The announcement cancels a planned 1.4% across the board pay hike for federal workers in 2011, which itself would have been the smallest in a decade. According to the White House, the freeze will save $2 billion for the remainder of this fiscal year, $28 billion through 2015, and more than $60 billion over the next 10 years.
While the freeze does not affect the ability for federal civilian workers to get promoted, thus moving up the federal pay scale and getting a raise that way, it will do away with annual cost-of-living raises for the next two years. "The hard truth is that getting this deficit under control is going to require some broad sacrifice and that sacrifice must be shared by employees of the federal government," President Obama said in a White House news conference. "I did not reach this decision lightly."
The freeze comes at a time when the government is pushing to attract new talent in key information technology jobs, including cybersecurity and IT acquisition. The knowledge that new jobs will come without the expected cost-of-living raise for the first year could pose a new challenge.
However, in a conference call with reporters before the president's announcement, federal chief performance officer Jeff Zients rebutted any suggestion that the pay freeze will dissuade top IT talent from working in government. "We do need to continue to recruit the best and brightest to the federal government, and I care about that deeply," he said. "I'm confident we have an overall value proposition that's quite strong and that this effort will not get in the way of our efforts to get the best and brightest."
Republican Congressional leaders have been calling for a pay freeze for months, amid reports over the last year showing that many government workers make more than their private sector colleagues and that raises far outstrip those in the private sector. USA Today, for example, found earlier this year that, in general, the federal government pays 20% more than private companies for "comparable occupations." Another study, by conservative think tank the Cato Institute found that average federal salaries have risen 58% since 2000, compared with 30% in the private sector.
The disparity in pay is true in IT as well. An InformationWeek salary survey earlier this year of 20,492 IT pros (931 of whom worked in federal government) showed that, on average, government IT workers earn about 10% more than their private sector colleagues. The survey found that federal IT managers earn an average of $121,000 a year, as opposed to $110,000 in all industries surveyed, and that federal IT staffers earn $94,000 a year in the government, as opposed to $85,000 overall.
A USA Today report in March based on 2008 government data confirmed that finding, discovering that federal employees earn more than private sector workers in most job categories, including computer and information systems managers.
Zients said that the administration may also consider reductions in the federal workforce as part of the 2012 budget process, though it's unclear how that would square with other efforts to decrease the federal government's reliance on IT contractors. "Clearly, agencies are going to have to do more with less," he said. "No specific decision on reductions in workforce have been made."