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Breaking Down the 2026 Federal Pay Raise and Pay Parity
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Jun 15, 2025
Curious about the 2026 federal pay raise? In this video, we break down the latest updates and discuss how "pay parity" could play a key role in advocating for a higher raise for federal employees. Stay informed with all the essential details—watch now to get the full scoop! Related Articles Pay Parity May Be a Good Argument for the 2026 Federal Pay Raise https://www.fedsmith.com/2025/06/03/pay-parity-may-be-good-argument-for-2026-federal-pay-raise/ What is the Difference Between the COLA and Pay Raise? https://www.fedsmith.com/2024/10/16/difference-between-cola-and-pay-raise/ Chapters 0:00 Introduction 0:49 Status of 2026 Federal Pay Raise 1:41 What is Pay Parity? 3:36 Is Pay Parity an Effective Argument? 4:38 The Annual Pay Raise Process 5:00 FAIR Act 6:16 Pay Raise Political Process 7:54 Conclusion
View Video Transcript
0:00
hello everyone Ian Smith here with
0:02
fedsmith.com here to talk to you about
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the 2026 federal pay raise is it too
0:08
early to talk about next year's pay
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raise i don't think so apparently not
0:13
because we're talking about it the
0:15
topic's out there it's floating around
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and hard to believe but we're already
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halfway through the year we're into June
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now year will be over before we know it
0:25
and honestly this topic comes up even
0:28
before now but it has been picking up
0:31
some steam here lately so I thought I'd
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talk to you about what next year's pay
0:37
raise is looking like for federal
0:38
employees and also to talk to you about
0:41
pay parody and how that ties into the
0:44
2026 raise and why you're likely to hear
0:47
the pay parody argument this year so
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here we go as of right now the White
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House put forth its budget back in May
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for 2026 it's it's a budget blueprint
1:01
and that typically will kick off part of
1:04
the the pay raise discussion process in
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the spring when the budget request comes
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out and this year's budget request is
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silent on a pay raise for federal
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employees in 2026 most people are
1:17
assuming that what that means is that
1:20
the president is not proposing a pay
1:23
raise for federal employees next year
1:25
however he has he the president and the
1:29
white house in the budget blueprint have
1:32
put forth a raise for members of the
1:35
military of
1:37
3.8% so that's where the pay parody
1:40
argument comes in what is pay
1:43
parity this is the notion of paying
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federal employees equal with members of
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the military in any given year and the
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reason it's likely to come up this year
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is because of this obvious discrepancy
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between the raises that have been put
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forth assuming they come to fruition the
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White House appears to be proposing no
2:06
pay raise for federal employees next
2:07
year and it has proposed a 3.8% raise
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for members of the
2:12
military some are going to argue this
2:15
isn't fair federal employees are getting
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shafted and so they need to be equal to
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keep it fair and so it could be an
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effective argument in a year like this
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when there's such a glaring discrepancy
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between the two figures the groups that
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you're most likely to hear this argument
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come from are federal employee unions
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since they represent the interests of
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federal employees as well as lawmakers
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and if you do hear it from any members
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of Congress it's likely to be ones who
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represent the DC metropolitan area
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because a lot of federal employees live
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in that area they are those lawmakers
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constituents and so they're going to
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want to curry favor with the voters in
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that area as you can probably imagine
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this is something that would be even
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more likely to come up in an election
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year obviously it's not an election year
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but given that this is all part of a
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political process that is based on
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politics you could see why it might be
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that way as an example last year there
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was a group of lawmakers who sent a
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letter to President Biden in December
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and uh they were pushing him to more
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than double the 2% raise in 2025 he had
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proposed for federal employees to make
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it equal with the 4.5% raise that was
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being given to members of the
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military ultimately didn't work out that
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way as you know federal employees got a
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overall average 2% raise this year is
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pay par an effective argument the best
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way to address that question is to look
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at historical pay raise figures i have
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analyzed data going back to 2003
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comparing pay raise figures with members
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of the military to federal employees and
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in that time period there were 10 years
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when federal employees had smaller
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raises than members of the military
4:00
there were no years when federal
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employees had higher pay raises but
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there were 13 years when the pay raises
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were
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equal so at least on that basis it has
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mixed results but yeah it may it may not
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be a bad argument because again the
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majority of those years the figures were
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equal i've written an accompanying
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article that goes with this video that's
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got that table in it i'm not going to
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put it up on the screen here it's too
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much data it would get cluttered in the
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video I think but I will include a link
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to that article in the description so if
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you'd like to take a a more in-depth
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look at that please check it out now to
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tie all this together you've got to look
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at how the pay raise process works how
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it unfolds every year like I said it's
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mid midway through the year we're in
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June now when I'm recording this we're
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already talking about next year's pay
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raise the topic honestly though comes up
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earlier as I said sometimes as early as
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January or
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February for instance there's a bill
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that was proposed earlier this earlier
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this year by Congressman Jerry Connelly
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and Senator Brian Shadz from Hawaii and
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they put forth a 4.3% raise for federal
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employees this is a tradition that the
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two have every year going back I've
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forgotten how many years they've been
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doing it now i think it's nine or 10
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years at least they introduced this bill
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very early in the year to
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um propose a a higher raise for federal
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employees for the coming year than what
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they're likely to otherwise get however
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this bill has never become law in all
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the years it's been introduced and I'll
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go ahead and make a prediction now it's
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not going to happen this year either
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just looking at the historical track
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record on it as you probably know
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Congressman Connelly passed away
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recently i don't know what that will
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hold for the future of this bill if
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somebody steps in in his place and it
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starts being introduced uh next year
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about the same time or perhaps Senator
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Shatz will introduce it on his own i
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don't know that will be interesting to
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see what happens with that next year in
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terms of how it fits into the federal
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pay raise process the pay raise is
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determined each year by a political
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process it's not based on an automatic
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formula so it can vary from year to year
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and it does vary from year to year based
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on the political climate it's not to be
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confused with a COLA sometimes I'll hear
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people refer to the annual pay raise for
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federal employees as a cola it's not
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it's different cola stands for cost of
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living adjustment that only applies to
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federal retirees to their annuity
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payments that is based on an automatic
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formula and it's computed automatically
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every year based on the cost of living
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the
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CPI but at any rate that's a side note
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the way the the pay raise process
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unfolds each year is the White House
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will usually propose a raise early in
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the year via the budget blueprint
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congress can get involved they can set a
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raise that overrides what the president
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is suggesting by passing legislation
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that sometimes happens but it's not the
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norm usually whatever the president
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proposes is what ultimately comes to
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pass and then the president in August
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will issue what's called the alternative
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pay plan letter and that's when the
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proposal for a raise is formalized a bit
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more but it doesn't become final until
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December um the president will issue an
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executive order formalizing the raise at
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that point and that directs the office
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of personnel management to go ahead and
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process the raise and issue the the pay
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tables for the coming year showing what
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the raise is and how it impacts annual
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salaries that's a basic overview of the
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annual pay raise process the current
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status on the 2026 pay raise and also
8:02
pay parody and how it ties in to the
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situation this year like I said given
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the situation I think you're likely to
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hear this argument come up and that's
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why and that's what pay parody is and
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how it applies here i hope you found
8:16
this video helpful be sure to subscribe
8:19
to the channel for more updates on this
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and other topics when this process
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unfolds throughout the year and more
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information becomes available we'll be
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posting more videos as well as articles
8:29
on the fedsmith.com website so please be
8:32
sure to check them out have a good day
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