Federal Employees Made 25% Less Than Private Sector Counterparts in 2024
Federal employees were paid about 25 percent less than their private sector counterparts in fiscal year (FY) 2024. But the gap between public and private sector pay is shrinking slightly.
That data comes from a new report from the Federal Salary Council, which found that the wage gap stood at 24.7 percent in 2024, down from 27.5 percent in 2023, and down from the more than 30 percent gap we saw from 2015 to 2018.
The National Treasury Employees Union (NTEU) attributed the slight decline in the gap to the 5.2 percent average pay raise federal employees received in 2024, the largest increase in more than four decades.
Still, union leaders such as NTEU National President Doreen Greenwald say pay needs to rise to keep the federal government a competitive employer.
“It is a loss to our country when highly qualified professionals turn away from critical public service jobs because the paychecks can’t keep up with for-profit corporations,” said Greenwald in a statement. “We call on Congress and the White House to make sure federal salaries don’t lose ground in 2025.”
The Federal Salary Council, which is made up of presidentially appointed human resources experts and public union representatives, determines the pay gap using U.S. Department of Labor data that compares the salaries of public and private sector jobs with similar duties.
Prospects for 2025
There are concerns the gap could widen again in 2025, as President Biden has proposed a two percent average raise for federal employees. Congress has remained silent on the issue, indicating that lawmakers are not opposed to the two percent average number.
Military members are on track for a 4.5 percent pay bump, breaking a longstanding tradition of civilian-military pay raise parity.
Locality Pay Recommendations
The Federal Salary Council also published recommendations on locality pay areas for 2025.
New areas recommended for locality pay:
· Syracuse-Auburn, NY
· Kennewick-Richland-Walla Walla, WA
Both areas had a pay disparity exceeding the rest of the U.S. by more than ten percentage points on average over the three-year period between March 2022 and March 2024.
The council also repeated its suggestion to add Wyandot County, OH, to the Columbus locality pay area and Yuma County, AZ, to the Phoenix area.
Those recommendations are expected to be reviewed by the President’s Pay Agent in the coming months.