Labor unions upset with Obama's plan for 1 percent federal worker pay hike

Federal labor unions are crying foul over President Obama's proposal to raise federal employee pay by 1 percent next year, arguing the increase is inadequate.

David Cox, president of the American Federation of Government Employees, the nation's largest federal employee union, said Monday that the 1 percent increase is "pitiful" and fails to compensate for sacrifice by government workers.

“Federal employees have endured years of pay freezes and cuts in retirement benefits,” Cox said in a statement. “Federal employees deserve a meaningful pay raise, not a token increase that will be more than eaten up by rising living costs, including higher retirement and healthcare costs.”

The increase would mark the second year in a row that civilian federal workers would get a 1 percent hike after three straight years of pay freezes. Pay went up in January. The Pentagon said military pay would go up by 1 percent as well.

Obama actually sets the pay increase by presidential order but his budget, which comes out on March 4, sets aside the money for it.

Union leaders argue the planned increase is not enough to compensate for recent hardships endured by federal workers, who will see an estimated $120 billion in lower wages and benefits during the next decade due to the pay freezes, according to the American Federation of Government Employees.

"A 1 percent pay raise for federal employees who have seen more austerity than anyone else is pitiful. It’s time for the country to invest in all its workers, including the dedicated federal employees who protect and serve the American people,” Cox said.

Colleen Kelley, president of the National Treasury Employees Union, said a 3.3 percent increase is "fair and reasonable," and said union members would make their case before Congress this week, The Washington Post reported.

“I strongly believe that federal employees deserve more, and this amount is inadequate,” Kelley told the newspaper. "There is no question in my mind that inadequate raises will have consequences on recruitment and retention.”

An Obama administration official, speaking on the condition of anonymity, told the Post the budget would include "other measures important to ensuring that federal employees are fairly compensated and have the training and tools needed to succeed."

The official said the increase for federal workers "reflects the tight budget constraints we continue to face" and "recognizes the sacrifices they have already made through prior pay freezes, reductions in awards and furloughs due to sequestration last year."

Obama recently signed an executive action increasing the hourly minimum wage for federal contractors from $7.25 per to $10.10 in an effort to spur Congress to take up a bill to raise the federal minimum wage by the same amount, over two years.

The Associated Press contributed to this report.

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