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Politics, unions, and a federal employee pay raise in 2015

Pay raise for federal employees in 2015
Pay raise for federal employees in 2015Photo by Mark Wilson/Getty Images

On Monday afternoon, February 24th, the Obama administration revealed it will recommend an across-the-board pay increase of 1% for federal employees beginning in 2015.

Not surprisingly, the largest federal employee union is unhappy and called the raise "pitiful." On the other hand, Democratic Senator Barbara Mikulski, who may have been expected to protest such a small raise, expressed her happiness with the administration's actions.

Federal employee pay is essentially determined through the political process with Congress and the President both having a say in the amount of any pay raise granted in a given year.

The union's ire at the small pay raise may be due in part to their enthusiastic political support of Barack Obama in presidential elections and at their apparent inability to wring a larger proposed pay raise from the administration despite this support. But, with the number of Americans no longer looking for work (and not considered in computing the unemployment rate) now above 92 million people and the unemployment rate still at 6.6%, the number of people on food stamps and disability going up rapidly and the nation's economic growth rate still below what would normally be expected after a recession, the small proposed raise for federal employees is not unexpected.

Perhaps reflecting her allegiance and confirming her credentials as a good team player for the party, Senator Mikulski said in her press release that "I'm pleased that President Obama has proposed a COLA for federal employees in 2015. This modest COLA would go a long way in further recognizing the value of federal employees and help bring to a close years of pay freezes."

So, mark up a big score for party solidarity and supporting the president despite knowing the 300,000 federal employees and retirees in the State of Maryland would be very unhappy with the president's action.

Much of the reason for the dissatisfaction of federal employees is because of a pay freeze that lasted for several years. While the average federal employee salary still went up due to promotions and what are essentially periodic seniority increases--neither of which was under the pay freeze--many federal workers did not had a pay raise for several years.

The pay freeze was lifted for 2014 with an across-the-board pay raise of 1%. Employees in high cost areas, which normally receive a higher pay raise than other federal employees, were not happy with the across-the-board 1% pay raise as their raise was smaller than what they had been used to in previous years prior to the pay freeze. (The pay rates for all locality pay areas and for all federal pay grades are available with this calculator for federal employee pay.)

In all likelihood, the actual amount of the pay raise for 2015, and whether there will be additional increases for federal employees in the higher paying locality pay areas, will probably not be known until very late in the year. The amount of the 2014 pay raise was not finalized until December of 2013. The 2015 raise, if any, will likely not be finalized until late in the Fall as well.