck. All the scapegoating, restructuring and general “what’s going to happen?” definitely makes one think about looking elsewhere. Especially if young.

  • #151570

    marilyn gaines
    Participant

    I work for the state of Kentucky and have not had a raise in years! I would love to see federal government workers have to deal with the same things we have to deal with! We have to acknowledge pay increases for social security, ssi and private employers who have given their employees increasess, but we get none! We are supposed to have less than a 5% error rate, but given more work and less pay due to furlough days!

  • #151568

    Jon P. Bird
    Participant

    Perhaps you should reword the question to say: How would an extension of the current pay freeze affect you?

  • #151566

    duly noted…and changed!

  • #151564

    Denise – To be fair, Congress did take the hit right along with executive branch employees:

    http://www.govexec.com/pay-benefits/2012/02/houses-passes-bill-extending-pay-freeze-one-year/41071/

  • #151562

    Tracy Erickson
    Participant

    Unless our collective cost of living expenses are frozen as well more of the federal workforce will be put at risk. Federal employee standard of living is at biggest risk. Having to choose between making the house payment or being able to put gas in the car and buy groceries for example. These are the real life issues facing a group of people who have dedicated their work lives to public service. Most with the ideal that they could make a positive difference in the lives of the citizens they work to support. It honestly breaks my heart to think I have spent nearly 30 years believing in what I do and who I do it for. Just to be used as fodder. Publicly ridiculed as some try to turn those same people I swore an oath to serve against me. I will not however, let this situation change my personal values and integrity which are still as dedicated to serve the interests of the American people as ever.

  • #151560

    That’s actually a pretty decent “silver lining” – and when the freeze is over, if you can continue to live that way, you tend to be on a better path to building wealth, according to these guys.

  • #151558
  • #151556

    The real problem is that you’re not keeping up with inflation. If the rest of the world is moving and you’re not…I mean, it’s easy to see that you’re left behind, eh?

  • #151554

    You know…in somewhat that spirit, we started a Facebook group last year called “It’s Okay, Freeze My Pay” to express the sentiment that, while uncomfortable and unsettling, public servants rise above the political mess…and they deserve our respect.

    http://www.facebook.com/pages/Its-Okay-Freeze-My-Pay/167687933271802

  • #151552

    Raymond Clark
    Participant

    I’m a 6-year govie, but with a military retirement so I am not as affected as others. I agree with the pay freeze given we all have to do our part. However, I do wish they had exempted grades 6 and below (or watever the right grade would be) to lesson the impact on those families. Don’t know how hard that would be to implement, but it would have at least been perceived as more fair.

  • #151550

    Kanika Tolver
    Participant

    A pay freeze can easily affect entry level to mid level Federal government employees, because their salaries may not be at its full potential due lack of experience or lack of education. These employees may have families or may have financial obligations like student loans that may require them to need more money each year. Not to mention, the cost of living constantly increases each year and expenses like rent, food, gas, day care and clothing can be very costly.

    My husband and I, have good Federal government salaries, but we have decided to focus on saving more and living a more quality life over quantity. We really try to live within our means, because you never know when pay freezes or lay offs will occur. Just call us “safe spenders”. It would be great if the Federal government would have free seminars that could teach Federal government employees how to better manage their income even after the pay freeze has been lifted.

    Kanika Tolver
    Follow me on twitter at CareerDropout
  • #151548

    Amy L. Singer
    Participant

    How does the new TAX HIKE affect you, me, us – the American people. I served this country as a US Marine… I work for a publicly owned company serving the 911, public safety, and Homeland Security business – and I just got my paycheck for the last two weeks. The FEDERAL GOVERNMENT tax hike – And I won’t even go into what I think of EVERY POLITICIAN IN WASHINGTON – I now make $3600 less a year. Wow. I had my annual review yesterday – regardless of how well I do my job – I can open up my paycheck and learn that my income has been reduced almost $4K a year???? Because others can’t do THEIR jobs?

  • #151546

    Amy L. Singer
    Participant

    Well said.

  • #151543

    David Dejewski
    Participant

    I took a pretty significant pay cut to accept a federal job in the first place. I left federal employment at the top of the GS-15 scale with a few years of reserves, no debt, a number of useful investments, and a growing small business. On a personal level, a government pay freeze by itself doesn’t have much affect on me, but I started preparing years ago.

    A paycheck is becoming a less attractive source of income in general. It’s important to be compensated for time spent serving the public and others, but relying entirely on a W2 (earned income) or a government sponsored retirement is not ideal at this point in our history – particularly for the 46 and younger crowd (as the retirement age creeps up through 67 toward what many believe will be 72) . Pain associated with relying on a W2 will only increase as the tax burden increases – as indicated in a recent CBO report – and as inflation kicks in.

    Any pay increase that is not, at a minimum, indexed to inflation results in a net loss of income for the employee. The effect is compounded when the tax rate goes up. W2 employees will be bringing home less, but will be asked to do more.

    This latest pay freeze isn’t the beginning or the end of the story. David Walker, the former Head of the GAO and Comptroller General of the United States, spent a lot of time trying to educate folks through the Fiscal Wake-up Tour. About the same time, Congress enacted statute to ‘force’ the government to get smarter about its own investment activity – particularly around “business” or “office” technology investments – an area known to be expensive as a result of duplication of effort, lack of universal standards, and large “tail” expenses incurred by “interfaces” and after-the-fact security and interoperability concerns.

    They passed 10USC2222 (attached) and 10USC186. Both were title 10 statutes that went into full effect in October of 2005 and applied only to the Department of Defense. The Senate later proposed a bill to modify section 11317 of title 40 – which basically would take the original title 10 statute (10USC2222) and apply it to the rest of the government (See S.920).

    A pay freeze, in my opinion, should spark action from the Federal workforce to hunt aggressively for cost saving measures. Seemingly small corporate actions like publishing what we’re investing in, requiring standards during design, and conducting good due diligence (required by the statutory instruments I referenced above); enable individual action like building real business cases, checking to see if anyone else is doing what you want to do, picking up the phone to connect with peers in other agencies, and following up to ensure investment promises made are promises kept. These seemingly small personal actions, when added up across the government create a culture of cooperation and responsible fiscal conservatism that amount to huge savings down the road.

    Our fiscal boat has holes in it. We can either accept these pay freezes passively, or we can use them as a call to action – to do what we can to make ourselves and the government less dependent on public resources. Every individual action counts.

  • #151541

    Doniele Ayres
    Participant

    Andy, the psychological implications of extending the pay freeze are how I will be affected if the Senate passes and the President signs.

    I certainly agree that everyone has to do their fair share. Let’s think about how government is changing though, EO to promote efficient spending, pay freeze, no performance bonus because it was thought to be a ‘loophole’, and the reports in the media that feds make more than 15% of the average private sector employee.

    I like to think of my service as a federal employee the same way a vet serves their country. Of course I have a household budget much smaller than the federal government so I have to manage my money differently and that is the same expectation I have for my employer. But I don’t feel valued as an employee. My work is meaningful and important, I do my job because it makes me happy. The challenge will be how to keep me, and others like me, motivated when we are considered overpaid and thus undervalued.

    If it’s necessary extend the freeze but please remember I am a citizen and taxpayer as well!!

  • #151539

    Jerry Rhoads
    Participant

    Actually the 15% number is comparison between employees with High School diplomas in the public and private sectors. If you have a BS/BA degree, public and private are about equal. However if you have an advanced degree and you are in the government, you will make 23% less than your private sector counterparts. Check this link out, it is an article based on what I had heard on Fed News Radio.

    http://www.federalnewsradio.com/177/2729497/Federal-pay-debate-revolves-around-level-of-education

  • #151537

    Kenyatta Hawkins
    Participant

    I agree with Amber. While I have never experienced a pay freeze, I have experienced pay cuts. As she stated: it was tough, but I made it through it. I would much rather accept a pay cut for a short period of time than get laid off. It is a sacrifice. Companies are wrestling with the ramifications of the recession and taking tough actions; to still be employed full time is a blessing in itself.

    Despite all that is going on in our economy today, I look at USAJOBS.GOV regularly and see opportunity. I don’t believe a person is likely to leave the government workforce, nor do I believe that pay freezes are deterring qualified people from seeking government jobs. Without doubt, a pay freeze creates a downward snowball effect. Cost of living increases and retirement reductions affect us in a large way over time. Unfortunately, all we can do is alter our spending habits in the short term.

  • #151535

    Anita Arile
    Participant

    At my end of the Pacific..

    We’ve been through Furloughs (32hr workweek) and now we’re on Increment/Promotional freezes with a different administration… with a looming Lay-Off slowly drifting closer… UGH!!!

    At the same time, utilities and fuel prices are almost doubling!! How are we going to survive???

  • #151533

    Julie Chase
    Participant

    Down in our little ‘burg, my son graduated from college last spring and since he worked for Uncle Sam as a STEP for two years, he thought “perhaps” there would be something waiting for him after graduation. NO there wasn’t. Hiring freeze. And even though the MARADMIN “lifted” it a little, the eastern seaboard installations still can’t hire as they are over budget for 2013. So we are stuck. My DH is retiring at the end of this month. One of the few dinosaurs left (CSRS). I’ve 12 more years to go….But wait, what’s that….ANOTHER BRAC!!! NO, SAY IT AIN’T SO……TWO, TWO BRAC’S!! You’ve got to be kidding me!! But I’ve danced to this song before, that is why I am here, now I have to listen and worry to that ‘ol song again???

    My DH and I are paying off his student loan month by month. Not taking the “deferment”, don’t want interest to pile on. Meantime, he is filling out applications for Lowe’s, Home Depot, grocery stores, etc….. so much for those 2 degrees and Uncle Sam wanting college grads, another pie crust promise. We are blessed he has a home to go to. Families around here are sticking together. Boomerang kids are the norm. My DH is taking care of the health insurance through his retirement, so it doesn’t come out of my paltry frozen paycheck. My son does not have health insurance.

    Credit card is gone, 2 car payments are gone….the mortgage is still there, the taxes, the electric bill, and yes, filling up your tank in NC will bankrupt you. This is so ridiculas.

    I use coupons, buy what is on sale. If it means eating Cheerios every week because every store in the county has Cheerios on sale and add a coupon to that and viola…at least we have breakfast.

  • #151531

    Sometimes I belive that freezing federal pay and threatening to make the federal workplace less secure and desirable is a roundabout way to decrease the size of the workforce. There are more appropriate and effective ways to not only decrease the size of the federal workforce, but achieve the real goal of increasing efficiency and effectiveness. I think the current attempts and successes with pay freezes are misguided and will backfire, if implemented.

    The .05% will help, but what helps even more is the message the current administration is sending. Despite the meager amount (much less than the cost of living increase that was given to social security, etc.) the message that’s being sent is that the current administration appreciates us, believes in us, and will fight for us. It’s not about the money. It’s about maintaining the federal government as a competitive best place to work. The current administration realizes just how important the federal workforce is in contributing to a better nation and more competitive country in the global economy.

    ~ Ebony

    Ebony Scurry, PHR, GCDF-I

  • #151529

    Stephen Peteritas
    Participant

    Here’s a breakdown of why this pay freeze could be different from those in the past: https://www.govloop.com/forum/topics/proposed-pay-freezes-go-even-further-than-before

  • #151527

    Allison Primack
    Participant

    Here are some responses from GovLoop’s LinkedIn Page:

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