The U.S. Office of Personnel Management, housed in the Theodore Roosevelt Building, has become the center of attention once again. President Joe Biden has announced a planned pay raise for federal civilian employees in 2025. A rather meager increase of 2% sparks concerns about its potential insufficiency, given the current economic climate and the projections for future inflation.
The Biden administration seems to have displayed a degree of financial myopia, proposing a blanket pay raise of 1.7% for all federal employees. The decision appears to lack real consideration for the nuances of cost of living fluctuations across the country. The plan also includes locality-based pay increases, which will average a mere 0.3%.
The crushing reality of inflation and cost of living may render these pay increases nearly meaningless. The future of inflation remains uncertain, although the forecast is not entirely sunny. A 2% pay raise might not be substantial enough to meet the increasing financial needs of hardworking Americans, especially those serving in federal positions.
As a cautionary tale, let’s take a look at the inflation rate from July 2024. The U.S. year-over-year inflation was recorded at 2.9%, higher than the proposed average pay raise for federal employees. Despite Biden’s round-the-clock claims, inflation has not seen a consistent decline, but rather, a steady upward climb in recent years.
The updated figure from the consumer price index in July marked the first time in three long years that the annual inflation rate fell below 3%. While this might seem like a cause for celebration, the proposed pay raise percentages for federal workers are still lagging behind, clearly demonstrating the administration’s lack of foresight.
Taking a comparative view, the promulgated pay raise stands far shorter than what private sector employees have been receiving. A report by the Bureau of Labor Statistics shows that the average weekly wage for workers scaled up by 3.3% as of July. This stark inequality between the public and private sectors deepens the divide, once again testing the credibility of Biden’s leadership.
Biden’s weak attempt to justify the meager pay hikes by citing fiscal responsibility falls short of being convincing. He has suggested that the chosen pay rates would effectively balance the appeal of federal work and fiscal constraints. Yet, the percentage does not seem to live up to the expectations of federal employees struggling with mounting expenses.
His pronouncement on attracting, recruiting, and retaining a skilled workforce echoed emptiness amidst rising economic tension. This so-called ‘alternative pay plan decision’ seems more like an attempt to placate rather than truly compensate well-deserving federal employees. It appears as though ‘fiscal constraints’ somehow have become more important than competent labor.
The proposed pay hikes are set to roll out at the start of 2025. These increases, though seemingly paltry, would likely consume a significant portion of the federal budget with an impact that appears potentially disproportionate in relation to the benefits.
The 2025 pay raises seem particularly disappointing when compared to the increases of previous years. Despite inflation mellowing out, surprisingly, the raises aren’t going to be nearly as high as they used to be. It shows that fiscal management under Biden’s administration is more about optic than strategy.
Let’s look back at 2022. Federal employees received a somewhat satisfying 4.6% pay raise towards the end of the year, an increase that in hindsight, fell short given the surge in inflation. By offering a higher pay increase in the past, Biden has further underscored the inadequacy of the current proposals.
The following year, federal employees were appeased with a 5.2% raise at the end of 2023. While this helped them somewhat keep pace with the rising cost of essentials, it’s becoming clearer that the government’s approach is reactive rather than being strategic and proactive.
In 2022, the year-over-year inflation skyrocketed to 6.4%. Throughout 2023, it only managed to drop to 3.3%. While the Biden administration continues with the false narrative of managed inflation, the reality shows a different story – one of struggling federal employees, insufficient pay hikes, and a laughing stock of an economic policy.
Biden’s Farcical 2% Pay Increase Highlights Financial Myopia appeared first on Real News Now.
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