Tuesday, August 2, 2011

GAO report on Overseas Comparability Pay Misses a Few Points

I recently read the GAO report on Overseas Comparability Pay (found at http://www.gao.gov/htext/d11772r.html) and, as a Foreign Service family member, would like to point out a few things.

First, hardship pay and danger pay were implemented before locality pay was instituted back in 1990. As far as hardship pay goes, the intent was to provide financial incentive and compensation for Foreign Service Personnel and their family members agreeing to live in situations that are more difficult than living in the US (i.e., unsanitary water supply, food supply, etc.; lower quality medical assistance; exposure to parasites and diseases not present in the US, unreliable power and water supplies). And, danger pay was implemented to compensate for living in situations where personal safety is in jeopardy due to civil unrest, high crime with little host country security forces or corrupt ones, etc. . . .

When locality pay was enacted in 1990, it gave federal employees living in DC (and the US in general) more base pay than those overseas. That percentage grows almost every year. It is to the point where our base pay in DC is more than our pay, with hardship incentive, would be living in a country like Dakar, Senegal and many other similar posts. In Dakar, for example, Malaria is a real concern, health facilities are lacking and not up to par with the US; employees and family members (including young babies and children) are required to take Mefloquine (an exceptionally questionable drug) that we are told is still better than getting Malaria; manga worms (a worm, that unbeknownst to you, lays eggs on your skin, which then hatch right out of your skin) are a part of life, especially for kids and pets. We don't have access to US style grocery stores, food establishments, and products and those we do have access to are very expensive. So, given the choice of taking a posting in DC or living in Dakar, which would you choose - 10% less pay, including all the "incentives" to live in Dakar, or stay in DC?

The whole point of incentive pay was to provide an INCENTIVE. To use those incentives as a way to help equalize us with DC pay goes against the intent of why they were created in the first place. And, as locality pay rises almost every year, there becomes less and less incentive to serve in hardship posts. Do you really think taking a pay cut to serve in West Africa is really an incentive to go there?

In 21 years, locality pay has risen to 24%. What happens as it raises more? Our "incentives" to serve in hardship posts become less and less. If you take away OCP, make no mistake, with each passing year and rise in the locality pay, you are increasingly taking away incentive to serve in hardship posts. Even those of us who seek hardship posts, will be hard-pressed to do so when it means a significant pay-cut to do so.

As far as COLAs go overseas, we see no profit from those amounts. The COLAs exist because the cost-of-living is so much higher than compared to the DC area. Every cent we receive in COLA goes toward paying the higher cost of living in whatever country we are in. I think that GAO completely failed to take that into account.

Remember that incentive pays (such as hardship and danger pay) preceded locality pay by many years. When implemented, it WAS the intent to provide INCENTIVE for serving in less desirable locations. This incentive is eroding; help fix it in one way or another. Something must be done to ensure that the intent of incentive pay is preserved as it has been for our Senior ranks.


Anonymous said...

Interesting post, and perhaps some valid points. However, it should also be noted that when one is overseas, one enjoys a number of benefits that one does not receive in DC: housing, all utilities paid, R and R air tickets for employee and family members, etc. Rent/mortgage payments in DC are very high , so the locality pay is a great assistance to those posted there.

Lynne said...

R&R largely brings us "home", where we would not have to spend thousands of dollars to get there if we lived there. Also if we lived in DC most of us would have a dual income family - the pre-FS salary of all the EFM I know were more than rent! Oh yeah, and nobody's pet dies of unknown tropical diseases, and nobody has to worry about their children dying of the same, in DC. Just going back to the blogger's INCENTIVE argument about hardship pay.

Most of the arguments that tell us to shut up because we receive so many "benefits" are unfortunately uninformed.

The Stone Rabbit said...

Locality Pay was instituted to bring federal workforce salaries up to par with their private sector counterparts, not as a COLA for housing.

The real question should be...what would someone make (in total compensation) in the private sector who has the same job responsibilities and (in the case of the Foreign Service) requirements for overseas availability, with the same skills and similar educational background?

Have you ever seen the compensation packages for our American private sector counterparts living overseas? I'm not saying we expect all of that. However, I am saying that if you look at the intent of locality pay, then we definitely should be getting locality pay as well.

Please remember that incentive pay was always meant to be an incentive. And, locality pay was always meant to be a way to ensure federal workers were receiving comparable pay and benefits as their private sector counterparts.

The intent of these laws are clear. So, if you want a COLA for DC housing, then lobby Congress for such a COLA. If you don't like locality pay, then lobby Congress to get rid of it for everyone. But, stop targeting the Foreign Service.

The Stone Rabbit said...

A thought just occurred to me. Since so many folks seem to think we receive benefits we don't receive, let's give us those benefits in replacement of locality pay.

First, allow overseas federal workers the same exemption as other overseas Americans on their income taxes, we do not qualify for the simple reason of being a federal worker.

Second, provide each employee with a car and driver. We do NOT get this!!!! We are allowed to ship in one car per family. And, we buy the car with our own money, insure the car with our own money. If we want a second car for our family, we ship it in at our own expense or have to buy at highly inflated prices locally.

Third, actually provide for lodgining costs on home leaves and R&Rs. When we go home for these things, we have to pay for our own temporary lodging. This is NOT provided for us.

Those are just some of the things folks think we get that we don't. And, I assure you, they would be far more costly than locality pay, which we deserve based soley on the principals of why locality pay was created - to match the salary and benefits of our US citizen private sector counterparts (who, by the way, largely do get those things listed above when posted overseas).