Vol. 74/No. 47      December 13, 2010

Congress will be asked to give the pay freeze a stamp of approval. Workers were scheduled to receive a 1.4 percent pay increase in 2011.

This will be the first across-the-board two-year pay freeze for federal workers in modern U.S. history. There was a one-year freeze in 1986. Federal workers already face a 7.2 percent increase in health insurance premiums next year and a cut in their transit subsidy by half, amounting to an overall pay cut.

The president’s announcement sends a message to workers and farmers more broadly that austerity measures will deepen. And workers will be pressured into accepting cuts in their standard of living as a part of “putting people back to work,” as Obama cynically told the press.

Jeffery Zients, deputy budget director and the government’s chief performance officer, said initial savings for the government would be $5 billion over two years, but because in future years federal workers’ salaries would begin at a lower base, workers will lose $28 billion over five years.

At his press conference, Obama reminded reporters, “From the earliest days of my administration, we’ve worked to eliminate wasteful spending and streamline government. I promised to go through the budget line by line to eliminate programs that have outlived their usefulness.” His administration has already ended or curtailed 121 programs, many of which benefit working people in one way or another.

Editorials in major dailies backed the move. “The symbolic effect of showing that government can discipline itself is … important,” said the Washington Post. “In an era that will call for shared sacrifice, when governors and county executives are freezing pay and furloughing workers and many private-sector employees have lost their jobs, it’s not unreasonable to expect federal workers to bear a share.”

Pitting public workers against those with private employers, the Wall Street Journal applauded Obama’s actions “as a small but symbolic first step toward reining in a ballooning federal payroll that is a slap at the non-government workers who pay the bills.”

The Journal, however, called on Obama to make his pay freeze an “opening bid” in a campaign of austerity and layoffs directed at government workers.

“I never expected that this administration would look at this problem and think the solution was cutting wages,” said John Gage, president of the American Federation of Government Employees.

The announcement of a pay freeze for government workers comes at the same time that emergency federal assistance for 2 million workers who have been unemployed long-term runs out. Nearly 42 percent of the 15 million without jobs across the United States have been without jobs for six months or longer. By official figures there is one job opening for every five workers unemployed.

Workers face lower wages, speedup, layoffs, and benefits cuts. Meanwhile, the U.S. Federal Reserve Board added another $600 billion into the banking system earlier this month to ensure bankers and bondholders maintain their profit margins.
 
 
Related articles:
Workers in Ireland protest gov’t austerity
Capitalists press wage cuts, layoffs
Who’s sharing in the sacrifice?
Official inflation is flat; food, energy prices rise  
 
 
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