Obama Asking Government Workers To Sacrifice But Evidence Shows American Workers Already Have

Last Updated Sep 2, 2009 6:06 AM EDT

President Obama is invoking emergency powers granted to the Executive Branch after 9/11 to arbitrarily reduce the planned Cost of Living Adjustment (COLA) for Federal Government employees. The current plan was to provide a 2.4 percent increase to their base salaries. This is on top of any increases they are due to promotions or step increases. Most U.S. salaried workers do not receive COLA but do normally get an increase each year based on merit.

President Bush also did this several times during his two administrations. Normally the increase is preplanned. The U.S. military also gets an annual increase to their base pay and in the past many different Presidents have tried to give more to the military then the overall raise to civilian workers. As Bush found out and Obama probably will too is that Congress will over rule the recommendation and provide the full increase. Congress also in the past has enforce "pay parity" where the raise for all Federal employees military and civil.

Congress mostly does this because the unions representing the civil workforce advocate it. The unions means votes and campaign donations and help. The unions feel that all Federal workers are due the same raise no matter what they do or contribute.

The Conference Board released today its report titled U.S. Salary Increase Budgets for 2010. The Conference Board is a global, independent business-membership and research association working in the public interest. The report indicates that U.S. companies in 2010 plan to have a budget of three percent. Normally this is a percentage of current payroll. This is the lowest amount that the Board has forecast in the twenty-five years it has been doing this report. In 2009 the medians of "all employee categories except executive, from 3.50 percent to 2.50 percent. But it was the executive category that took the biggest hit â€" down 2 full percentage points (from 3.50 percent to 1.50 percent)."

While this looks like a larger figure then that planned for the Federal workforce it is a percentage of salary available for increases. To give a person a raise higher then three percent somebody would have to get one lower. The total must balance out to three percent. Most companies reward their high performing workers with a bigger increase. The Federal employees will get 2.4 percent no matter what their salary or performance.

The Federal workforce also gets locality pay. This is an adjustment to the base salary to make up for an areas cost-of-loving and wage structure. A worker in New York, NY gets a larger base salary then one in Butte, Montana. Even if it is a low cost area like Huntsville, AL but that has a large amount of professionals with good salaries the Federal salaries will be higher. Obama has not addressed the increase in that money with this plan. That will have to come later.

On top of all this the Federal and State workforce has not declined over the last several months but actually grown. While the U.S. employment rate has increased to almost ten percent a further 110,000 people have been hired at all levels of government. There are now more employees making more money then ever before. This is contributing to the problems States and the Federal Government are facing with deficits and spending. Obama did at least cite the deficit as one of the reasons he plans to try and reduce the planned increase next year.

The U.S. is currently on a unsustainable growth path for government. Obama has borrowed almost two trillion dollars this year. His budgets over the next ten years project out to a nine trillion increase in the deficit. Today personnel and their costs are one of the largest parts of the budget. Growth in the number of workers and their benefits and pay will only increase this spending. If not there will have to be cuts to other parts of the budget. That is if the decision is not made to raise taxes and revenue.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.