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One Percent Federal Pay Raise Welcome, but Still Lags Behind Private Sector

FOR IMMEDIATE RELEASE   Contact: Jessica Klement
 February 24, 2014 703-838-7760
  jklement@narfe.org

Alexandria, VA – In response to the news that President Obama’s FY15 Budget to Congress will include a 1 percent pay raise for federal employees, Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association (NARFE), released the following statement:

“Today’s announcement by the President brings bittersweet news for federal workers. While the proposed one percent raise builds on the one percent raise provided this year, the figure is half of what private-sector wages rose in the last year. Although we are thankful the three-year pay freeze has ended, now that our country is back on a stronger economic footing, it is time to start closing the growing gap between public- and private-sector wages. The effects of the past three years of financial hardship have left their mark on federal workers, to the extent that half the federal workforce is exploring other career options. Any good employer knows you need competitive wages to retain the best and the brightest. Therefore, NARFE urges Congress to appropriate a raise that would allow the government to be competitive in the hiring process and keep pace with the private sector.”

The Employment Cost Index (ECI), on which the annual raise is usually based, was 1.9 percent for the 12-month period ending September 2013. (The ECI measures the increase in employment costs in the private sector.) While federal employees were provided a 1 percent pay raise this year, the ECI rose 1.8 percent in the previous year. According to the Federal Salary Council, the pay gap between private- and public-sector employees is now 35 percent. Due to the pay freeze alone, federal workers have sacrificed $98 billion for deficit reduction. Over the last four years, the cost of goods and services has increased by 7 percent, and the wages and salaries of private-sector workers have increased by 6.5 percent, according to the Bureau of Labor Statistics.

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The National Active and Retired Federal Employees Association (NARFE), one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/retiree organization, NARFE represents the retirement interests of nearly five million current and future federal annuitants, spouses and survivors