When attempting to predict the 2019 pay raise for Federal Employees, there are three significant determinants: the President, Congress, and a formula detailed in the Federal Employees Pay Comparability Act (FEPCA) of 1990. The legislation from 28 years ago offered guidelines for closing the compensation gap between government and private-sector jobs, but the Federal Government’s budget has never allocated sufficient funding to actually adhere to FEPCA’s suggestions. Congress ultimately chooses to initiate a federal salary increase via appropriation bills, but in recent history has let the President decide. Should that be the case for 2019, there are two likely possibilities: either the Trump Administration enforces a pay freeze as indicated in February’s executive budget proposal, or the President will follow suit from last year and instill a raise that’s less than Congress’ recommendation. 2018 saw a 1.9% increase, .05% less than the suggested 2.4%. This year, the House of Representatives has remained quiet on the issue while the Senate Appropriations Committee approved of a 1.9% raise.

Historically, the biggest pay raise of the last 50 years was in 1972 when President Nixon chose to increase the federal pay scale by 10.9%. There has not been an annual raise of over 5% since the 9.1% escalation in 1980.

Until Next Time,

             **Written by Benjamin Derge, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.

Federal Pay Raise