The president of the union representing federal workers on the Rock Island Arsenal said a two-year pay freeze is a disappointment and will leave workers with less money in their pocket because of rising health insurance costs.
President Barack Obama proposed the freeze for fiscal years 2011 and 2012 on Monday, something congressional Republicans have been calling for. The administration says it will save the government $2 billion this fiscal year and $28 billion over the next five fiscal years.
In the Quad-Cities, the freeze will have the most impact at the Arsenal, where there are nearly 6,200 federal civilian employees.
However, there also are postal workers and other federal workers throughout the region who will be affected.
Uniformed military are excluded from the freeze.
“People are upset,” said Tom Esparza, president of the American Federation of Government Employees, Local 15, which represents 3,500 Arsenal workers. “Their take-home pay is going to go backward.”
He said employee insurance costs are rising faster than the pay raises they have received and that there are other areas in the Defense Department to save money outside of pay.
The federal government paid $300 million in wages and salaries to workers in the four-county Quad-City metropolitan area in fiscal year 2009, according to Commerce Department estimates. Most of it was from the Defense Department.
That’s a lot more than elsewhere in Iowa, where there is little military presence and the bulk of federal salaries go to postal workers.
Still, an Iowa State University economics researcher said the freeze is likely to have a negligible effect on the Quad-City area’s economy.
Even a 3 percent raise would amount to just $9 million in an area with total personal income topping $14 billion in 2008, according to the federal Bureau of Economic Analysis.
“Nine million is a lot of money, but relative to your whole economy, it’s not that much,” said David Swenson, an associate scientist in Iowa State University’s economics department.
The money the government will save is just a slice of the $1.3 trillion annual deficit. But some conservative groups, such the Cato Institute, have called for a federal pay freeze for years, saying public-sector pay is growing faster than private pay.
Public-sector unions have disputed this.
A spokesperson for Rep. Bruce Braley, D-Iowa, said Braley was waiting to see the details of the proposal before deciding whether to support it.
Rep.-elect Bobby Schilling, R-Ill., said he supports the freeze.
Sen. Chuck Grassley, R-Iowa, said Obama’s announcement is an indication the president “heard part of the message from the grassroots” on Election Day.