Federal Employees: Pay and Pension Increases Since 1969
Prepared for Members and Committees of Congress
Pay increases for current federal employees and cost-of-living adjustments (COLAs) for retired
federal employees often differ because they are based on changes in different economic variables.
Increases in pay for civilian federal workers are indexed to wage and salary increases in the
private-sector, as measured by the Employment Cost Index (ECI), whereas federal retirement and
disability benefits are indexed to price increases as measured by the Consumer Price Index (CPI).
Both the ECI and the CPI are calculated by the Bureau of Labor Statistics of the U.S. Department
Under the terms of the Federal Employees’ Pay Comparability Act of 1990 (P.L. 101-509), pay
for civilian federal employees is adjusted each year to keep the salaries of federal workers
competitive with comparable occupations in the private sector. The annual increases in federal
employee pay are based on changes in the cash compensation paid to workers in the private
sector, as measured by the ECI. Under certain circumstances, the President may limit the annual
increase in federal pay by executive order. Federal law also requires Social Security benefits and
the pensions paid to retired federal employees to be adjusted each year. The COLAs for both
Social Security and civil service pensions are based on the rate of inflation as measured by the
Congress has linked increases in federal pay to the ECI so that wages for federal employees will
remain competitive with wages paid by firms in the private sector. Congress has linked COLAs
for Social Security and federal retirement benefits to the rate of increase in the prices of goods
and services in order to protect retirement income from losing purchasing power through the
effects of inflation. In general, wage increases reflect both improvements in the productivity of
labor and increases in the general level of prices in the economy. Consequently, when measured
over long periods of time, wages tend to rise faster than prices. Because COLAs for retirees do
not reflect increases in the productivity of people who are still in the work force, COLAs do not
make retirees financially better off. COLAs merely protect retirees from becoming financially
worse-off as prices rise over time.
Increases in retirement benefits for retired federal employees were first linked to the CPI by law
in 1962. Increases in Social Security benefits have been linked by law to changes in the CPI since
Congress chose to tie increases in these benefits to the CPI in order to make the process less
subject to political influences. At year-end 2008, the overall price level as measured by the CPI
was 473% higher than it was in 1969. As of January 2009, Social Security benefits have risen by
626% since 1969, while federal civil service retirement benefits have risen by 496%. Average
wages among all workers in the economy have risen by 643% since 1969. Salaries for civilian
federal employees have increased by 418% since 1969, and the salaries of Members of Congress
have increased by 309%.
This report is updated annually.
COLAs Versus Pay Increases..........................................................................................................1
How to Use the Benefit and Pay Increase Table..............................................................................2
Procedures for Determining Increases.............................................................................................2
Social Security and Civil Service Retirement...........................................................................2
Federal Civil Service Pay..........................................................................................................3
Uniform Nationwide Pay Raises.........................................................................................3
Federal Pay Raises for Within-Grade Step Increases and Promotions.....................................4
Pay for Members of Congress...................................................................................................5
Average Annual Wages and Salaries.........................................................................................5
Table 1. Increases in Social Security Benefits, Federal Civilian Pensions, Federal Pay,
Congressional Pay, National Average Wages, and Consumer Prices, 1969 to 2009....................7
Author Contact Information..........................................................................................................10
nder the terms of the Federal Employees’ Pay Comparability Act of 1990 (P.L. 101-509),
pay for civilian federal employees is adjusted each year to keep the salaries of federal
workers competitive with comparable occupations in the private sector. The annual U
increases in federal employee pay are based on changes in the cash compensation paid to workers
in the private sector, as measured by the Employment Cost Index (ECI). Under certain
circumstances, the President may limit the annual increase in federal pay by executive order.
Federal law also requires Social Security benefits and the pensions paid to retired federal
employees to be adjusted each year. The cost-of-living adjustments (COLAs) both for Social
Security and civil service pensions are based on the rate of inflation as measured by the
Consumer Price Index (CPI). Table 1 shows the pay increases since 1969 for federal employees
and Members of Congress and COLAs applied to Social Security benefits and federal civil 1
Two national economic indexes also are displayed in Table 1 to provide a basis for comparison
with the benefit and pay increases. These are the average annual change in the wages of all
workers in the United States, as computed by the Social Security Administration, and the
Consumer Price Index for Urban Wage Earners (CPI-W), a price index computed by the U.S.
Bureau of Labor Statistics.
Pay increases for current federal workers and cost-of-living adjustments (COLAs) for retired or
disabled federal workers often differ because they are based on changes in different economic
variables. Pay increases for federal workers are based on changes in private-sector wages and
salaries, whereas COLAs for retirees are based on increases the general level of prices in the
national economy. The objective of federal pay policy is to keep pay in the federal government
competitive with pay in the private sector. Increases in pay for federal civil service workers
therefore are indexed to increases in the wages and salaries of private-sector employees. Over
time, wage increases reflect increases in the nation’s output of goods and services as well as price
increases. Because wage increases in the private sector reflect growth in the productivity of labor,
wages tend to increase faster than prices when measured over long periods of time.
Social Security benefits and federal retirement annuities are indexed to increases in the CPI,
which measures changes in the price of a market basket of consumer goods and services.
Congress has linked COLAs for Social Security and federal employee pensions to the rate of
increase in the general level of prices in order to protect retirement income from losing
purchasing power through the effects of price inflation. COLAs ensure that a retiree’s income will
purchase the same amount of goods and services after years of retirement that it purchased at the
start of retirement. COLAs do not reflect increases in the productivity of people who are still in
the work force, and thus they do not increase the real purchasing power of retirement income.
COLAs do not make retirees better off financially; they merely protect them from becoming
financially worse-off over time as prices rise.
1 The income-tested programs of Supplemental Security Income (SSI) and veterans’ pensions use the cost-of-living
adjustment (COLA) formula of Social Security. Each year since 1983 these benefits have been increased at the same
time and by the same percentage as Social Security benefits.
Table 1 shows the percentage increase in federal pay and retirement benefits for each year since
1969, and an index relative to the base year. The index shows the cumulative increase in pay or
benefits, compounded annually, with a base of 100.0 in 1969. For example, Congress increased
Social Security benefits by 15.0% in 1970, making benefits 115.0% of what they were in 1969.
Another Social Security benefit increase of 10.0% was granted in 1971, making benefits 126.5%
of what they had been in 1969. (1.15 X 1.10 = 1.265) Federal civilian retirees received a 5.6%
increase in their annuities in 1970, raising those benefits to 105.6% of the 1969 level. The next
increase in federal civilian retirement benefits was a 4.5% adjustment in 1971, bringing the
average federal pension to 110.4% of its 1969 amount. (1.056 X 1.045 = 1.104)
The bottom row of the index column shows how much federal pay and retirement benefits have
grown since 1969. For example, with the COLA that was paid in Social Security checks issued in 2
January 2009, these benefits had increased to 726% of their 1969 level, an increase of 626%.
This means that a benefit initially paid in 1969 would be 7.26 times as large in 2009 if it were still
being paid this year. Benefit increases can be compared across programs by looking at the index
column for any given year. For example, as of 1985, federal civilian pay had increased by 134%
over what it had been in 1969, and congressional pay had increased by 77%. In comparison,
average wages and salaries for all workers in the U.S. economy in 1985 were 185% greater than
they had been in 1969. The column displaying the CPI shows that by 1985 the price level had
increased by 190% since 1969.
Social Security and civil service retirement benefits are adjusted to offset the effect of inflation in 3
the cost of living as measured by a price index. Cost-of-living adjustments enable retirees to
maintain the purchasing power of their retirement income. Automatic adjustments to offset
erosion in the value of retirement benefits caused by inflation were first applied to civil service
retirement benefits by P.L. 87-783, enacted in 1962. In 1972, P.L. 92-336, provided for automatic 4
inflation-related increases in Social Security benefits. Benefit increases in Social Security
preceding 1975 were not automatic COLAs linked to inflation, but were special adjustments
legislated by Congress. For example, Congress granted the 1970, 1971, and 1972 Social Security
2 An index of 726 means that the number is 726% of the base, which is an increase of 626%, just as 200 is 200% of 100
and represents an increase of 100% from a base of 100.
3 The two retirement systems for federal civil service workers use different adjustment systems. The Civil Service
Retirement System (CSRS), which applies to workers first hired into federal service before 1984, provides a full COLA
for all retirees and survivors. The Federal Employees’ Retirement System (FERS) covers workers hired on or after
January 1, 1984 and others who voluntarily switched from CSRS to FERS. In order to constrain retirement costs,
Congress placed restrictions on COLAs to FERS retirees. FERS provides COLAs to retirees under age 62 only if they
are disabled or are survivor annuitants. FERS retirees age 62 or over receive a full COLA only if the CPI increases by
2.0% or less. FERS retirees receive a 2.0% COLA if the CPI increase is between 2.0% and 3.0%. If the CPI increases
by 3.0% or more, the FERS COLA is 1 percentage point less than the CPI.
4 This law was amended in 1973 by P.L. 93-66 and P.L. 93-233 before the 1972 law went into effect.
increases of 15%, 10%, and 20%, respectively, in part because of concern about the number of
elderly Americans living in poverty. These increases were intended not just to offset inflation in
those years, but to raise the real level of benefits. The 8.0% Social Security increase effective in
June 1975 was the first automatic inflation-related COLA.
The large increases in Social Security benefits that Congress provided periodically before the
program was indexed to inflation have had a substantial effect on the cumulative index for Social
Security shown in Table 1 because the table uses 1969 as the base year for the index. This may
create a somewhat misleading impression if Social Security benefit increases are compared with
the civil service retirement program, which was indexed to inflation in the early 1960s. For
example, if 1975 were used as the base year for the index instead of 1969, the cumulative Social
Security increase through January 2009 would be 299%. This is almost the same as the 284% 5
cumulative increase in civil service retirement benefits during that period.
The benefit adjustments in these programs are made by computing the average monthly CPI for
the third quarter of the current calendar year (July, August, and September) and comparing it with
the CPI for the third quarter of the previous year. For example, the 5.8% Social Security COLA
paid in January 2009 represents the increase in the average monthly CPI for July, August, and
September of 2008 over the average monthly CPI for July, August, and September of 2007. The
benefit increases are first included in checks issued in the month of January and take place
automatically unless legislation is enacted to change them. In FY1986, the Gramm-Rudman-
Hollings Act canceled civil service retiree COLAs. In 1994, 1995, and 1996, P.L. 103-66 (the
Omnibus Budget Reconciliation Act of 1993) delayed civil service nondisability retiree COLAs
until April in order to achieve budget savings.
The Federal Employees’ Pay Comparability Act of 1990 (P.L. 101-509) established a two-step
system for setting and adjusting federal pay. Step one is an annual increase that applies uniformly
to all “white collar” federal civil service employees covered by the general schedule (GS) pay
system, the foreign service pay system, and certain pay systems for employees of the Department
of Veterans Affairs. The second step comprises locality-based salary adjustments that vary by
The uniform nationwide annual adjustment to the general schedule pay scales is based on the
average pay raise received by workers in the private sector from year to year. The Pay
Comparability Act specifies that the nationwide pay raises for federal white-collar GS workers
are to be one-half percentage point less than private sector wage increases, as measured by the 6
Employment Cost Index (ECI). The increase is computed by comparing the ECI for the third
quarter of the previous calendar year to the ECI in the third quarter of the calendar year before
that. Thus, there is a 15-month lag between the measurement period and the effective date of the
5 From 1969 through 1976 the adjustment for civil service retirement was 1 percentage point more than the rate of
6 The Bureau of Labor Statistics updates the ECI quarterly to measure changes in wages and salaries in private-sector,
pay raise. On the basis of the 3.4% increase in the ECI from the third quarter of 2006 to the third
quarter of 2007, the base pay increase for federal employees in January 2009 as determined under
the Pay Comparability Act was 2.9%. Although P.L. 101-509 specifies that the annual national
increase in basic GS pay rates will be equal to the percentage change in the ECI minus 0.5
percentage point, the law gives the President authority to limit pay raises through executive order
in the event of serious economic conditions or a national emergency affecting the general 7
P.L. 101-509 authorized locality-based pay adjustments for civilian federal employees in
specified occupations and geographic locations to reflect the salary levels of private-sector
workers in similar occupations in those areas. The original objective of the civil service locality
pay program was to bring federal salaries to within 5% of private sector salaries over a nine-year
period (1994 through 2002). Once pay parity is achieved, locality pay adjustments are no longer
to be made unless the gap subsequently widens to more than 5%. Although Congress suspended
the uniform nationwide civil service pay raise for 1994, it agreed to pay locality raises to civil
service workers. Since 1994, Congress has set aside P.L. 101-509 and specified in appropriations
bills the amounts available for distribution each year as locality pay increases.
The President’s FY2009 budget proposed a 2.9% federal civilian pay adjustment. Federal white-
collar employees received a 2.9% annual pay adjustment and a 1.0% locality-based comparability
payment in January 2009. President Bush authorized the average 3.9% pay adjustment in
Executive Order 13483, issued on December 18, 2008.
The data in the column labeled “federal civil service pay” in Table 1 reflect post-1969 uniform
nationwide pay raises and locality pay increases applicable to the government’s overall pay scales
for workers in GS positions, from GS-1, step 1, through the highest grade of GS-15, step 10. As
noted above, the government increases the federal GS pay scale periodically (usually once a year)
to be competitive with wages and salaries paid by other employers. The pay increases in Table 1
do not portray the total pay increases that any individual or group of individuals might have
received. As federal employees move through their careers, they receive pay raises when they are
granted a within-grade step increase or when they receive a promotion to a higher pay grade.
Both step increases and promotions to higher grades are merit increases that are based on an
individual’s performance in his or her job. If a worker were to receive all within-grade step
increases at the first point of eligibility without being promoted to a higher pay grade, it would
take 18 years to move from step 1 of a pay grade to step 10. The pay increases between steps
range from 2.5% to 3.3%. Thus, although Table 1 indicates that GS pay scales increased by 258%
between 1975 and 2009, the pay in 2009 of an individual who had been continuously employed in
a federal GS job between 1975 and 2009 would have risen by more than 258% due to the
combined effects of increases in the overall pay scales, within-grade step increases, and
promotions to higher grades. Some workers receive step increases but few promotions; others
7 Pay raises for members of the Senior Executive Service are not prescribed by law. They are established by the
President through an executive order. Thus, they may be the same as or different from other civil service pay raises.
receive steady, periodic promotions; and still others receive rapid promotions and spend many
years at high pay grades. Thus, it is not possible to characterize in general terms how the actual
pay of long-term federal workers increases over time. Consequently, Table 1 should not be
construed as characterizing the salary history of a typical federal employee.
The procedures for raising the pay of civilian federal employees were applied to Members of
Congress and other high-level federal officials by P.L. 94-82, enacted on August 9, 1975. In the
Government Ethics Reform Act of 1989 (P.L. 101-194), Congress approved different pay
increases for the House and the Senate for 1990 and 1991. Subsequent legislation passed by
Congress once again made Senators’ pay equal to that of Representatives, effective in August
1991. P.L. 101-194 also established a new procedure for setting Members’ pay. Pay increases for
Members and top level federal officials are now based on two pay-setting systems, one annual
and one quadrennial. Beginning in 1991, Members’ annual pay raises were based on changes in
the ECI reduced by 0.5 percentage point and capped at 5.0%. In addition, approximately every
four years a special commission is to review Members’ pay in comparison with that of private
sector executives and recommend adjustments that they deem appropriate. On several occasions,
Congress has voted to cancel the pay raises it was authorized to receive under P.L. 101-194.
Congress declined the pay raises that it otherwise would have received in 1994, 1995, 1996, 8
The annual pay increase for Members of Congress is computed by comparing the ECI for the
fourth quarter of the previous calendar year with the ECI in the fourth quarter of the year before
that. Thus, there is a 12-month lag between the measuring period and implementation of the pay
raise. Based on the 3.3% increase in the ECI from December 2006 to December 2007, Members
received a pay increase of 2.8% in January 2009.
The column labeled “average annual wages/salaries” displays the average annual increases in
wages and salaries earned by all workers in the United States as reported by the Social Security
Administration Board of Trustees. Like the data on civil service pay, this column does not reflect
the pay raises an individual worker might receive from year to year, because as workers gain
skills and experience they usually receive both pay raises and promotions. The data in Table 1
reflect average wage growth for the entire workforce, which is influenced by the retirement of
older, higher-paid workers and the entrance of younger, lower-paid workers. It also reflects shifts
in the structure of wages caused by declining employment in certain sectors of the economy and
increasing employment in other sectors. Because of the combined effects of pay raises and
promotions, a typical worker with a permanent attachment to the labor force would have
experienced wage growth greater than that shown in Table 1.
8 For more information, see CRS Report 97-1011, Salaries of Members of Congress: Payable Rates Since 1789 and
Recent Adjustments, coordinated by Ida A. Brudnick.
The final column of Table 1 shows the annual percentage change in consumer prices as measured
by the Consumer Price Index for Urban Wage Earners (CPI-W). The CPI represents the average
change nationwide in a typical “market basket” of goods and services purchased by consumers.
The CPI is constructed from several component indexes. The goods and services that consumers
purchase are classified into 211 strata of items, and the urban areas in the United States are
divided into 38 areas, each with its own index. Thus, there are 8,018 (211 times 38) basic CPI
components into which expenditures are classified. The items included in the index change as
new products or brands are introduced, and old products are modified, improved, or dropped.
Using the price level of 1969 as the base for the index, the CPI had risen to 572.7 by 2008,
meaning that consumer prices had risen by 472% over a 39-year period. This represents an
average annual increase in consumer prices of 4.6% over the period from 1969 to 2008. Over the
same period, wages and salaries rose at an average annual rate of 5.3%, or 0.7% faster than
prices. The 2008 index for Social Security benefits was higher than the price index (686
compared to 573), but this largely reflects the ad hoc increases granted by Congress in the early
290%. Federal civilian retirement benefits grew at nearly the same rate as consumer prices from
1969 to 2008, with the only differences accounted for by the lag-time between price measurement
and the implementation date of the COLAs for these benefits. Increases in pay for civilian federal
employees grew more slowly than consumer prices over the period shown in Table 1, standing at
an index value of 498 in 2008, compared to a CPI of 573.
9 Social Security and civil service retirement are indexed to the Consumer Price Index for Urban Wage Earners (CPI-
Table 1. Increases in Social Security Benefits, Federal Civilian Pensions, Federal Pay, Congressional Pay, National Average
Wages, and Consumer Prices, 1969 to 2009
Civilian (CSRS) aFederal Civil Congressional bAverage Annual cConsumer
Social Security Retirement Service Pay Pay Wages/Salaries Prices (CPI-W)
Percentage Percentage Percentage Percentage Percentage Percentage
Change Index Change Index Change Index Change Index Change Index Change Index
1969 100.0 100.0 100.0 100.0 100.0 100.0
1970 15.0 115.0 5.6 105.6 6.0 106.0 5.0 105.0 5.7 105.7
1971 10.0 126.5 4.5 110.4 6.0 112.4 5.0 110.3 4.4 110.4
1972 20.0 151.8 4.8 115.6 10.9 124.6 9.8 121.1 3.4 114.1
9711973 6.1 122.7 4.8 130.6 6.3 128.7 6.2 121.2
1974 11.0 168.5 12.2 137.6 5.5 137.7 5.9 136.3 11.0 134.5
iki/CRS-94-1975 8.0 182.0 12.8 155.2 5.0 144.6 4.9 104.9 7.5 146.5 9.1 146.7
g/w1976 6.4 193.6 5.4 163.6 4.8 151.6 6.9 156.6 5.7 155.1
leak1977 5.9 205.0 9.3 178.8 7.0 162.2 28.9 135.2 6.0 166.0 6.5 165.2
1978 6.5 218.4 7.4 192.0 5.5 171.1 7.9 179.1 7.7 177.9
://wiki1979 9.9 240.0 11.1 213.3 7.0 183.1 5.5 142.7 8.7 194.7 11.4 198.2
1980 14.3 274.3 14.2 243.5 9.1 199.7 9.0 212.2 13.4 224.8
1981 11.2 305.0 4.4 254.2 4.8 209.3 10.1 233.7 10.3 247.9
1982 7.4 327.6 8.7 276.3 4.0 217.7 15.1 164.2 5.5 246.5 6.0 262.2
1983 3.9 287.1 4.9 258.6 3.0 270.7
1984 3.5 339.1 4.0 226.4 4.0 170.8 5.9 273.8 3.5 280.1
1985 3.5 350.9 3.5 297.2 3.5 234.3 3.4 176.6 4.3 285.6 3.5 289.9
1986 3.1 361.8 3.0 294.2 1.6 294.6
1987 1.3 366.5 1.3 301.0 3.0 241.4 19.2 210.5 6.4 313.0 3.6 305.2
1988 4.2 381.9 4.2 313.7 2.0 246.2 4.9 328.3 4.0 317.4
1989 4.0 397.2 4.0 326.2 4.1 256.3 4.0 341.5 4.8 332.6
1990 4.7 415.9 4.7 341.6 3.6 265.5 7.9 227.1 4.6 357.2 5.2 349.9
Civilian (CSRS) Federal Civil Congressional Average Annual Consumer
Social Security Retirementa Service Pay Payb Wages/Salariesc Prices (CPI-W)
Percentage Percentage Percentage Percentage Percentage Percentage
Change Index Change Index Change Index Change Index Change Index Change Index
1991 5.4 438.3 5.4 360.0 4.1 276.4 29.5 294.1 3.7 370.4 4.1 364.3
1992 3.7 454.5 3.7 373.3 4.2 288.0 3.5 304.4 5.2 389.7 2.9 374.8
1993 3.0 468.2 3.0 384.5 3.7 298.7 3.2 314.1 0.9 393.2 2.8 385.3
1994 2.6 480.3 2.6 394.5 4.0 310.6 2.7 403.8 2.5 395.0
1995 2.8 493.8 2.8 405.6 2.6 318.7 4.0 419.9 2.9 406.4
1996 2.6 506.6 2.6 416.1 2.4 326.3 4.9 440.5 2.9 418.2
9711997 2.9 521.3 2.9 428.2 3.0 336.1 5.8 466.1 2.3 427.8
1998 2.1 532.2 2.1 437.2 2.9 345.9 2.3 321.4 5.2 490.3 1.3 433.4
iki/CRS-94-1999 1.3 539.2 1.3 442.9 3.6 358.3 5.6 517.8 2.2 442.9
g/w2000 2.4 552.1 2.4 453.5 4.8 375.5 3.4 332.3 5.5 546.2 3.5 458.4
s.or2001 3.5 571.5 3.5 469.4 3.7 389.4 2.7 341.3 2.4 559.3 2.7 470.8
leak2002 2.6 586.3 2.6 481.6 4.6 407.3 3.4 352.9 1.0 564.9 1.4 477.4
://wiki2003 1.4 594.5 1.4 488.3 4.1 424.0 3.1 363.8 2.4 578.5 2.2 487.9
http2004 2.1 607.0 2.1 498.6 4.1 441.4 2.2 371.8 4.6 605.1 2.6 500.6
2005 2.7 623.4 2.7 512.0 3.5 456.9 2.5 381.2 3.7 627.5 3.5 518.1
2006 4.1 649.0 4.1 533.0 3.1 471.0 1.9 388.4 4.6 656.4 3.2 534.7
2007 3.3 670.4 3.3 550.6 2.2 481.4 4.5 685.9 2.9 550.2
2008 2.3 685.8 2.3 563.3 3.5 498.2 2.5 398.0 4.1 714.0 4.1 572.7
2009 5.8 725.6 5.8 595.9 3.9 517.7 2.8 409.2 4.1 743.3 0.1 573.3
Source: Congressional Research Service.
Notes: Changes are shown for the calendar year in which the increase appeared in the checks issued. For years in which payments were increased more than once, the
compounded effects are shown.
a. The COLAs in this column are those paid to CSRS annuitants. The COLAs paid under FERS (which are lower than CSRS COLAs in any year that inflation exceeds
2.0%), are not shown. See CRS Report 94-834, Cost-of-Living Adjustments for Federal Civil Service Annuities for FERS COLAs each year since 1988.
b. The changes in each year are those for members of the House of Representatives. In 1969, Representatives and Senators were each paid $42,500. In 2009,
Representatives and Senators are each paid $174,000 per year. There was no pay raise for Senators in Representatives in calendar year 2007.
c. Computed by the Social Security Administration, based on wage data reported by employers to the Internal Revenue Service. Average wages for 2008 and 2009 are
estimates of the Office of the Actuary of the Social Security Administration. The CPI for 2009 is the January 2009 estimate of the Congressional Budget Office.
Specialist in Income Security