President Joe Biden’s 2% average pay raise for federal employees in 2025 consisting of a 1.7% standard increase plus 0.3% based on location.
2% Average Increase for 2025 Amid Easing Inflation
According to the report of Scripps News, President Joe Biden has announced a 2% average pay raise for federal civilian employees in 2025. This increase comprises a 1.7% standard raise for all federal workers plus an additional 0.3% based on their work location. The objective is to ensure competitive wages while adhering to budget constraints amid current economic conditions. Although the raise is modest, it aims to attract and retain the skilled personnel crucial for the effective operation of the federal government.
The planned pay raise for 2025 is smaller compared to recent years. Federal employees experienced notable raises of 4.6% in 2022 and 5.2% in 2023 due to high inflation during those periods. With inflation easing to 2.9% as of July 2024 and the 2025 increase is more restrained reflecting the reduced inflationary pressures.
(photo: NBC Montana)
A Balanced Approach to Fair Compensation and Budgetary Discipline
Despite the decline in inflation, the 2025 pay raise remains below the average wage growth in the private sector which stands at 3.3% annually. The Biden administration aims to balance fair compensation with budgetary discipline. As the new pay rates take effect on January 1, 2025, federal employees will see an adjustment that mirrors the current economic conditions though it is lower than the wage growth in the private sector.
While the 2025 pay increase will provide some relief to federal employees it still lags behind the average pay raise in the private sector which is 3.3%. The Biden administration’s decision seeks to find a middle ground between offering fair wages and maintaining budgetary control. Although the adjustment is meant to support a capable federal workforce and it may not fully mitigate the rising cost of living, especially in comparison to the larger raises seen in recent years.
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