President Barack Obama wants to limit raises of federal government employees to 1.4 percent–far less than the 4 percent raises most New York State workers expect in the coming year.

In New York, raises are determined by negotiations with public employee unions. On the federal level, the President proposes salary increases in his budget, which Congress must approve.

As the Washington Post reports of the proposed 1.4 percent hike for the 2011 federal fiscal year:

It’s a tiny increase, particularly compared with this year’s 3.4 percent increase for the military and 2 percent raise for civilians. But when one in 10 workers can’t find a job, it doesn’t look so bad. The 1.4 percent, “frankly, I think to a lot of Americans, sounds pretty good,” Peter Orszag, director of the Office of Management and Budget, told reporters….

Orszag added that the raise “reflects a formula that is used to compute wage and salary increases, and is lower than it’s been in the past because inflation is lower than it’s been in the past.” Federal raises are not tied directly to inflation but are linked to private-sector wage growth.

In contrast, most unionized New York State employees got a 3 percent raise last April and are due for a 4 percent hike this April. (Some unions are still locked in contract negotiations.)

In both years, unions rejected Governor David Paterson proposal to freeze wage increases as well as defer five days of pay.

Last March, Paterson threatened 8,900 layoffs, but the unions did not budge. Eventually, the two sides agreed to a $20,000 severance package to encourage 4,500 workers to quit their jobs or retire. The unions also agreed to not oppose a tepid pension reform affecting none of their current members. Paterson agreed not to layoff members of two unions until December 31, 2010 (here).

The severance deal fell far short of its 4,500 employee goal. The Albany Times Union today reports only 1,008 employees took the $20,000 and left.

“All told, the buyouts represent more than $58 million in salaries,” according to the paper, which did not report fringe benefit savings.

Once a buyout was given, the job held by that individual was supposed to be abolished, a condition that some observers said may have inhibited agency commissioners from letting too many people go. Additionally high unemployment in the private sector may have prompted some state workers not yet at retirement age to stay put.

On its Capitol Confidential blog, the Times Union lists the names, salaries, job titles and agencies of employees who voluntarily took the $20,000 severance.

Originally Published: NY Public Payroll Watch