President Biden sent a letter to congressional leaders mentioning his formal intention to provide civilian federal workers an average pay boost of 2% the following year. In comparison with prior pay increases of 5.2% in 2024 and 4.7% in 2023, Biden’s pay rise plan was originally unveiled in March of last year as part of his fiscal 2025 budget proposal. With Friday’s statement, it is certain that, if adopted, basic pay increases for federal employees will be 1.7% across the board and locale pay increases will average 0.3%. This is a small deviation from the custom of allocating 0.5% of the total raise amount for locality adjustments.
By the end of August each year, the president is required by the Federal Employees Pay Comparability Act to announce an alternative pay plan stating that a “economic emergency” prevents much bigger automatic increases in locality pay from occurring. Since the law’s enactment in 1990, the action has mostly been symbolic. After the previous two years’ rises broke decades-long records as the federal government attempted to keep up with inflation, Biden’s plan for a 2% average pay boost falls significantly short of both the expectations of federal employee unions.
OPM 2025 COLA Increase Date
The Democratic administration of President Joe Biden has announced plans to increase federal worker’s pay by 2% in 2025 as part of the COLA and here i will update you on OPM COLA Increase Date 2025 so check this post. It gives workers an average pay boost of 2%, however it falls short of several of his earlier goals.
The President had previously intended to maintain the hikes for civilian federal employees at the same rate as those for women and men in the military; however, because the latter are expected to increase to 3.5% by 2025, the government has fallen short of this goal.
Due to Congress’s lack of alternative pay raise proposals throughout the appropriations process, President Biden’s proposed 2.0 percent pay increase is expected to become official. President Biden’s executive order implementing the wage increase must be signed before it becomes effective, usually in late December.
What is the COLA for 2025?
The CPI-W, on which COLA is based, attempts to ascertain how rising inflation affects daily goods experienced by average Americans. This information is used by the Social Security Administration to calculate the COLA, which is projected to be 2.5% in 2025, in order to offset the cost of living and inflation. The COLA 2025 is therefore determined. Thus, if an American typically receives $2000 in Social Security Disability Benefits, for instance, the COLA will raise this to $2050, an increase of $50.
The COLA for 2025 is expected to be no more than three percent nor any less than 2.5 percent. It is announcing in October 2024 and go into effect on January 1, 2025, as per SCL. Federal employees received raises of 5.2 percent in 2024, 4.6 percent in 2023, and 2.7 percent in 2022; this would be the lowest pay rise since President Biden assumed office. The 2% pay increase is certainly a big increase, but it’s less than what some may have hoped for.
Federal employees likely to see 2% pay raise in 2025
- In 2025, a two percent federal wage increase for civilian federal employees is now all but guaranteed. President made his plans for the pay increase for 2019 official. Biden has to sign an executive order implementing the 2025 hike before anything can be considered formally official. The smallest annual raise implemented under the Biden administration if approved. A 1.7 percent general increase and a 0.3 percent locality pay adjustment would comprise the 2 percent raise for the General Schedule.
- Inflation has been going down in the past few years and for the first time in 3 years, the consumer price index fell below 3% annually in July. The pay increase also falls somewhat short of what private sector employees have received. The average weekly wage for workers increased by 3.3% in July compared to the same month last year, as per BLS.
- Not as much as in last years, as inflation is starting to going down. At the end of 2022 and 2023, federal employees received wage increases of 4.6% and 5.2%, respectively. The most recent wage boost helped workers catch up, but the hike at the end of 2022 was not quite enough to adjust for inflation. Inflation rose 6.4% in 2022 over the previous year, but fell to 3.3% in 2023.
Why Federal Employees Should Care About a 2% Pay Increase
Despite its small increase, the 2.0% raise comes at a time when federal employees are still dealing with growing living expenses and workloads. Many workers were hoping for a more significant boost, especially in light of ongoing inflation and mounting financial pressure on American households.
However, the raise is in line with wage growth throughout the entire labor market. It’s important to note that this raise stands in sharp contrast to the 7.4% increase that Senator Brian Schatz (D-HI) and Representative Gerry Connolly (D-VA) proposed earlier this year as part of their Federal Adjustment of Income Rates (FAIR) Act. Their plan would have given civil servants’ purchasing power a stronger boost and more closely matched federal pay increases with those in the private sector.