Federal Employees Get Pay Boost After Biden Executive Order

President Joe Biden Federal employees are eligible for a raise inflationary You should not be under any pressure labor Bureaucracy suffers from shortages.

According to executive order It will go into effect January 1, and federal employees will get an overall raise of 4.1% as well an average locality-based increase of 0.5%. This means that roughly 2.1 million federal employees will see average raises of 4.6%. Biden announced The raise was made four months ago in a letter sent to Nancy Pelosi (D-CA), House speaker, and Kamala Harris Vice President. The latter cited problems with recruitment and retention.

“Multiple years of lower pay raises for Federal civilian employees than called for under regular law have resulted in a substantial pay gap for Federal employees compared to the private sector,” Biden said. “This alternative pay plan decision will allow the Federal Government to better compete in the labor market to attract and retain a well‑qualified Federal workforce.”

The increase is below the 7.1% annual inflation rate recorded last month. The real average hourly earnings which take into consideration the inflation impact, fell 1.9% as of last month. data Source: Bureau of Labor Statistics. A 1.1% decrease in the average workweek would indicate a 3% overall decline in real wages.

According to a, approximately $215 billion was spent by the federal government in 2016 to compensate federal civilian employees. report From the Congressional Budget Office. Periodic wage increases are usually granted to federal employees based on factors like performance, longevity and changes in the private sector.

Presidents who wish to raise federal salaries are permitted under federal law Submit a plan to Congress by September 1, the previous year. When considering any wage rises, the commander in chief must take into account “pertinent economic measures” Such as inflation and economic output.

As of June, private sector employers had regained all the jobs they lost in the lockdown-induced recession, while government employers only regained slightly over half of those jobs. report Axios. Despite windfall tax revenue that was generated last year after robust economic growth, the shortages in government workers continue.

Both public and private employers expressed concern about a labor shortage, which has exacerbated inflation by raising pay to attract workers. This is because labor force participation has declined over the past two year, which has led to an increase in inflation. decades-long trend Low engagement in the job marketplace. According to a report by the National Employment Law Center, this metric fell from 63.4% to 60.2% between February 2020 and April 2020 due to government lockdowns. data Source: Bureau of Labor Statistics. The November 2022 labor force participation rose to 62.1%

Jerome Powell is the Federal Reserve Chair said That the workforce “participation gap” It is the result of “excess retirements” This was not the end. “what would have been expected from population aging alone,” Even though young people are largely back in work, “In the labor market, demand for workers far exceeds the supply of available workers,” he commented while discussing the central bank’s recent efforts to roll back monetary stimulus. “Thus, another condition we are looking for is the restoration of balance between supply and demand in the labor market.”