Federal Salaries Not Keeping Up with Private Sector, Report Shows

Press Release November 14, 2023

WASHINGTON – Federal employees on average earned 27.54 percent less than private sector workers in similar jobs this year, according to an analysis released today by the Federal Salary Council. 

The disparity has grown significantly in just one year, from 24.09 percent in 2022. 

“The alarming new pay gap proves what federal employees have been feeling all year: Their paychecks are not keeping up with inflation and monthly bills are increasingly harder to cover,” said NTEU National President Doreen Greenwald. “It is outrageous that our nation’s civil servants have lost ground in the fight for fair pay, and it makes our push for an adequate raise in 2024 all the more urgent.” 

President Biden is recommending an average 5.2 percent raise for federal employees starting in January, made up of an average 4.7 percent across-the-board raise and an average 0.5 percent increase in locality pay. NTEU has endorsed legislation for an average 8.7 percent pay bump in 2024, which would include an across-the-board increase of 4.7 percent, plus an average 4 percent for locality pay. The 4.7 percent across-the-board raise is called for under the Federal Employees Pay Comparability Act of 1990 and is based on the annual increase in the Employment Cost Index.   

“At a time when federal agencies are struggling to retain and attract talent, paying a competitive wage is even more important,” Greenwald said. “Every year the Federal Salary Council hears directly from local civic leaders across the country who plead for higher salaries so that federal employers in their areas can fill critically important vacancies. An across-the-board raise plus increases in locality pay will help agencies keep and hire the skilled employees they need to deliver vital services to the American people.” 

The 27.54 percent pay gap accounts for the locality pay adjustments federal employees receive in certain areas of the country with a higher cost of living and higher overall wages. The Federal Employee Pay Comparability Act (FEPCA) was passed in 1990 specifically to narrow that gap, but it’s never been fully implemented.   

“Many frontline federal employees live paycheck to paycheck providing for their families and saving for a secure retirement, and a fair pay raise in 2024 is absolutely essential for them to keep up with rising costs,” Greenwald said. “Since 85 percent of the federal workforce lives outside of the Washington D.C. region, a federal pay raise will have an immediate impact on the economic security of federal employees in every state and community across the country.” 

Greenwald also supported the Federal Salary Council’s recommendation Tuesday that in the future, the federal government seek across-the-board pay increases equal to the full Employment Cost Index, plus locality pay increases of at least 0.5 percent or 1.0 percent. Together, the changes would help reduce the pay disparities at a faster rate.  

The Federal Salary Council determines the pay gap using U.S. Department of Labor data that compares the salaries of public and private sector jobs with similar duties. The Office of Personnel Management provided the salary information to the council in its meeting Tuesday.   

NTEU represents employees in 35 federal agencies and offices.