2023 pay ceiling: More gloom, less room at the top

Back in the day, before the elite Senior Executive Service was created, folks in Grades 16, 17 and 18 were known as “supergraders.” The peak of the career civil service. They got better pay, better/more interesting jobs, etc. That’s the norm most places, especially in the private sector. In government, thanks to political limits on congressional pay, not so much! Members of the House and Senate like to tell voters they are going without pay...

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Back in the day, before the elite Senior Executive Service was created, folks in Grades 16, 17 and 18 were known as “supergraders.” The peak of the career civil service. They got better pay, better/more interesting jobs, etc. That’s the norm most places, especially in the private sector. In government, thanks to political limits on congressional pay, not so much! Members of the House and Senate like to tell voters they are going without pay raises, which is easier to live with when — like many lawmakers — they are already millionaires.

But in the real world, as often happens, reality is different! And a growing number of higher grade feds, through no fault of their own, move up into the frozen pay world each year. How come?

Thanks to artificial but very real executive pay limits, imposed for political reasons, a substantial number of top-level career feds won’t get a pay raise in 2023. Nor will political appointees at or above the not-so-magic mark. Some of the career/political people at the GS 15 and above level haven’t had a raise in years. That’s despite the fact that employees under them are assuming the 4.6% raise proposed by the White House. And everybody, regardless of job, family size or GS status, is dealing with double-digit inflation. Between March 2021 and last month inflation rose 8.5%. That’s the biggest jump in 40 years. In most cases the pay freeze kicks in for anyone making $176,800. While that is a ton of money for many Americans — in and outside of government — it isn’t much when compared to the jobs they have, the programs they run and the responsibility (sometimes life and death) they have, five days a week. In January of this year most federal workers got a 2.7% pay raise. But those at the $176,300 level didn’t get anything. Some top feds in some high-cost cities haven’t had a raise in years. This year the pay cap was reached at Grade 15, step 7 in the metro Washington-Baltimore area. In San Jose-San Francisco, the pay limit begins at step 4 of GS 15. In metro New York City, it is step 6. In January, unless the pay cap is lifted, workers in dozens of other cities will bump up against the ceiling and get little or no raise. In San Antonio, a major federal center, the top GS pay is $172,278. Very, very close to the artificial ceiling, when pay will be frozen. So how does this work in real life? This is what one innocent ‘victim’ of the artificial pay cap told us:

I am a GS 15, Grade 7 who has now reached top of pay scale at $178,181, eligible-to-retire age (68) and years (23 federal service); sound TSP and other investments, little to no debt, except an affordable mortgage, kids educated and fully taking care of themselves. As I understand I would not receive any pay raise that might be available to federal workers in 2023 or beyond because of the salary cap (unless this is raised). What do federal employees in this category do? Continue working and investing in TSP without any additional pay raises, retire and seek to become a contractor, retire and do nothing, or a combination? What a position to be in.” V.M.

Tricky. We also heard from an IRS employee and member of the Federal Managers Association on the West Coast who aspires to an executive level job. But as he points out, there isn’t much of an incentive (from a salary standpoint) to take it:

“I’m capped at the GS 15 level. I’ve spoken to senior managers about the problem. Basically, all we are doing is repairing a flat tire but not putting any air in it. Senior managers I’ve spoken to basically agree all we’re doing is repairing a flat tire, but not putting any air into the tire. Pretty soon the car/organization won’t be running at all. GS 15 has a decent salary but it’s not keeping up with cost of living. Many people at that level are not interested in moving up, and that hurts the whole organization. For lots of jobs, highly skilled tech positions, it is more difficult to hire and retain people. We haven’t done anything and while it can’t be cured overnight, we can make sure that everybody gets the full 2023 pay raise to at least keep things where they are. If executive pay can’t go up, there is less incentive to be an executive.”

To see where the the pay ceiling is in your home town, vs. other places, check out OPM’s website.

Nearly Useless Factoid

By David Thornton

A 2017 study found that 59% of Americans eat chocolate bunnies ears first.

Source: Mens Journal

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May 16, 2022 Close Change YTD*
L Income 22.5591 -0.01 -3.32%
L 2025 11.3643 -0.012 -6.04%
L 2030 39.0951 -0.0654 -8.58%
L 2035 11.6340 -0.0218 -9.48%
L 2040 43.6438 -0.0906 -10.33%
L 2045 11.8580 -0.0268 -11.10%
L 2050 25.7895 -0.0632 -11.80%
L 2055 12.4530 -0.0395 -13.56%
L 2060 12.4521 -0.0395 -13.56%
L 2065 12.4510 -0.0395 -13.57%
G Fund 16.8661 0.0041 0.65%
F Fund 18.9392 0.0395 -9.33%
C Fund 60.8333 -0.2375 -12.91%
S Fund 63.5527 -0.8005 -18.83%
I Fund 33.5600 0.0563 -12.73%
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