Hello cruel world: You earn what you’re worth

Four trillion dollars. It’s a lot of money no matter how you look at it. Only a rich nation can break mankind’s spending records every year for years and years. In that $4 trillion the President is requesting from Congress for 2017, I’d like to ask: What should federal employees be paid?

If you ask them, a lot more than they’re getting now.

In that respect, they’re just like the rest of us; only the scale changes. The Alphabet board just handed Google’s CEO $199 million in stock. By one reckoning, the CEO of McDonald’s makes the equivalent of $9,247 per hour. The CEO of Starbucks — the McDonald’s of coffee — collects more than $20 million in salary and stock in a good year. Trust me, those guys aren’t ashamed of asking for more and more from their boards. They probably have $500 per hour compensation specialists work it out for them.

Federal employees on Jan. 1 received a 1 percent raise, putting  the average SES increase at a whopping, what, $1,700? $1,600?  After taxes that’s enough to buy a curved TV set.

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Now the American Federation of Government Employees is calling for a 5.3 percent raise, to “make up” for the past few years of stingy or no raises. But what does it mean to make up? A higher cost of living? Greater productivity? A windfall in tax revenues from a grateful public? A sense of fairness?

AFGE might be whistling into the wind, but good for them for calling it like they see it.

Pay, raises — they present perennially tough questions. Questions without definitive answers. What are you worth? Whatever you can bargain for. At least that’s true for most people in the private sector.

Federal employees, though, work in a unique situation that, for a long list of reasons, restricts them to pay bands based on their rank in the grade schedule. The result: Some people do better than they would in the private sector, some do much worse.

While federal employees can receive bonuses each year, their basic pay cannot somehow bust out, such that a great GS-14 program manager makes twice as much as a mediocre one. It’s not an ideal system. It doesn’t necessarily weed out the really poor performers nor properly reward the top ones. But no one has been able to devise a better or more dynamic one in more than 50 years. The effort is long overdue.

The issue of raises is equally perplexing. One school of thought says only merit and increased productivity should produce raises. I can see the point. If a company’s revenues don’t go up, but it’s costs do, it will eventually go bankrupt. Another school of thought says if the cost of living goes up, the organization is obligated to raise pay by an equal amount, lest people earn less and less in real terms. In reality, raises come for a variety of reasons. Sometimes only to buy peace and goodwill or to reward loyalty — perhaps not the best purely business reason, but not a bad motivation.

In the end, the big raises come from taking big risks. Stake your pay on a difficult project, start your own business, switch careers, jump to another company. Big risks by definition have a severe downside. You can lose everything.

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