The Foreign Service Journal, October 2011

B y the time this article is published, members of America’s ForeignService serving overseaswill have either received the largest salary cut since the creation of the modern Foreign Service, or they will have been spared that calamity for another year. Preventing such a pay cut, and enact- ing legislation to prevent annual efforts to enact it, has been the primary focus of AFSA’s legislative activities. Contrary to current political legend, employees of the U.S. government are not overpaid. In general, the federal gov- ernment is a follower, rather than a leader, in establishing salary levels. Historically, the federal government has paid less than private employers for skilled employees. However, this is not necessarily the case for state andmunicipal governments. Some of thewrath currently directed at federal employee salaries stems from anger at the salaries of some local government employ- ees. When apples are compared to apples and oranges to oranges, skilled federal employees earn less than their private- sector counterparts pretty much across the board. Attracting Quality Candidates Past administrations, concerned more about the quality of federal services than about reducing a civilian payroll that is a small fraction of the total government debt, tried vari- ous ways to ensure that federal salaries would not drop so low that government careers would fail to attract quality can- didates. The most successful of these attempts was the Federal Employees Pay Comparability Act of 1990. FEPCA estab- lished comparability pay, also known as locality pay, tomain- tain comparability between federal and private-sector pay scales. Under the law (PL 101-509), federal salaries are adjust- ed annually according to the Department of Labor’s Employment Cost Index, which measures salaries paid by private-sector employers for various skills inmajor U.S. cities. The drafters of the legislation did not consider the relatively small number of civilian federal employees who serve overseas, and for various reasons they were not included under the law. That did not particularly matter when the salary adjustment was in the low single digits. It has grown, however, to 24 per- cent in Washington, D.C., 35 percent in San Francisco, and a minimum of 14 percent in cities not individually listed. Therefore, when FS members are assigned overseas, they receive 24 percent less than their counterparts inWashington and at least 14 percent less than Civil Service employees serv- ing in the least expensive American cities. Because most non- FS agencies employ temporary-dutymechanisms or otherwork- arounds for their employees overseas, the Foreign Service is the only significant non-Defense Department group in this situ- ation. Far-Reaching Implications The implications extend beyond current salaries. Because Thrift Savings Planmatching amounts and Social Security con- tributions are based on salary, employees who do not receive a salary adjustment will receive lower Social Security benefits and, usually, lower TSP matching contributions, resulting in reduced benefits down the road. The “high three” salaries used to determine pension amounts are affected, as well. Overseas Comparability Pay is intended to remedy that inequity. In 2009, a supplemental appropriations act autho- rized State to initiate an equivalent adjustment for FS mem- bers overseas, to be implemented in three tranches, two of which have been completed so far. The third was to be implement- ed in October 2011. This would have brought salaries for FS members overseas into parity with their colleagues in the U.S. Uncertain Future During the past year, OCP has been under attack; and despite AFSA’s best efforts, its future is uncertain. We are devot- ing daily attention to the matter on the Hill, working to edu- cate lawmakers both about the Foreign Service and about the difference between salary (which includes OCP) and allow- ances and benefits. Compensation such as cost-of-living allowances and hard- ship differentials covers special expenses unique to a post. Other benefits, such as government housing, are provided for the ben- efit of the government itself. None are salary. All are pro- vided equally to those who receive comparability pay and those who do not. Treating these benefits as salary for the FS, when they are not treated as such for any other federal employees, not only perpetuates inequities between the FS and all other civilian employees, but also fails to address the real effects of this inequity on retirement and other benefits. Information on how you can help our efforts can be found onAFSA’sWeb site at www.afsa.org/action_center.aspx. I u rge you to get involved. Your input and your efforts are neces- sary if we are to win this battle. Incomparable V.P. VOICE: STATE BY DANIEL HIRSCH OC T OB E R 2 0 1 1 / F OR E I GN S E R V I C E J OU R N A L 61 A F S A N E W S