Federal Employee Salaries Not Keeping Pace with Private Sector

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WASHINGTON - Federal employees on average earned 24.72 percent less this year than workers in similar private sector jobs, according to a report by the Federal Salary Council released today.

The pay gap is an important data point in the debate over federal salaries and clearly shows the government needs higher wages to compete with the private sector for the skilled staff necessary to serve the American people.

"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 NTEU National President Doreen Greenwald, who is a member of the Federal Salary Council. "NTEU continues to support ongoing efforts to narrow the gap, make the federal government a more competitive employer and help federal employees across the country deal with rising costs."

Although the current pay gap remains sizable, there was improvement from 2023, when federal salaries were 27.54 percent behind, on average. The gap narrowed in large part to the average 5.2 percent raise that federal employees received in 2024, the highest in 43 years.

"We call on Congress and the White House to make sure federal salaries don't lose ground in 2025," Greenwald said.

The 24.72 percent pay gap accounts for the locality pay adjustments federal employees receive in certain areas of the country with a higher cost of living and higher overall wages. The Federal Employee Pay Comparability Act (FEPCA) was passed in 1990 specifically to narrow that gap, but it's never been fully implemented.

About 85 percent of all federal employees live outside of the Washington D.C. metro area, which means federal pay raises have a positive economic impact in every state and community across the country.

The Federal Salary Council determines the pay gap using U.S. Department of Labor data that compares the salaries of public and private sector jobs with similar duties. The Office of Personnel Management provided the salary information to the council in its meeting Monday.

NTEU represents employees in 36 federal agencies and offices.