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Pay gap widens, council says

Oct. 19, 2012 - 01:00PM   |  
By STEPHEN LOSEY   |   Comments
National Treasury Employees Union President Colleen Kelly said the reported increase in the private-public pay gap is another reason why the freeze in federal pay scales needs to end.
National Treasury Employees Union President Colleen Kelly said the reported increase in the private-public pay gap is another reason why the freeze in federal pay scales needs to end. (Staff file photo)

The pay advantage private-sector employees enjoy over their federal counterparts shot up to 34.6 percent this year, the Federal Salary Council said Friday — 8.3 percentage points higher than the 26.3 percent pay gap reported last year.

The National Treasury Employees Union and American Federation of Government Employees said that the explosion in the reported pay gap, based on data compiled by the Bureau of Labor Statistics, is largely due to the freeze in federal pay scales that has been in effect for the last two years. The pay freeze is scheduled to continue at least through next March, though it could go longer if Congress cannot agree on a budget.

“This is just one more example of why the pay freeze needs to come to [an] end in 2013, and NTEU will continue to work to that end when Congress reconvenes,” NTEU National President Colleen Kelley said.

In its official report, the council’s working group attributed the swing to a major change in its methodology. President Obama’s budget effectively canceled the National Compensation Survey — one of two survey models used by BLS to estimate the pay gap — and forced it to rely on only a model using Occupational Employment Statistics data.

The council said that last year, as BLS started to phase out NCS, about 40 percent of the increase in pay gaps was attributable to the reduced NCS sample. The rest of last year’s increase was due to the pay freeze, the adoption of a new methodology, and other factors.

The pay gap has become a controversial issue in recent years, and some critics say the estimates by the Federal Salary Council — a seven-member advisory panel that provides annual recommendations for setting locality pay — cannot represent reality. Some studies — prepared by the Congressional Budget Office, Heritage Foundation and Cato Institute — have concluded federal employees are actually greatly overcompensated when compared with the private sector.

Kelley and AFGE National President J. David Cox are two of the council’s members.

The council also decided to recommend creating new locality pay areas in 12 areas, including Albany, N.Y.; Albuquerque, N.M.; Austin, Texas; Charlotte, N.C.; Las Vegas; St. Louis; and Tucson.

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