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Pay Disparities And Comparability Payments

Table 3, below, lists the pay disparity for each pay locality. Table 3 also derives the recommended local comparability payments under 5 U.S.C. 5304(a)(3)(I) for 2011 based on the pay disparities, and it shows the disparities that would remain if the recommended payments were adopted.

The law requires comparability payments only in localities where the pay disparity exceeds 5 percent; the goal was to reduce local pay disparities to no more than 5 percent over a 9-year period (5 U.S.C. 5304(a)(3)(I)). The "Disparity to Close" shown in Table 3 represents the pay disparity to be closed in each area based on the 5 percent remaining disparity threshold. The "Locality Payment" shown in the table represents 100 percent of the disparity to close. The last column shows the pay disparity that would remain in each area if the indicated payments were made. For example, in Atlanta, the 48.08 percent pay disparity would be reduced to 5.00 percent if the locality rate were increased to 41.03 percent (148.08/141.03-1) X 100 = 5.00 percent).

The table does not include Alaska, Hawaii, and the other non-foreign areas because these areas have not yet been established by the Council and the Pay Agent. Based on the data provided by BLS, the Anchorage pay gap of 54.98 percent would yield a target pay gap and locality rate of 47.60 percent, and the Honolulu pay gap of 38.41 percent would yield a target pay gap and locality rate of 31.82 percent for 2011.

The actual remaining pay disparity as of January 2011 may differ from the calculations for two reasons. First, Federal pay will have increased by the amount of the across-the-board increases that become effective in January 2010 and January 2011. Second, non-Federal pay will have increased by some amount from March 2009 to January 2011. For the purpose of this report, we assume that future changes in Federal and non-Federal pay will effectively cancel each other out and the pay disparities will remain about the same.

Table 3. Local Pay Disparities and 2011 Comparability Payments

Average Locality Rate

The average locality comparability rate in 2011, using the basic GS payroll as of March 2009 to weight the individual rates, would be 38.88 percent under the methodology used for this report (based on the disparity to close). The average rate authorized in 2009 was 19.40 percent. At this time, we do not know what locality rates will be approved for 2010. The locality rates included in this report would represent a 16.3 percent average pay increase over 2009 locality rates. Note these calculations do not consider Alaska, Hawaii, or the other non-foreign areas.

Overall Remaining Pay Disparities

The full pay disparities contained in this report average 45.82 percent using the basic GS payroll to weight the local pay disparities. However, this calculation excludes existing locality payments. When the existing locality payments (i.e., those paid in 2009) are included in the comparison, the overall remaining pay disparity as of March 2009 was (145.82/119.40-1) X 100, or 22.13 percent. Table 4, below, shows the overall remaining pay disparity in each of the 32 approved locality pay areas as of March 2009. Note this calculation does not consider Alaska, Hawaii, or the other non-foreign areas.

Table 4. Remaining Pay Disparities in 2009