The 100 Year Federal Pay MISTAKE

Hinzugefügt: 2026-06-01

[00:00:00]The way federal workers are paid has roughly been the same for about 100 years. Nobody is happy with it.

[00:00:07]Lawmakers want to change it for different reasons.

[00:00:11]Will that happen? Will we see a change and what would that mean?

[00:00:15]Now, we're looking at the GS pay scale, 15 GS grades, 10 steps for each grade.

[00:00:22]About 70% of the entire federal workforce, they are in the GS pay system.

[00:00:28]Democratic lawmakers, they don't like it because they don't believe federal workers are getting paid enough. And this is evident when you look at an engineer or an IT worker, the government can rarely compete with the private sector.

[00:00:44]Republican lawmakers, they don't like it either because they think it divorces pay from performance. So, you can have a poor performer that's getting paid steadily and they'll keep getting their step increases, that's automatic. So, they'll keep getting paid more and in the past it was very difficult to get rid of a poor performer. You would have to initiate a performance improvement plan and then ultimately a lot of times people ended up just getting transferred out. So, they don't like that. Another Another part of it they don't like is the government pays more than the private sector if you have a high school diploma or less, a GED, let's say. So, an admin assistant, nothing against administrative assistants, but an admin assistant can earn $90,000 a year in the government. They can earn that as a GS-9 in a major city.

[00:01:30]What other Where can you find a $90,000 a year salary for an admin assistant in the private sector?

[00:01:39]A lot of those jobs pay minimum wage or $15, $20 an hour. Also, the labor costs are often misunderstood. How much do we spend when it comes to the payroll of the federal workforce? Do you have an idea?

[00:01:51]What is the percent of all of our spending that goes to payroll?

[00:01:55]It's less than 5%. It's like 4.8%.

[00:02:00]So, if you increase that number by 1%, you could probably close the gap. Now, to be fair, when I talk about spending money on payroll, I'm not talking about the benefits. The benefits, like the federal pension, that's a big deal.

[00:02:14]Or matching TSP 5%, that's a big deal.

[00:02:19]Private sector doesn't have pensions.

[00:02:21]The private sector, not every job has a 401k. Most do, I would say 70%, but not every job.

[00:02:27]And then, the matching on average is about 4%. So, these are the reasons why we should be concerned with protecting the federal benefits. They act as an incentive to bring talent into the workforce.

[00:02:40]Now, the Federal Salary Council and the President's Pay Agent have consistently reported a massive gap between federal and private sector pay. According to these metrics, federal workers are paid on average 22 to 27% less than their private sector counterparts. But, once again, this doesn't consider the pension. This doesn't consider any of the benefits. They're just looking purely at salary.

[00:03:05]Also, for higher-level private sector jobs, you know, you have stock compensation or you're able to purchase stock at a reduced rate. So, obviously, you know, federal workers, they do not have that benefit. They do not have that privilege.

[00:03:20]There has been some success with federal agencies leaving the GS pay system.

[00:03:25]Now, I often talk to people that say, "Hey, why don't you talk about WG? Why don't you talk about WS? What about NH?

[00:03:32]How about GG?" All these pay bands.

[00:03:34]There's so many pay bands out there.

[00:03:36]But, you have some agencies like the FDIC or the SEC that have completely left the GS pay band system and they're able to pay more. They can pay more than a GS-15 step 10. They can pay over $200,000 a year.

[00:03:51]So, that is an indicator that clearly the GS pay system wasn't a one-size-fits-all approach. And what we're continuing to see with it is it's being chipped away at.

[00:04:04]So, instead of changing the entire thing, there have been efforts to change it at least three times within the last 40 years. But, instead of doing a comprehensive overhaul, they're doing this like little patches. They're like doing these little circumventions. Like, you can circumvent it, you can do this, you can do that. I want a SSR, special salary rate. Over at the DOD, you have the personnel demonstration projects, pay demos. And this is the way I believe that the government pay system will ultimately move to. So, what I envision is bands. Let's say four bands. The first band is entry, so GS 1 to GS 9.

[00:04:38]The second band would probably be something called professional, GS 11 to GS 13. And the third band would be expert, GS 14 to GS 15. This is somewhat what NH already does. If you follow the NH pay band, you would see that NH 2 combines GS 5 to GS 11. That gives more flexibility for the agency or the manager to pay you what you're worth based on your skill, based on the value that you produce for the organization. That unlocks that, so you're not just restricted to a tight rigid system where you have to wait 3 years to go from step 8 to step 9. I mean, that's kind of a outdated system. Another thing that a lot of people like about the NH system is that it it could give you or it could unlock the ability to earn larger performance bonuses.

[00:05:27]Depending on how, you know, how well you perform. But, that leads to another question. What if your supervisor isn't really recognizing your performance?

[00:05:34]That's an issue, right? All supervisors are human. All humans have biases. So, do they have a bias against you for some reason? Are you being evaluated fairly?

[00:05:46]That's a huge obstacle that a lot of people run into when it comes to getting their performance award, if they get a performance award. But when you have a band, you don't have to wait. Then you have like check this out. You have some jobs where they're only slotted in one GS grade.

[00:06:04]So there's no promotion potential. If you're an IT worker and you apply for a GS-11 that has no promotion potential, no matter how bang up of a job that you do, no matter how much money you save the organization, no matter what, you will never be anything above a GS-11 unless you apply on usajobs.gov for a GS-12. But in that position, there's no room for growth. When you have positions that do not have room for growth, you will have high turnover or you will have mediocre performance.

[00:06:39]You don't want that. So go and go into a band approach makes more sense.

[00:06:44]And we've already seen the government lean away, and this is this is a bipartisan thing. So this is Democrats and Republican lawmakers. We've seen them lean away from college degrees and certifications.

[00:06:57]And they're leaning towards skill-based.

[00:07:00]If you have the skills, we will pay you.

[00:07:03]You do not need to show us any type of paper. There's no gatekeeping.

[00:07:08]You have the skills, you can prove it through an assessment and through the interview, we're going to pay you. So that approach is being taken. That could link up with the with the band system. I think this is the only real way that the government can prevent brain drain and how we can compete with talent when it comes to the private sector. Now, is it going to happen this year, next year, the year after that? No, probably not. I would say we're we're going to keep seeing what we're seeing. So the SSRs, the special pay for IT, healthcare, artificial intelligence, you know, the positions that are highly desirable, we'll see more pay for that.

[00:07:42]We'll they'll have the recruitment incentive. They'll pay tens of thousands of dollars extra. They'll do everything that they can except change the system that is broken.

[00:07:51]But I I think, you know, really towards 2030 or maybe a little bit after 2030, we will see a new system that replaces the broken one, which is the GS pay system. That's the broken system. And we'll see something probably more along the lines of NH or what I like to call pay bands. Now, if one of the main things that draws you to a federal job is the pension. And for many people, that's the number one reason. It's not the salary. As we just talked about, a lot of the salaries can be low.

[00:08:21]But then you have the pension, right?

[00:08:22]So, if that is what is attracting you, you should know that there are other jobs aside from a federal job that will give you a pension. And in some cases, it could even be larger than the federal pension because the federal pension has really been whittled away over the years. When it was CSRS back in the in the mid '80s, that was a way better pension system.

[00:08:44]If you want to know the top five jobs that offer pensions today, if you're interested in that, I want you to check this video out next. Stay updated by signing up to the free newsletter down below. Thank you so much for watching and I'll see you in the next one.