Cheryl Ward replied to the topic SOUND OFF: Your Thoughts on the Federal Discretionary & Pay Freeze? in the forum Miscellaneous 9 years ago
This freeze will cut govt costs for PC&B for 2011 Since there would normally have been a COLA for 2012, costs will be less than planned for the second year too. Then in 2013, when there should be a COLA, the level of pay to which that percentage increase will be applied will be significantly lower than if we had received COLAs in 2011 and 2012. So the cost avoidance will continue into the future.
From an employee perspective, a salary increase (whether COLA, within grade increase, QSI, etc.) is the ‘gift that keeps on giving’…. a one-time cash award is a nice thing to receive, but a pay increase compounds year after year. In this case, freezing pay means that an employee who works 10 years with no freeze will always receive more money than an employee of the same grade/step level who works 10 years but has a pay freeze for two of those years. Though only a two-year freeze, the effects of that freeze will last unto perpetuity.
Hope this helps to explain how they calculate a $60B savings in 10 years…
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