AFSANET: Crossing the Rubicon on the Overseas Pay Gap - January 11, 2008

From AFSA President John Naland (naland@afsa.org)

1.  With the stroke of a pen on January 3, President Bush approved the 2008 federal pay adjustment raising the Washington D.C. locality pay rate from 18.59 to 20.89 percent.  With that adjustment, the Foreign Service overseas pay disparity jumped to 20.89 percent.  Thus, a mathematical "Rubicon" has been crossed as Foreign Service members now take a pay cut to serve at 20 percent hardship differential posts such as Damascus, Tripoli, Sarajevo, Chisinau, Libreville, Cotonou, La Paz, and Ulaanbaatar.

2.  All tolled, Foreign Service members now take a pay cut to serve at 183 of 268 overseas posts (68 percent).  At this rate, within three years, another 42 posts -- those at the 25 percent hardship level without an additional danger pay supplement -- will be passed unless this overseas pay disparity is corrected by Congress.  The Senior Foreign Service no longer suffers from this inequity due to the 2004 implementation of pay-for-performance for senior executives government-wide.

3.  Some outsiders have asked for proof that this overseas pay gap is having a real world impact on Foreign Service morale.  AFSA now has that proof.  While no one joins the Foreign Service to get rich, we who joined out of patriotism and a desire to serve our country have now come to realize that we are being taken advantage of.  AFSA's recent electronic survey of 4,311 State Department Foreign Service members shows that only three percent do not see this as a problem needing to be fixed.  In fact, an overwhelming 70 percent attach "high" important to correcting this pay disparity.  Another 21 percent attach "moderate" importance.  Presented a list of ten problems facing the Foreign Service, fixing the overseas pay disparity was ranked as the number one problem by survey respondents.  Survey results are in AFSA News in the January 2008 Foreign Service Journal and online at <http://www.afsa.org>.

4.  This ever-growing financial disincentive to serve abroad is simply not sustainable.  Now, the financial "reward" for five years spent abroad is the loss of the equivalent of one year's salary.  That has serious long-term impacts on such things as savings for retirement and children's college funds -- especially for the many Foreign Service families who also suffer the loss of income from a spouse who cannot find employment overseas.

5.  Further delay in fixing the overseas pay disparity would put in jeopardy the long-term health of the Foreign Service and, with it, the future viability of U.S. diplomatic engagement.  There will inevitably come a point -- if it has not already -- when the overseas pay disparity starts to hurt recruitment.  There will inevitably come a point -- if it has not already -- when this disincentive starts to increase attrition.  There will inevitably come a point -- if it has not already -- when employees who are eligible to do so start submitting onward-assignment bid lists that contain only domestic positions.

6.  Statistical proof that those tipping points have been reached will only come after the damage has already been done.  Waiting for such proof would result in a hollowed-out Foreign Service that would take years to rebuild.  The Foreign Service would forever loose the talented applicants who went elsewhere.  Mid-level employees who resigned or retired rather than wait for the long-delayed legislative fix would not come back.  An assignments cycle in which most bidders put in for only domestic assignments would be a disaster.

7.  We strongly believe that the overseas pay disparity must be ended this year.  AFSA believes that goal can be reached, but it is far from a sure thing.  Success will require leadership.  AFSA is doing all that it can.  We have reported on our ongoing efforts in a steady stream of AFSA President Update messages (back issues are online at <http://www.afsa.org/president-update.cfm>).  This week, we managed to get the pay problem highlighted in a January 8 Washington Post article (<http://www.washingtonpost.com/wp-dyn/content/article/2008/01/07/AR2008010703030.html>) which said, in part:

"The top concern among [Foreign Service survey] respondents was the ineligibility of those working overseas to earn "locality pay," the geography-based salary adjustment that federal employees receive as compensation for the public-private sector pay gap.  In the Washington area, the 2008 amount is 20.89 percent of base pay.  Although other services with overseas deployment, including the military and the intelligence community, receive equivalent "comparability pay," the Foreign Service does not.  The director general's statement said that "pay modernization is a high priority of the Secretary and her management team.""

8.  AFSA welcomes Director General Harry Thomas' determined engagement on this issue.  His December 19, 2007 worldwide message entitled "Whither Efforts to Close the Pay Gap?" outlined his advocacy efforts and plans, along with those of Under Secretary for Management Patrick Kennedy.  AFSA warmly applauds those vital efforts, as we do the efforts by Secretary of State Rice and other senior officials to maintain White House backing for moving forward on this issue.  As AFSA has stated before, we believe that strong advocacy on Capitol Hill by senior State Department officials is crucial to success.   

9.  AFSA officers had an extremely positive meeting with Deputy Secretary of State John D. Negroponte on January 10.  Ambassador Negroponte, himself a 37-year Foreign Service veteran who has served at eight different posts on three continents, said that he was acutely aware of the need to end the overseas pay disparity.  He strongly reaffirmed the Department's determination to work to rectify this inequity.  Under Secretary Kennedy and Director General Thomas joined in that constructive discussion of this key issue. 

HOW YOU CAN HELP

10.  To succeed, we will need all of the help we can get.  Thus, AFSA encourages its members to raise Foreign Service compensation with Members of Congress and their staffs when you encounter them as part of Congressional delegations.  We can cite cases of lawmakers agreeing to co-sponsor our pay modernization legislation as a result of hearing personal testimonials while visiting an overseas post.  If (as we have heard) some Ambassadors and DCMs think that it is somehow not proper to raise this diplomatic readiness issue with CODELs, please re-read the Director General's cable which says that ending the overseas pay disparity "remains our highest management priority."

11.  We also encourage our members and their spouses to write individual letters to members of Congress to explain the problem (all such efforts, of course, should be done speaking in your private capacity while off-duty).  We have posted an updated two-page Question and Answer document on <http://www.afsa.org/OCP2008Jan.pdf> to assist such advocacy. 

12.  That being said, what individual letters most need to express is how this problem impacts you on a personal level.  While we deeply appreciate those Members of Congress and staff who already understand this problem and are supportive of efforts to fix it, many on the Hill (the folks we need to move) have no means to visualize what it means to spend two thirds of a career serving overseas.  They need to hear about the sacrifices that we and our families make to serve overseas.  Here is a hypothetical example:

"When I transfer overseas, my family loses the income from my spouses' $50,000 a year job. That reduces our retirement and children's college fund savings.  We transfer from a house with potable water and reliable electricity to one with frequent power outages.  The renters of our house do not cover our mortgage payment, so we must continue to pay nearly $1,000 a month to keep from losing the home that we someday hope to retire to.  We take our children out of a great school system and put them in one that causes them to fall behind.  My family must take malarial suppressants to keep from getting sick.  Preventing a 21% pay cut in my salary is small compensation for the very real sacrifices we make as a family to go overseas."

13.  If you do wish to join in this effort, please contact AFSA’s Legislative Director Ian Houston at <houston@afsa.org>.  He can advise you on which Member of Congress to write to and give you additional suggestions on the best arguments to make.  Also, AFSA would like to get copies of these letters so we can feature sanitized versions of the most evocative ones in our ongoing advocacy efforts.

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