It’s freezing

I live in San Diego. The temperature may never drop below 60 here (random fact: it hasn’t snowed in San Diego since 1967), but guess what…IT’S FREEZING. No, I’m not talking about the temperature. The only thing frozen here is my salary.

If you read/watch/listen to the news, you’ve probably heard Obama has proposed the freezing of all federal employee’s pay for at least two years.

As a federal employee, I think this is absolutely is insane. We deserve to prosper and are entitled to annual pay raises! Heck, we’ve received them EVERY year for the last 22 years. We work for America and this raise is one small way you (the tax payers) can thank us.

Bwahaha….did I just piss a few of you off? Good. I love being facetious. In all honesty, I can’t say I’m surprised by Obama’s proposal. In fact, I’m shocked he didn’t do this two years ago.

I’ve worked for the Fed for three years now and have received a 2% raise at the beginning of each year. It’s been nice getting an extra $2,000 or so added on to my annual income, but I’m not stupid. I knew it had to come to an end at some point. And ya know what, I’m a-okay with Obama’s proposal.

While I think the freeze is a wise decision, I don’t like the way it is being marketed as a symbolic act of the government’s commitment to cut back spending and stabilize the economy. Let’s crunch the numbers.

The proposed freeze would save the tax payers approximately $5 billion over the next two years. The budget deficit stands at $1.3 trillion. This $5billion reduction (although it sounds like a lot of money) really only reduces the deficit by approximately 0.3%. That’s pathetic. If the government wants to convince the American people that they are willing to do what it takes to reduce the deficit, they better come up with something a little more buzz worthy.

Being a federal employee, during the recession, hasn’t been easy. A lot of people are pissed off at the government and they transfer that anger towards me. Look I get it, you think federal employees are overpaid. Stop whining to me about it. I don’t set the federal employee benefit plans and pay schedules. You’re complaining to the wrong guy. You wouldn’t walk up to a bank teller at Bank Of America and yell at her for all the shady things the BoA corporate big-wigs have done, would you? So why do you chastise me for something I have no control over?

Hopefully I’m one federal employee you won’t get frustrated with. I will gladly take my salary freeze πŸ™‚

I know I can’t be the only person to have an employer related cutback as a result of the slow economy. How have you been affected? Lost any benefits? Laid off, fired, etc? Mandatory furlough days? Do you hate me because I work for The Man?

39 thoughts on “It’s freezing”

  1. I think people are frustrated because the number of federal employees making over $100K/year jobs has grown. In the past, there has been a perception that the tradeoff between public and private sector jobs was that in the public sector, you got a lower salary in exchange for very good benefits like a kick ass pension and decent job security. Now that the gap is closing on salary more people are feeling resentful.

    I think the move directionally is a good one. I personally don’t resent you for being a govt. employee.

  2. I think it was a good move on Obama’s part. No, its not going to solve the whole problem but ya gotta start somewhere. I work for a really small graphic design studio, just 2 employees and the boss. When the economy drops the first thing out of the budget unfortunately is design so we’ve been hurt drastically. I haven’t seen a raise or holiday bonus in over a year but I’m really thankful I still have a job at all! My boss continues to keep us busy with internal projects and pays us from savings when she has to just to keep the business going until things hopefully pick up again. In such a small office its really easy to see the direct results of the recession and I think a lot of federal employees have been protected from that for a while now.

  3. I work in Customer Service for a globally-recognized chemical company, and I’ve been lucky to live through 4 large rounds of layoffs since I started in March, 2004. The only way I can see me losing my job (though never say never) is if head office (in U.S.) decides to close the Canadian Cust. Serv. operation and centralize it to the States. In June this year, I had to do a lateral move back to front-line phones when powers-that-be decides to re-organize and centralize my then-function back to the States. Wasn’t happy about it, contemplated leaving, but sucked it up because I need the paycheck. Our company offers pension plan, matching RSP contributions (think 401K), full health benefits, and I’ve been lucky to get a profit-sharing cheque every February (that I put into my RSP). We went 1 year (in 2008) without raises, but had an incentive “save money” program… and we met our goals… and got our $. I was totally cool with not getting a raise (even if we hadn’t met our incentive goal) because it meant me keeping my job.

    Hubby lost his job in Oct./09 (he, too, survived a lot of lay-offs, but the plant closing was his demise), but was only unemployed for about 3/12 months.

  4. Pay freezes all around over here. Hubby’s salary was frozen in 2010 and is frozen for 2011. It will also be frozen in 2012. After that, who knows… Mine is likely to be frozen come April when the new fiscal year begins – probably frozen for 2 years. We’ll see. (BTW, we’re in Canada so I don’t suspect Obama’s responsible for OUR salary freeze!)

  5. Oh yeah. Cutbacks big time. I work for a Medicaid funded organization (Adult Day Health Program) for adults with mental retardation. Let me tell you, these guys ALWAYS get the shaft in a down economy. It really angers me that the feds can continue to subsidize Walmart, bail out the banks, and otherwise financially support organizations with shady operations, but will cut funding for this population in the blink of an eye.

    We had a big round of layoffs, mandatory furloughs, and a lot of clients lost their funding all together. We are literally month by month – and if we shut down, all these guys will be stuck to rot in Medicaid funding nursing homes (which cost more per day than our program). And if you haven’t been to one of those, spare yourself. They’re terrible.

    I am one VERY angry citizen. I do not understand the fiscal priorities of the government.

  6. “The proposed freeze would save the tax payers approximately $5 billion over the next two years. The national debt stands at $14 trillion. This $5 billion reduction (although it sounds like a lot of money) really only reduces the deficit by approximately 0.0357%.”

    Careful on your terminology – big difference between debt and deficit. The percentage you describe above is actually the reduction in the debt, not the deficit. The debt may be $14 trillion, but the deficit (annual budget gap) is only $1.3 trillion. Thus a $5 billion savings actually reduces the deficit by .38%.

    Anyway, my husband is a Fed and we actually support the move. Everyone doing their part, and a much better solution than a hiring freeze or laying off workers. Wish they’d let those damn Bush tax cuts expire, though. That’s the only thing that will make a real difference.

    • I agree the tax cuts should end for those making over $250K but for the little guy…those cuts are what is helping some stay above water. Yes it may not seem like a lot, but for some people, they need every penny they can get.

  7. I’m sorry about your potential pay raise. Obama is between a rock and a hard place. The money has to come from somewhere and I don’t think taxing people more would be the answer.

    If you tax big corporations, they’ll simply pack up and move like Haliburton – they decided to move to Dubai.

  8. I’ve been pretty company (it’s a non-profit) is doing pretty well. We don’t get huge increases in pay, but we’ve been able to keep out good benefits and continue to get our COL increase. No layoffs, and we’ve been improving the office (new computers, things like that) during the past 2 years. Sure I’d love to have a huge pay raise, but I’m content to hang out at this job for awhile longer…

  9. I’m just waiting for the government to start running themselves like a real business. Salary freeze is the first step. Next is reducing headcount (ie cutting programs and/or cutting the fat from necessary programs). My company reduced headcount by about 33% from the peak of the recession. A 33% reduction in federal employees/programs would go a LONG way to balancing the budget.

  10. I am taking a 5% paycut every January 1 for 5 years! I’d gladly take a pay freeze instead…
    My health benefits are being overhauled so I will probably have to spend a few extra grand on medical expenses for my family of 4.
    I’m salaried and because we had a person quit in February I work a lot of overtime with no compensation or thank you.

    The economy is slow and jobs are scarce- I have to be thankful to have a job right now.
    And they are determining in the next few months if they should outsource one of our components. Initially it would be about a quarter of our offices- but that doesn’t include the support departments and no one is sure of how each if the support departments will be affected over time (IT, accounting, admin, HR).

    Good luck with your situation!! It could always be worse, I guess!

  11. LOL, I’ve actually been yelled at as a bank teller for the bank making too much money. Yep, it’s all my fault people. That’s why I chose the crappy job as a BANK TELLER instead of CEO so I can be harassed daily by fed up customers. I’ve even been yelled at as a teller about the phone company charging the customer too much money on their bill!!! Um, you just PAY your bills at the bank, the bank doesn’t bill you for your phone usage. You’d be surprised of the behaviour of some people when you work in customer service! Grown adults throwing temper tantrums is VERY common.

    • Yup me too, I worked at a bank call center and I got yelled at all the time for being part of the big bad bank that had too much money.

  12. Don’t interchange deficit and “national debt”!

    I heard someone say that only the yearly “cost of living” raises were frozen, but that you still are able to get raises involved in moving up in the system. I don’t know if that is true.

    I’ve survived 2-3 rounds of layoffs and my promised promotion is stalled in some executive’s office after my boss’s boss’s boss approved it. GRRR.

  13. I got laid of at the beginning of this year because my previous employer couldn’t cut it with the current economic situation. It actually turned out to be a blessing in disguise as I really love my new job more than my previous one!

  14. Love it! Can I ask how on earth Federal Gov’t employees got to get raises for two years during ARMAGEDDON?

    I mean, I’m fine with that.. but at the very least, don’t go after the private sector and tell them to slash wages and stuff when their wages were getting ROCKED and everyone was losing their jobs!

    Come check out my post and share your thoughts pls as we wrote about the same topic,

  15. My Engineering company had a bunch of layoffs last year, and thankfully I survived those, but they then announced last July that the entire firm was taking a 12.5% paycut. I have survived, but as a result racked up some credit card debt since I was locked into a year long lease, and already living paycheck to paycheck here in NYC. I moved into a small sublet when my lease was up, (considered moving into a relative’s basement for a while but the commute was too expensive), have been making all my meals as much as possible, and have cut out a lot of fun things so I can pay down the debt as much as possible. Hopefully Ill be done with debt and can start adding to an emergency fund asap.

    The pay cut only lasted 9 months and we’re back to normal now, but I’m still trying to save wherever I can, and Im not holding my breath for a raise. A pay freeze would have been better than a paycut, but right now I’m just thankful to have a job πŸ™‚

  16. I work for the largest employer in CA, which is only partially funded by the state, but we definitely have been hit with furloughs and other such nonsense, although I personally have not been simply because of the source of my funding. (But even in that sense, research grants have taken a hit, because the NIH will basically tell you “that grant we funded – yea you need to take a 15% cut off of that this year” which affects our ability to do the research in the first place.) The thing that irks me about freezing salaries and forcing furloughs is that you’re mostly affecting people who really don’t make that much money (I’m not trying to argue about our awesome benefits packages, but the salaries alone are often significantly lower than what you’d find outside of state or federal employment), who are driving consumer spending, who are buying property, etc etc etc. So simply freezing or cutting the salaries of my particular employer, for instance, affects approximately 150,000 people in the state of CA: their spending habits, their saving habits, and everything in between. To act like it’s just a simple cut that saves money and doesn’t trickle down the line to affect our businesses and everything else is ridiculous, and really simple-minded. When Meg Whitman was saying she wanted to cut 40,000 jobs and basically launched an anti-union campaign, all I could think was “and who do you think those 40,000 people are going to vote for? who do you think is in unions?” because we are real people, in the end, and we’re probably not overpaid or swimming in money like is implied. We’re struggling to cover our costs just like everyone else, and we just happen to somehow work for the state or fed.

    So I agree that there’s adequate reasoning to have the cuts, but I think we need to talk about and recognize what those cuts really mean to the people who are dedicated to our state and/or country (because really, I’d bet that state or fed workers are much more contributing members of society than most other industries), and you’re right that even these types of cuts are paltry at best. Everyone likes to demonize the workers as if they are faceless beings out there, but we’re real people, damnit, and it’s about time that the government stops trying to shit on the lower to middle class to solve the problems that other people created, while not taking from the people who are sitting on piles of money. (I’m not saying we should “redistribute wealth” in that supposedly scary “socialist” way, but 15% cuts do not mean the same thing to someone making $45,000 vs. someone making millions.)

  17. I used to be a Fed so I get this. The problem I had was that I started entry-level. Back then, I needed my pennies but I made do by living below my means. I would hope this is a reality check for many who thought they were untouchable because they are Feds.

    I think this is a good PR move but I’m not naive enough to think this will help a lot of the $100K+ Feds realize how it feels for the rest of the country. Not all are as humble or thoughtful as you and I. I know that in my area the impact won’t be huge (I live in the DC area). But hopefully this will open some eyes.

    I also hope many of those getting the cut won’t balk too loud. The fact that they have job security should make them think twice about complaining. Especially with such a high unemployment rate. That being said…I think the next move needs to be the Fed contractors (I was also one of those). That is truly where the really high salaries are.

    Problem is…if Feds get “fed” up enough with no increase for 2 years…they’ll just become contractors and get salaries even higher.

  18. I work for a public institution and I haven’t received a raise since I started working here 2 and half years ago. It’s kind of difficult especially since the cost of living has gone up. I had to get a part time job to supplement for the non-existent raises. However, after 11 months of working 60 hours a week, I can’t do it anymore, I’m considering looking for another job altogether but how does one go about it without losing the current one? I guess we just have to take chances.

  19. Looks like others caught the debt/deficit issue already.

    I work for a private company and have so for 2.5 years. In that time, I have received ZERO cost-of-living increase and a tiny $1,800 raise when I was promoted 2 years ago. Which isn’t much at all when I started at a $33K base salary! The annual bonus I receive barely puts me at $40K…so yes, thank you for being OK with your lack of raise. Btw, does that only apply to COL increases? What about merit/performance based raises? Our salaries are frozen across the board for the past two years, I got my pathetic raise just in time! For 2011, small COL raises are “possible”…we’ll see! πŸ™‚

  20. I want to work for the man. Specifically, I’m applying for clerical positions in the school system so I can take a $5000 pay cut but gain about 100 more vacation days and a pension, lol.

    I got a $750 raise this year but then found out that we’ll have to pay $1250 more for our medical benefits…yay for sneaky $500 pay cuts, right? πŸ™‚

    • I HATE when teachers cry poverty yet don’t talk about their actual time worked…They have so many stinking days off I’m jealous.

      • Do you actually know any teachers very well? They work many hours when schools are “closed” — grading papers, planning lessons, meeting with students and parents. Continuing education mandates (training) take a considerable time commitment during summer and other breaks. There is also time spent setting up and closing down classrooms each year, meetings to amend curriculum, parent conferences, and so on. Plus, as for the salary itself, many teachers are required to have a Master’s degree before they will be hired full-time, which means an up-front financial commitment (usually in the form of student loans). And yet starting level teachers are paid the same as other professions which require only High School or Associates degrees.

        I used to think as you did, and even considered becoming a teacher myself due to the “days off”…until I actually met a few teachers and observed their typical work schedule. If public education was really such a cushy job, many more people would be lining up to become teachers.

  21. Since 64% of the Federal budget is spent on entitlements, that would seem like a logical place to start making cuts.

    As for Federal employees, I’m glad most of them understand that it’s unsustainable working for an employer that is going over $1 Trillion into the red each year. The good news is that America is a free country. Just like private sector employees, they are free to pursue other opportunities, if they feel the pay freeze is unreasonable.

  22. Not only did I get a 3% COLA this year but another 7% raise for moving to a different department, plus a possible 10-15% end-of-the-year bonus … woo hoo…. oh wait, is that too much gloating? Sorry… I had to. Too much negative vibes in here. Who else got big fat raises? C’mon surely there are some bankers in here… πŸ™‚

    I commend Obama for this move… but, compared to the private sectors which made cutbacks and salary freeze two years ago…I think it’s too little too late… Any companies that’s being run like the Federal gov would have filed for bankruptcy eons ago.

  23. I actually benefited from this recession. My company laid off some coworkers so I don’t have to split my tips with them anymore. Granted I have to work twice as hard but money is money. Actually three times as hard because the tips are smaller these days. Ah well, grateful to be employed.

  24. Hubby is fed gov’t. I understand that the gov’t is a business, and this is what they have to do. But….

    In step raises are only every 3 years. COLA and Locality barely cover the insurance hike each year. They just adjusted work schedules…so I am estimating that when all is said and done, it will be a pay cut of about $1500 per year for us.

  25. Annual raises are not guaranteed in the private sector. I know several people who have taken pay cuts during the recession. For some it was in the form of overtime being eliminated, for others less hours, and still others an actual reduction in their hourly wage. Though I’d love to see everyone’s annual pay keep pace with inflation, it’s not very realistic. Businesses make adjustments to their payrolls based on their revenue and what they can afford to pay out and remain profitable.

    Considering the huge government budget deficit I think the freeze is warranted. Any individual that does what the government is doing (living beyond its means) for any length of time ends up bankrupt. Greece and Ireland have already ended up there.

  26. Yes, I hate you because you work for the government. You get cushy benefits, nice salary, and no chance of being fired. I am joking of course. I wondered how federal employees felt about the pay freeze. Would they be upset or a work slowdown?

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