'Critical employees will begin to retire': Trump’s new pay plan will deny most federal roles a raise, and it has workers warning of a retention crunch | Fortune
Trump's Budget Proposal Sparks Concerns over Federal Employee Retention
The Trump administration’s 2027 fiscal budget plan has ignited debate over the future of key civilian federal workers such as air traffic controllers, IRS tax auditors and food‑safety inspectors. While the proposal leaves these employees without a salary increase for the coming year, it earmarks a 5% to 7% raise for military personnel as part of a broader push to “rebuild our military’s readiness and capabilities.” The contrast arrives amid a rise in inflation from 3% to 3.4% since President Trump assumed office in January 2025.
Military Pay Raises Contrasted with Civilian Pay Freeze
In a letter addressed to House Speaker Mike Johnson last week, President Trump confirmed that civilian federal staff would see no pay bump next year, attributing the freeze to the higher inflation experienced during the Biden administration. He argued that granting a large raise while many Americans still feel the impact of what he called the “Biden Administration’s giant inflation spree” would be unfair. Trump maintained that the decision would preserve fiscal responsibility without jeopardizing the government’s capacity to recruit and retain qualified personnel.
Long‑standing Retention Worries
Federal workforce retention has been a persistent issue. A 2014 RAND analysis found that permanent pay freezes from 2011 to 2013 reduced retention among Department of Defense civilian employees with bachelor’s degrees or higher by 7.3%. More recently, the nonprofit Partnership for Public Service reported that the Department of Government Efficiency’s deferred resignation program (DRP) accounted for roughly 40% of government departures last year, often resulting in vacancies being filled by less‑experienced staff and eroding institutional knowledge.
Union Pushback on the Freeze
Labor groups representing federal workers warn that the freeze could accelerate attrition and increase long‑term costs for the government, which would need to rehire and retrain for specialized positions. NARFE National President William Shackelford called the policy “more work for less pay,” saying it would drive high‑performing employees out of public service and degrade the quality of government services. He cautioned that without meaningful compensation, agencies will face higher expenses and reduced effectiveness.
Aviation Safety and Air Traffic Control at Risk
The Professional Aviation Safety Specialists (PASS), representing about 11,000 FAA employees, expressed alarm that a pay freeze would hamper recruitment and delay modernization of the nation’s air‑traffic control system. The FAA has long struggled with a shortage of controllers and aging equipment, even resorting to purchasing spare parts on eBay. Earlier this year, the Department of Transportation launched a campaign targeting Gen Z gamers, adding 2,000 new controllers. PASS President Dave Spero warned that stagnant wages could deter new hires and prompt seasoned staff to retire, slowing progress on critical safety initiatives.
Potential Consequences for Government Operations
The Office of Management and Budget declined to comment on why some federal workers receive raises while others do not. According to the Office of Personnel Management, 271,566 employees have left the federal government since the start of the Trump administration. Critics argue that the pay freeze could further strain the ability of agencies to retain and attract essential talent, ultimately affecting the delivery of services to the American public.
Source: fortune.com · 2026-09-02