Monday, November 29, 2010

Barack Obama Proposes Two-Year Pay Freeze For Civilian Federal Employees; Will Alaska Follow Suit And Deny Governor Sean Parnell A 40 Percent Pay Raise?

Even if someone with whom I strongly disagree with politically does the right thing, I still believe in giving them credit. And on November 29th, 2010, President Barack Obama, who up until now I have considered essentially useless, has indeed done the right thing by announcing a proposal to implement a two-year wage freeze for civilian Federal employees. Media sources include the Anchorage Daily News and ABC News and CNNMoney and the Washington Post. Read the official White House announcement HERE.

The two-year freeze would apply to all civilian Federal employees, including those working at the Department of Defense, but would not affect military personnel. It would not affect bonuses or step increases for Federal employees. The White House claims it will save $2 billion for the remainder of FY 2011, $28 billion over the next five years, and more than $60 billion over the next 10 years.

Before the pay freeze can be implemented, Congress must approve it. The likelihood of Congressional approval seems promising; some Congressional leaders have already expressed support. Congress voted in April 2010 to freeze their pay, with the House and Senate opting to forgo an automatic $1,600 annual cost-of-living increase. House members and senators now are paid $174,000 a year; their last pay increase was $4,700 a year at beginning of 2009.

However, a couple of unions are already bitching about it. AFL-CIO president Richard Trumka complained that it undermines the jobs we already have instead of investing in creation of new jobs, while John Gage, president of the American Federation of Government Employees (AFGE), called the decision "a slap at working people" and claims that the White House is using Federal workers as scapegoats for the nation's deficit problems.

The debate over Federal pay vs. private sector equivalent pay has re-surfaced once again. A commenter to the ADN story claimed that Federal employees are underpaid vs. the private sector, noting that a Federal IT employee making $60,000 per year could earn a six-figure salary in the private sector. However, a USA Today survey published March 8th, 2010 indicated that Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations. Overall, Federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

Even if Federal pay was less, the difference is made up by increased job security and guaranteed step increases. It is difficult enough to fire a Federal employee period; it's almost impossible if the Federal employee is a member of a "protected" class. Federal employees trade windfall compensation for increased job security.

The nest question is, will Alaska follow Obama's example? Recently, the Alaska State Officers Compensation Commission released a proposal to grant a 40 percent pay raise to the governor and a 35 percent raise to the lieutenant governor. The justifications offered in the full proposal are to raise the governor's salary above those of his commissioners, and to make the governor's salary more competitive with those in other states. The first justification is O.K.; the second justification unacceptable. If we're going to ask Federal employees to accept a pay freeze, we should ask state employees to also accept a freeze. At the very least, raise the governor's salary only to $150,000 instead of $175,000. Those of us who live in Anchorage should also express support for Mayor Dan Sullivan's call for a wage freeze for city employees.

Update December 1st: Since this post was published, KFQD conservative talk show host Dan Fagan has addressed this issue on The Alaska Standard. Fagan thinks Obama's proposal is a sham, because the only freeze in his purview is a freeze on cost-of-living adjustments; most Federal employees will still receive seniority-based pay increases over the next two years, and no one’s Federal benefits will be affected. Fagan also doesn't believe the Democratic-controlled lame-duck Congress will follow through, because so many Democrats have been bought and paid for by unions. Nevertheless, the idea itself is a promising start, and we should let lawmakers know that they need to approve it -- and consider going further.


  1. It seems that gov't workers are just the whipping boys/girls of the deficit hawks?

    And Peterike -- our regulatory agencies are all ready cut to the bone-- but maybe your game is population control through the deaths that come from unregulated food, toys, factories, drugs and the like.

  2. Federal government employees brought much of it upon themselves. How about TSA and their abuses? How about some of these other bureaucrats who are so inflexible about enforcement? And how about the assistant prosecutor Brenda Morris, who railroaded Ted Stevens by refusing to turn over all the evidence?

    Federal employees can afford to give up pay raises for a couple of years. Call it an atonement as well as a sacrifice.