The 2009 Federal Pay Spread

The pay raise that white collar federal workers will get next month could be the biggest increase they will see for years, if the economy continues to tank and the recovery is slow.

The pay raises, which vary from city-to-city based on local private sector wage conditions, will be effective with the first pay period beginning on or after January 1. The basic pay raise approved by Congress and the White House was 3.9 percent. Raises for workers under various forms of performance pay will vary.

Here are what the increases will be, factoring in locality pay adjustments, for most feds in selected cities:

Washington-Baltimore will once again get the biggest raise. It will be 4.78 percent. Feds in San Francisco-Oakland will get 4.31 percent, San Diego 4.11 percent, Sacramento 4.00 percent, New York City 4.2 percent, Los Angeles 3.93 percent, Indianapolis 3.55 percent, Huntsville, Ala. 4.01 percent, Richmond, Va. 3.52 percent, Boston 4.13 percent, Buffalo 3.81 percent, Chicago 3.99 percent, Cincinnati 3.35 percent, Dallas 3.95 percent, Houston 3.62 percent, and Denver 3.75 percent. For the complete city-by-city pay tables, click here.

Unlike raises for federal retirees, which are based on the nationwide cost of living index, federal pay raises are determined by a complex formula designed to close the pay “gap” between federal and private sector pay for similar jobs in the same cities.

The Bureau of Labor Statistics makes the private sector salary surveys on a city-by-city basis. Given the state of the economy, nonfeds who still have jobs aren’t getting very big raises. Some are taking pay cuts.

The highest paid feds in the U.S. are in the San Francisco-Oakland-San Jose area. Feds in Houston metro, New York City and half a dozen other areas make more than their same-grade, same-step colleagues in the Washington area. DC based civil servants (which includes people in chunks of Maryland, Virginia and a portion of West Virginia) make more than their counterparts in Richmond, Va., Las Vegas, Salt Lake City, Louisville and other cities whose locality pay area is called RUS. That stands for Rest of U.S.

This year, 2008, the general federal increase was 2.9 percent, but after locality pay adjustments were made, the biggest increase (4.49 percent) went to Washington-Baltimore area workers. The total increase for San Francisco area workers was 4.23 percent. New York City’s raise was 3.61 percent this year.

Impact On Pensions

Although many workers don’t realize it, locality pay is used to determine an individual’s retirement annuity. The annuity is based on the employees length of service and his/her highest three year average salary. Many feds think the high-3 formula includes only base pay (the salary before the locality add-on). That’s one reason roughly a dozen areas, with sizable federal populations, petitioned this year to get out of RUS and into their own locality area. All of them were turned down but it’s likely all of them will be back next year.

Because of the locality pay factor, feds retiring from a job in San Francisco, Washington or New York, will get a bigger annuity than if they had spent the last three years of their career in Norfolk, Va., or Louisville, Ky.

Nearly Useless Factoid

A full 18 percent of HDTV owners can’t tell the difference between regular and High Definition TV, according to a survey from Leichtman Research Group. That doesn’t stop me from wanting one, Santa.

To reach me: mcausey@federalnewsradio.com

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