Biden Directs 2.7% Federal Pay Raise in 2022

MYTH: The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which the Bureau of Labor Statistics (BLS) uses to calculate cost-of-living adjustments (COLAs), does not consider the cost of gas, housing and medical care. REALITY: The BLS divides several hundred items into eight groups to calculate the CPI-W. Within these groups, the prices of gas, housing and medical care are all considered. Households included in the CPI-W meet two requirements: More than half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks out of the previous 12 months. NARFE contends that this population is not appropriate for determining seniors’ spending, while the Consumer Price Index for the Elderly (CPI-E) would provide the most accurate calculation. NARFE supports replacing the CPI-W with the CPI-E for the calculation of COLAs.

the merit system in addition to appeals review. Leavitt concurred, agreeing that a new study on the topic would be relevant and adding that the agency’s employees have been developing a new research agenda to present to incoming board members. As of press time, the committee had yet to schedule a vote on the nominees.

—BY SETH ICKES, GRASSROOTS ASSISTANT

President Joseph R. Biden Jr. submitted his alternative pay plan to Congress in August, which contained a 2.7 percent average pay increase for federal employees for calendar year 2022. The raise consists of a 2.2 percent across-the-board increase with a 0.5 percent average increase to locality pay rates.

NARFE National President Ken Thomas issued a media release commending the decision, stating that the proposed raise demonstrates “respect for hard-working civil servants and the jobs they do, as well as a commitment to recruitment and retention of talented federal employees.” Thomas also noted that Biden answered NARFE’s call earlier this year to “increase locality pay rates by 0.5 percent on average, ensuring that the average pay increase is on par with recent private-sector wage growth.”

Over the summer, the House Appropriations Committee advanced its annual spending bills without any language outlining a federal employee pay raise for calendar year 2022, effectively deferring the final decision on the raise to the president. In recent times, such as this year and last year, Congress has sometimes abdicated its responsibility on the pay increase. But in 2018 and 2019, Congress included pay raises in its annual spending bills.

The 2.7 percent average raise is based on the annual change in private-sector pay as measured by the Bureau of Labor Statistics’ Employment Cost Index prior to the development of the president’s budget request. In October 2020, the Federal Salary Council, which analyzes federal pay in comparison to wages in the private sector and recommends changes to federal pay rates, found that private-sector rates outpaced federal rates for similar jobs by 23.11 percent. Pay raises are integral to the government staying competitive with the private sector in attracting and retaining a skilled workforce, and NARFE commends President Biden for seeking parity with average pay increases in the private sector.

The proposed raise also seeks parity with the likely 2.7 percent pay raise for military personnel, which is included in the fiscal year 2022 National Defense Authorization Act. Importantly, having the federal pay increase match the military raise is a return to form; while the 2021 federal raise did not achieve parity with the military increase, the 2020 and 2019 raises did. Moving into the future, NARFE encourages Congress and the White House to ensure federal pay raises achieve parity with those of the private sector and the military. Improved pay and benefits help preserve the government’s ability to recruit and retain top talent.

The pay raise process for calendar year 2022 is not yet complete. Toward the end of the year, the president must sign an executive order to make the proposal official.