President Obama last month decided to extend the two-year freeze on federal pay, at least until Congress passes a 2013 budget.
The decision to abandon the modest half-percent raise he proposed in February amounted to a choice between jobs and raises. Since Congress is expected to pass a six-month continuing resolution rather than a new budget, the cost of a raise would have had to be absorbed elsewhere in the budget.
This was the right move.
First, the raise was so small as to be inconsequential. Second, the term “pay freeze,” remains misleading. The great majority of federal employees have indeed received pay raises during the past two years, because step increases for time on the job and promotions were never factored into the freeze. All that was frozen were the pay tables.
Last year, roughly 750,000 federal workers — about half the GS force — received step increases, and thousands more got a bump in pay after being promoted.
Across-the-board pay freezes — or raises, for that matter — are more budget gimmickry than anything else. What the federal workforce needs is a new approach to compensation, one that rewards merit and advancement over longevity and endurance.
Most Americans can look forward to getting pay raises for moving up in their organizations, taking on more responsibility, or performing better than their peers. Comparatively few earn raises simply for staying on the job.
The rigid but often manipulated federal pay system is outdated, frustrating the best employees while rewarding mediocrity, and serving to overpay for low-skilled labor while failing to pay enough to attract and retain the most highly skilled employees. Whoever wins the election in November, the next administration must make it a priority to do a deep, objective study of federal pay comparability and competitiveness, and from that study, develop a new, flexible system for the 21st century.