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Washington, D.C.-Newly-released economic statistics point to a likely proposed pay increase of about 4.6 percent for federal employees in 2002, a raise the leader of the nation's largest independent union of federal workers called "a good place to start," but falls short "of making a serious impact" on the continuing gap between public and private sector pay that ranges as high as 30 percent.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) was commenting on the Employment Cost Index (ECI) data released by the Labor Department's Bureau of Labor Statistics (BLS).

The ECI, which measures changes in both public and private sector costs of wages, salaries and benefits over a 12-month period ending in September, is a central component in calculating federal pay raises.

Under the Federal Employees Pay Comparability Act (FEPCA), the federal pay increase should be calculated by subtracting .5 percent from the ECI, then adding a locality adjustment to account for regional cost differentials. However, the locality adjustment has been ignored for some years, leading to the current public-private sector pay gap.

In recent years, the administration has subtracted the .5 percent from the ECI, then added one percentage point for locality pay. The ECI last year was 3.2 percent, leading to a proposed federal pay raise for 2001 of 3.7 percent. Under that scenario, it is anticipated that the 4.1 percent ECI indicates the likelihood of a 2002 federal pay raise of 4.6 percent, Kelley said.

"While a 4.6 percent raise would help reflect the continuing excellent contributions of federal employees to the nation," she said, "there is a growing realization among lawmakers, both Democrats and Republicans, that more must be done by government to attract and keep the skilled workers it needs now and in the future."

She noted that Ohio Republican Sen. George Voinovich recently cautioned that the federal government could lose as many as 900,000 employees-half of its present civilian workforce-over the next five years through early and regular retirements. "Clearly, we have to address this situation," the NTEU president said.

Under FEPCA, a law that became effective in 1994, the government is supposed to close, in stages over 10 years, the pay gap between the federal and private sectors. It has not done so, and the gap today has grown to between 13 and 30 percent, depending on location.

Kelley said the recent announcement of a record federal budget surplus of some $230 billion "is a clear indication that more can and should be done" to close this gap. "Higher pay is only one of the important steps the government can take in encouraging the best among us to commit to government service, but it is a high-visibility factor, and one that we must address in a truly meaningful way."

The federal pay increase for 2001, which reflects the ECI plus .5 percent, is anticipated to be 3.7 percent.

NTEU represents more than 155,000 employees in 25 agencies and departments.