The President's Pay Agent
PAY DISPARITIES AND COMPARABILITY PAYMENTS
Table 2, below, lists the pay disparity for each pay locality. Table 2 also derives the recommended local comparability payments under 5 U.S.C. 5304(a)(3)(I) for 2007 based on the pay disparities, and it shows the disparities that would remain if the recommended payments were adopted.
Table 2 includes locality pay areas for Buffalo, Phoenix, and Raleigh. Since data for these three locations are still used as part of the salary survey data for the RUS locality pay area, we have adjusted the RUS area disparity to net out these three areas. The adjusted RUS pay disparity is the original RUS disparity adjusted to remove Buffalo, Phoenix, and Raleigh by weighting the individual location pay disparities by GS base payroll in each area. The "RUS-adjusted disparity" column shows the adjusted RUS pay disparity.
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 2 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 31.39 percent pay disparity would be reduced to 5.00 percent if the locality rate were increased to 25.13 percent (131.39/125.13-1) X 100 = 5.00 percent).
The actual remaining pay disparity as of January 2007 may differ from the calculations above for two reasons. First, Federal pay will have increased by the amount of the across-the-board increases that become effective in January 2006 and January 2007. Second, non-Federal pay will have increased by some amount from March 2005 to January 2007. For the purpose of this report, we assume that future changes in Federal and non-Federal pay will effectively cancel each other out and that the pay disparities will remain about the same.
Table 2. Local Pay Disparities and 2007 Comparability Payments
Average Locality Rate
The average locality comparability rate in 2007, using the basic GS payroll as of March 2005 to weight the individual rates, would be 24.15 percent under the methodology used for this report. The average rate authorized in 2005 was 14.99 percent.
Overall Remaining Pay Disparities
The pay disparities contained in this report average 30.36 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 2005) are included in the comparison, the overall remaining pay disparity as of March 2005 was (130.36/114.99-1) X 100, or about 13.37 percent. Table 3, below, shows the overall remaining pay disparity in each of the 32 approved locality pay areas as of March 2005.
Table 3. Remaining Pay Disparities in 2005