Federal Employees Set for a 2.0% Pay Raise in 2025
President Biden has confirmed a 2.0% pay raise for federal civilian employees in 2025 — a significant drop from last year’s 5.2% raise, sparking mixed reactions across the federal workforce.
This decision aligns with the president’s fiscal year 2025 budget and takes effect on January 1, 2025. It’s clear the administration aims to balance fiscal responsibility while recognizing the need to compensate federal workers fairly.
“We must attract, recruit, and retain a skilled workforce with fair compensation in order to keep our government running, deliver services, and meet our nation’s challenges today and tomorrow,” Biden emphasized in his letter.
While Biden acknowledged the constraints of the current budget environment, this pay raise — his smallest since taking office — follows more substantial raises of 5.2% in 2024, 4.6% in 2023, and 2.7% in 2022.
Why a 2% Pay Raise Matters for Federal Employees
Let’s break this down. The 2.0% raise, though modest, comes at a time when federal employees continue to face increasing workloads and rising costs of living. While the raise is consistent with wage growth across the broader labor market, many employees were hoping for a more substantial increase — especially in the wake of persistent inflation and growing financial pressures on American households.
It’s worth noting that this raise comes in stark contrast to the 7.4% increase proposed earlier this year by Rep. Gerry Connolly (D-VA) and Sen. Brian Schatz (D-HI) as part of their Federal Adjustment of Income Rates (FAIR) Act. Their proposal would have more closely aligned federal salaries with private sector wage increases and provided a more robust boost to the purchasing power of civil servants.
Reaction from Federal Employee Advocates
Federal employee groups, like the National Active and Retired Federal Employees Association (NARFE), have voiced concerns over the lower-than-expected pay raise. NARFE’s National President William Shackelford called the 2.0% raise “disappointing,” especially when compared to the proposed 4.5% pay raise for military personnel. Shackelford pointed out that federal employees have long faced pay discrepancies when compared to private sector workers, and inflation only makes those gaps more pronounced.
“This inequity raises concerns about the fair treatment of Federal employees and their contributions to our nation,” Shackelford said. “The below-market pay increase fails to reflect trends in the private sector, where wages and salaries have risen, and unemployment rates are low.”
Shackelford and others continue to push for more equitable compensation through the FAIR Act, which would recognize the hard work and dedication of federal workers by providing a raise more in line with inflation and private sector wage growth.
Why Federal Workers Need to Pay Attention
Here’s what you need to know: unless Congress steps in with an alternative proposal — and that seems unlikely at this point — the 2.0% pay raise is likely to become official once President Biden signs an executive order later this year. While the raise may not be as high as some hoped, it’s still an acknowledgment of the important role federal employees play in keeping our government running and serving the public.
Federal workers should keep an eye on updates in the coming months, especially as the executive order approaches. And if you’re feeling disappointed by this increase, consider advocating for stronger pay raises in the future by joining efforts like NARFE’s push for the FAIR Act.
Final Thoughts
While a 2.0% pay raise is certainly better than nothing, it’s understandable that many federal employees feel it’s not enough — especially in comparison to what was provided in the past few years. With inflation still looming and wages in the private sector continuing to rise, federal workers are left wondering if their compensation truly reflects the value they bring to the table.
At the end of the day, federal employees are the backbone of our nation’s government. They deserve fair compensation that keeps pace with the economy, and while this pay raise is a step in the right direction, it leaves room for improvement in future discussion.
About the Author
Brian Reese is one of the world’s leading VA disability benefits experts and the #1 bestselling author of VA Claim Secrets and You Deserve It. Frustrated with the VA claim process, Brian founded VA Claims Insider to help disabled veterans win their VA disability compensation faster. He has served over 10 million military members and veterans since 2013. A former Air Force officer, Brian deployed to Afghanistan in 2011. He is a Distinguished Graduate from the U.S. Air Force Academy and holds an MBA from Oklahoma State University, where he was a National Honor Scholar.
