The Schedule and the Paycheck

Every argument about federal pay runs into the same problem. There is no single federal pay number, and the two that matter most have moved in opposite directions for thirty years. The statutory schedule that the General Schedule and the Foreign Service share has lost about a sixth of its real value since 1994. What an officer at a fixed grade and step actually draws has gained slightly, because locality pay grew from nothing over the same period. Both statements are true, and which one gets quoted usually depends on what the speaker wants.

This chart holds one grade and step fixed across 33 years and deflates everything by the consumer price index, so the flat line marks purchasing power held. It draws both federal lines against two benchmarks: the formula Congress wrote into law for the annual adjustment, and the median earnings of full-time workers with a bachelor's degree or more, which is roughly the market the federal government recruits from. Average federal salary would not work here, because it rises as the workforce professionalizes, and that measures who is employed rather than what the job pays.

I ran the budget and workforce planning for public diplomacy at State, which is where I learned that the choice of benchmark decides a pay argument before the analysis starts. What surprised me here was the timing. Real pay rose about 17% through 2010 while locality pay was being built up, and it has given back roughly 10 points since, through the three-year freeze and the inflation of the last few years. That leaves locality pay carrying the load, and locality pay is the component that can be frozen. Officers serving overseas do not receive it at all; they receive Overseas Comparability Pay instead, which reaches only FS-01 through FS-09 and currently runs on an extension that expires on 20 December 2026.