4 ms·

5.2% pay raise proposal for federal employees in 2024

34 points by darth_avocado 4y ago

cs702 4y ago
[Please ignore this comment. It is WRONG. I wrote it in haste without thinking it through, and without looking up data.] ORIGINAL COMMENT: IIRC, the federal government employs around 24 million people. Private employers everywhere in the US will have to follow along to remain competitive, so this is going to result in a 5.2% annual rate of increase in income for employees nationwide (give or take) through the end of next year. Companies will likely try to pass this to customers in the form of price increases. To me, this suggests inflation is nowhere near under control.
- dpkirchner 4y ago
  They say this will affect about 2.1 million employees, FWIW.
- toomuchtodo 4y ago
  Can you provide evidence labor is driving broad inflation? Supply chains are normalizing post COVID, energy costs are coming down, egg inflation was avian flu killing tens of millions of birds, and housing is lack of supply. There is also some evidence corporations are juicing profits under the guise of inflation.
  - nostrademons 4y ago
    What does that mean? Persistent, broad-based inflation is usually a feedback loop where high prices both force employees to ask for raises to afford the cost of living and give employers the free cash flow to afford those raises, and then those raises mean there is more disposable income that can be captured by higher prices. It's "driven" by high labor prices in the same sense that the chicken came first. (And in almost all cases, just like the egg comes first, the price increases come before the wage increases.). But that's immaterial - it matters that we're seeing these wage increases and so there's a high chance that we're in a wage/price spiral already.
    - toomuchtodo 4y ago
      Inflation can be driven into a wage price spiral, but there isn’t sufficient evidence currently that such a spiral is occurring. https://crsreports.congress.gov/product/pdf/IN/IN12075 https://crsreports.congress.gov/product/pdf/IN/IN12075 https://www.imf.org/en/Blogs/Articles/2022/10/05/wage-price-spiral-risks-appear-contained-despite-high-inflation https://www.imf.org/en/Blogs/Articles/2022/10/05/wage-price-... u/jonathankoren‘s sibling comment also touches on this https://news.ycombinator.com/item?id=35077763 https://news.ycombinator.com/item?id=35077763
    - jonathankoren 4y ago
      Yes this is a cause of inflation, but not the cause of inflation today. Today, much of the inflation is cost-push instead of demand-pull like you described. Cars became expensive, not because suddenly everyone had money to go buy a car, or suddenly those peaky autoworkers caught a raise, but because the parts to make the cars didn’t exist because of supply chain problems brought on because of Covid lockdowns. Eggs are expensive because chickens are dying of avian flu, not because undocumented laborers getting an extra nickel. Same with oil, grain, pretty much everything.
    - majormajor 4y ago
      Employees asking for raises results in basically nothing unless the employee has leverage so broad-based raises are a sign of a market that wants to hire more labor than is readily available (of course, this is what led to a lot of that aforementioned housing inflation, but it wasn't as tight across as many industries as it is now). Major cost of living components like housing have been going up rapidly for tens of millions of people in major metro areas for a decade. Employees wanted more money the whole damn time. They didn't get much willing movement there; they didn't have the leverage in the employment market. Legislatures in many areas stepped in instead after failing to see wages in most industries keep up. It's not clear to me that this particular version of the feedback loop is inherently bad long-term or unstable. Why should I assume it's going to spiral out of control rather than eventually slowly grind to a new equilibrium as some employers can't keep up with market wages and fall out of the market and supply vs demand stabilizes? And government wages seem like the least relevant - government pay was uncompetitive in so many areas to start with.
- mempko 4y ago
  If labor drove inflation then we wouldn't be seeing record profits. Prices increase when owners of business decide and usually whatever they think they can get away with.
- pavon 4y ago
  I don't see this spiraling. It affects less than 1% of the population, and government jobs tend to pay lower than equivalent private sector jobs so this is more about the government trying to remain competitive. The private sector won't need to do anything to compensate.
- jonathankoren 4y ago
  Since when has the federal government been known to pay competitive to the private sector? This sounds more like well worn ideological talking points, than a real concern.
- woodruffw 4y ago
  The federal government employs about 10% that number. You'd have to add all the state governments together, plus the federal government, to get around 24 million[1]. [1]: https://www.statista.com/statistics/204535/number-of-governmental-employees-in-the-us/ https://www.statista.com/statistics/204535/number-of-governm...
- stonogo 4y ago
  The GS pay scale is phenomenally lower than private sector equivalent jobs in every single metro area, to the degree that the US government has geo-based pay supplements which still don't bring those jobs into equity. People like federal jobs because of the stability and the benefits, but there is no way in hell that federal salaries are driving inflation.
- gtop3 4y ago
  You can look up the GS payscale here [0], and a high level description of each level here [1]. I've crunched the numbers many times, and the private sector pays better. There's some situations and professions where it's close, but they generally require unusual circumstances. Perhaps the most interesting part is looking at how to leverage benefits. CSPR has several situations in which you can collect a full inflation adjusted annuity at fifty years old[2], which changes the math for a comparable twenty or thirty year career in the private sector. Raising the federal pay rate by 5.2% won't make federal employment competitive with private. Maybe it will change the balance for local and state government employment. [0] https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule https://www.opm.gov/policy-data-oversight/pay-leave/salaries... [1] https://gogovernment.org/all-about-government-jobs/pay-and-the-general-schedule/ https://gogovernment.org/all-about-government-jobs/pay-and-t... [2] https://www.opm.gov/retirement-center/csrs-information/eligibility/ https://www.opm.gov/retirement-center/csrs-information/eligi...
- theGnuMe 4y ago
  I doubt it. Most companies don't give cost of living raises that high. People will have to switch jobs to create enough pressure.
torstenvl 4y ago
Note: this is for federal civilian employees only (~2.85 million but the article says 2.1 million) not military members (~2.13 million). The article mentions military members once, but that annual pay raise is part of a separate piece of legislation. (The discrepancy between 2.85 total federal civilian employees and 2.1 million affected employees listed in the article is likely due to the fact that a minority but significant proportion of federal civilian employees are not on the GS pay scale.)
metadat 4y ago
JS-free archive link: https://archive.today/vwYTF https://archive.today/vwYTF
obblekk 4y ago
2021: 1% 2022: 2.7% 2023: 4.6% 2024: 5.2% Federal employees pay seems to lag inflation by 1-2yrs (ex benefits, retirement). I think some people worry about government unfairly outcompeting private sector businesses for employees, but these pay increases don't seem to be the mechanism by which that happens.
- woodruffw 4y ago
  Is that a common worry? At least in my niche, the highest GS salary band doesn't come close to normal annual compensations (and comes with many additional requirements, such as a PhD or other indication of exceptional worth). The people I know who find government (both state and federal) employment attractive do so because it offers a better work-life balance and, for state employees, the possibility of a pension. That or they're attracted to a specific agency or department's mission, which is not something that private groups can always compete with at all (e.g. when they reflect a regulatory role).
  - dataflow 4y ago
    > The people I know who find government (both state and federal) employment attractive do so because it offers a better work-life balance and, for state employees, the possibility of a pension. Student loan forgiveness is another one.
    - woodruffw 4y ago
      Thanks, I wasn't aware of that[1]. Still, I wonder if that's a major draw: federal employment numbers have been roughly stagnant for decades, and have declined on a per capita basis. [1]: https://studentaid.gov/pslf/ https://studentaid.gov/pslf/
      - dataflow 4y ago
        The government only needs so many employees, and automation has gradually replaced some jobs (I imagine in USPS, IRS, etc.), so I'm not sure I can draw any conclusions from that. I'd be curious on the stats too, yeah.
nunez 4y ago
That's really great but not even close to enough. GS-15 for tech jobs tops out at $145k all-in, and you need to have a PhD in some levels to get there. This is analogous to a principal engineer in scope. Meanwhile, they can turn around at clear $500k if they know their stuff at a place that doesn't require clearances and has good free food and stuff.
- scarface74 4y ago
  Out of the 2.7 million developers. Most don’t work for BigTech and a “senior developer” in corp dev is not the same as a senior developer in government
- lolsowrong 4y ago
  When I was a GS15, my box 1 on my W2 was nearly $240k. It’s still not $500k, but it’s not as low as you’re claiming. Yes, the GS table maxes out at ~150k, but they are also allowed to do locality (in DC that was ~34k), and some agencies are allowed to have a recurring bonus to more closely match external pay.
  - sigzero 4y ago
    It depends on locality as well. Currently a GS-15 step 10 in the DC maxes out at 183500.
  - nunez 4y ago
    didn't know that. thank you for the extra details!
- pwinnski 4y ago
  An extremely limited number of principal developers can clear $500k and get free food and stuff, but that is not the norm. Hacker News distorts common understanding, apparently. No survey I've ever seen suggests that is in any way the norm. Glassdoor suggests[0] that GS-15 comp is mostly in line with norms, especially based on the another commenter pointing out that your suggestion of $145k max is incorrect. 0. https://www.glassdoor.com/Salaries/principal-developer-salary-SRCH_KO0,19.htm https://www.glassdoor.com/Salaries/principal-developer-salar...
okokwhatever 4y ago
So, their salary is being reduced. Change my mind.
- 6nf 4y ago
  Yup, official inflation is 6.4% in the USA and 'effective' / real inflation is probably even higher

34 points by darth_avocado 4y ago

[Please ignore this comment. It is WRONG. I wrote it in haste without thinking it through, and without looking up data.] ORIGINAL COMMENT: IIRC, the federal government employs around 24 million people. Private employers everywhere in the US will have to follow along to remain competitive, so this is going to result in a 5.2% annual rate of increase in income for employees nationwide (give or take) through the end of next year. Companies will likely try to pass this to customers in the form of price increases. To me, this suggests inflation is nowhere near under control.

dpkirchner 4y ago
They say this will affect about 2.1 million employees, FWIW.
toomuchtodo 4y ago
Can you provide evidence labor is driving broad inflation? Supply chains are normalizing post COVID, energy costs are coming down, egg inflation was avian flu killing tens of millions of birds, and housing is lack of supply. There is also some evidence corporations are juicing profits under the guise of inflation.
- nostrademons 4y ago
  What does that mean? Persistent, broad-based inflation is usually a feedback loop where high prices both force employees to ask for raises to afford the cost of living and give employers the free cash flow to afford those raises, and then those raises mean there is more disposable income that can be captured by higher prices. It's "driven" by high labor prices in the same sense that the chicken came first. (And in almost all cases, just like the egg comes first, the price increases come before the wage increases.). But that's immaterial - it matters that we're seeing these wage increases and so there's a high chance that we're in a wage/price spiral already.
  - toomuchtodo 4y ago
    Inflation can be driven into a wage price spiral, but there isn’t sufficient evidence currently that such a spiral is occurring. https://crsreports.congress.gov/product/pdf/IN/IN12075 https://crsreports.congress.gov/product/pdf/IN/IN12075 https://www.imf.org/en/Blogs/Articles/2022/10/05/wage-price-spiral-risks-appear-contained-despite-high-inflation https://www.imf.org/en/Blogs/Articles/2022/10/05/wage-price-... u/jonathankoren‘s sibling comment also touches on this https://news.ycombinator.com/item?id=35077763 https://news.ycombinator.com/item?id=35077763
  - jonathankoren 4y ago
    Yes this is a cause of inflation, but not the cause of inflation today. Today, much of the inflation is cost-push instead of demand-pull like you described. Cars became expensive, not because suddenly everyone had money to go buy a car, or suddenly those peaky autoworkers caught a raise, but because the parts to make the cars didn’t exist because of supply chain problems brought on because of Covid lockdowns. Eggs are expensive because chickens are dying of avian flu, not because undocumented laborers getting an extra nickel. Same with oil, grain, pretty much everything.
  - majormajor 4y ago
    Employees asking for raises results in basically nothing unless the employee has leverage so broad-based raises are a sign of a market that wants to hire more labor than is readily available (of course, this is what led to a lot of that aforementioned housing inflation, but it wasn't as tight across as many industries as it is now). Major cost of living components like housing have been going up rapidly for tens of millions of people in major metro areas for a decade. Employees wanted more money the whole damn time. They didn't get much willing movement there; they didn't have the leverage in the employment market. Legislatures in many areas stepped in instead after failing to see wages in most industries keep up. It's not clear to me that this particular version of the feedback loop is inherently bad long-term or unstable. Why should I assume it's going to spiral out of control rather than eventually slowly grind to a new equilibrium as some employers can't keep up with market wages and fall out of the market and supply vs demand stabilizes? And government wages seem like the least relevant - government pay was uncompetitive in so many areas to start with.
mempko 4y ago
If labor drove inflation then we wouldn't be seeing record profits. Prices increase when owners of business decide and usually whatever they think they can get away with.
pavon 4y ago
I don't see this spiraling. It affects less than 1% of the population, and government jobs tend to pay lower than equivalent private sector jobs so this is more about the government trying to remain competitive. The private sector won't need to do anything to compensate.
jonathankoren 4y ago
Since when has the federal government been known to pay competitive to the private sector? This sounds more like well worn ideological talking points, than a real concern.
woodruffw 4y ago
The federal government employs about 10% that number. You'd have to add all the state governments together, plus the federal government, to get around 24 million[1]. [1]: https://www.statista.com/statistics/204535/number-of-governmental-employees-in-the-us/ https://www.statista.com/statistics/204535/number-of-governm...
stonogo 4y ago
The GS pay scale is phenomenally lower than private sector equivalent jobs in every single metro area, to the degree that the US government has geo-based pay supplements which still don't bring those jobs into equity. People like federal jobs because of the stability and the benefits, but there is no way in hell that federal salaries are driving inflation.
gtop3 4y ago
You can look up the GS payscale here [0], and a high level description of each level here [1]. I've crunched the numbers many times, and the private sector pays better. There's some situations and professions where it's close, but they generally require unusual circumstances. Perhaps the most interesting part is looking at how to leverage benefits. CSPR has several situations in which you can collect a full inflation adjusted annuity at fifty years old[2], which changes the math for a comparable twenty or thirty year career in the private sector. Raising the federal pay rate by 5.2% won't make federal employment competitive with private. Maybe it will change the balance for local and state government employment. [0] https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule https://www.opm.gov/policy-data-oversight/pay-leave/salaries... [1] https://gogovernment.org/all-about-government-jobs/pay-and-the-general-schedule/ https://gogovernment.org/all-about-government-jobs/pay-and-t... [2] https://www.opm.gov/retirement-center/csrs-information/eligibility/ https://www.opm.gov/retirement-center/csrs-information/eligi...
theGnuMe 4y ago
I doubt it. Most companies don't give cost of living raises that high. People will have to switch jobs to create enough pressure.

torstenvl 4y ago

Note: this is for federal civilian employees only (~2.85 million but the article says 2.1 million) not military members (~2.13 million). The article mentions military members once, but that annual pay raise is part of a separate piece of legislation. (The discrepancy between 2.85 total federal civilian employees and 2.1 million affected employees listed in the article is likely due to the fact that a minority but significant proportion of federal civilian employees are not on the GS pay scale.)

metadat 4y ago

JS-free archive link: https://archive.today/vwYTF https://archive.today/vwYTF

obblekk 4y ago

2021: 1% 2022: 2.7% 2023: 4.6% 2024: 5.2% Federal employees pay seems to lag inflation by 1-2yrs (ex benefits, retirement). I think some people worry about government unfairly outcompeting private sector businesses for employees, but these pay increases don't seem to be the mechanism by which that happens.

woodruffw 4y ago
Is that a common worry? At least in my niche, the highest GS salary band doesn't come close to normal annual compensations (and comes with many additional requirements, such as a PhD or other indication of exceptional worth). The people I know who find government (both state and federal) employment attractive do so because it offers a better work-life balance and, for state employees, the possibility of a pension. That or they're attracted to a specific agency or department's mission, which is not something that private groups can always compete with at all (e.g. when they reflect a regulatory role).
- dataflow 4y ago
  > The people I know who find government (both state and federal) employment attractive do so because it offers a better work-life balance and, for state employees, the possibility of a pension. Student loan forgiveness is another one.
  - woodruffw 4y ago
    Thanks, I wasn't aware of that[1]. Still, I wonder if that's a major draw: federal employment numbers have been roughly stagnant for decades, and have declined on a per capita basis. [1]: https://studentaid.gov/pslf/ https://studentaid.gov/pslf/
    - dataflow 4y ago
      The government only needs so many employees, and automation has gradually replaced some jobs (I imagine in USPS, IRS, etc.), so I'm not sure I can draw any conclusions from that. I'd be curious on the stats too, yeah.

nunez 4y ago

That's really great but not even close to enough. GS-15 for tech jobs tops out at $145k all-in, and you need to have a PhD in some levels to get there. This is analogous to a principal engineer in scope. Meanwhile, they can turn around at clear $500k if they know their stuff at a place that doesn't require clearances and has good free food and stuff.

scarface74 4y ago
Out of the 2.7 million developers. Most don’t work for BigTech and a “senior developer” in corp dev is not the same as a senior developer in government
lolsowrong 4y ago
When I was a GS15, my box 1 on my W2 was nearly $240k. It’s still not $500k, but it’s not as low as you’re claiming. Yes, the GS table maxes out at ~150k, but they are also allowed to do locality (in DC that was ~34k), and some agencies are allowed to have a recurring bonus to more closely match external pay.
- sigzero 4y ago
  It depends on locality as well. Currently a GS-15 step 10 in the DC maxes out at 183500.
- nunez 4y ago
  didn't know that. thank you for the extra details!
pwinnski 4y ago
An extremely limited number of principal developers can clear $500k and get free food and stuff, but that is not the norm. Hacker News distorts common understanding, apparently. No survey I've ever seen suggests that is in any way the norm. Glassdoor suggests[0] that GS-15 comp is mostly in line with norms, especially based on the another commenter pointing out that your suggestion of $145k max is incorrect. 0. https://www.glassdoor.com/Salaries/principal-developer-salary-SRCH_KO0,19.htm https://www.glassdoor.com/Salaries/principal-developer-salar...

okokwhatever 4y ago

So, their salary is being reduced. Change my mind.

6nf 4y ago
Yup, official inflation is 6.4% in the USA and 'effective' / real inflation is probably even higher