Overseas Pay Gap for Foreign Service Officers Closing?

Although I am not yet a Foreign Service Officer, I just read something that I believe indicates I may just earn more money when I do.

As a part of this"pre-employment" process, I had to agree to a salary based off of what I earned in my last job. Yeah, the job I had before I didn't have a job. So, anyway, I agreed to the salary pretty quickly because USAID put a 15 day expiration date on it - which scared me - and the amount was adequate for what Brooke and I would require to live that particular lifestyle.

However, this salary is misleading. In the Foreign Service, you earn this "base salary" only while you are OVERSEAS. Conversely, while you are serving in Washington DC (for training and whatnot), you earn a locality pay like any other Federal employee. That way it works is that each Civil Federal Employee earns a salary, based on their pay-grade, which is then adjusted for the cost-of-living in the locale where they work. This locality pay is currently 23.1% in Washington DC. To give you a better idea, locality pay for a Federal Employee in New York is 27.86% while Miami-Ft. Lauderdale is only 20.21%.

In terms of how this would affect us, remember that I would have to serve from time-to-time in DC. During these times, under current rules, I would earn 23.1% more over my negotiated base salary. So, while I was serving overseas - in Timbuktu for instance (see below) - I would incur a de facto 23.1% pay cut under what I would make while we are in the States. This pay differential is called the "Overseas Pay Gap" within Foreign Service circles.

Now, when a USAID Foreign Service Officer does go overseas he/she would receive other benefits such as "Housing Allowances" and "Education Allowances" to make the overall package worthwhile. However, even with these "benefits", this pay differential still acts as a disincentive to serve overseas while other Federal employees are making locality pay 100% of the time. If you are still interested, a more detailed (very easy to read) explanation of the debate can be found here.

So, in what way is the Overseas Pay Gap closing?

As of June 2009, new legislation has passed the Senate and House which would go ahead and match the the 23.1% DC locality pay bonus for Foreign Service Officers when they are overseas. Apparently, President Obama is very predisposed to signing this legislation into law. Good news!

Supposedly, the American Foreign Service Association (AFSA) has been pushing for legislation to close this gap for about 14 years. The Pay Gap developed as an unintended consequence of inflation (and neglect) ever since the Modern Foreign Service was founded in 1924. I guess AFSA had found out that the CIA,, FBI and DEA had closed their own overseas pay gap years ago and now the diplomats were the only ones getting screwed.

More detailed information about the legislation can be found here.

Overall, I think this is great. We haven't even gone through all the clearances yet and I conceivably could already have a raise. Sweet.