Nashville’s homeless express their experiences living without a "…sanctuary called housing" George Walker IV / The Tennessean
Nashville’s high cost of living is making it harder to find federal workers and to keep them on the job.
(Photo: Larry McCormack / The Tennessea)
WASHINGTON – Paul Schindler was eager to experience life in another part of the country, so he left Denver late last summer for a job at the U.S. Army Corps of Engineer’s office in Nashville.
“I heard good things about the town,” he said.
He hadn’t heard about the city’s high cost of living.
Schindler, 29, quickly realized he could not make ends meet on his $41,000-a-year salary, so he ended up taking a second job at a liquor store. He works there 25 to 30 hours a week, in addition to his regular 40-hour work week as a corps real-estate specialist, so he’ll have enough money to make the rent, pay on his student loans and put food on the table.
The financial challenge that Schindler is facing living and working in Nashville is consistently cited in surveys as a problem for other federal workers in the area: Their salaries are not keeping pace with the city’s rising cost of living.
And they are asking the federal government to do something about it.
A coalition representing nearly 9,000 federal workers in Nashville and the surrounding area has requested that President Donald Trump’s administration establish a special “locality” pay rate for the region because of its high cost of living.
If the request is approved, salaries for federal workers in 14 Middle Tennessee counties would jump by as much as 12 percent to bring them in line with pay for comparable jobs in the region’s private sector.
“Nashville is a tremendous place to work,” said Eric Crafton, chief of the management and disposal branch of the corps’ real-estate division. “But at the end of the day, I have to be able to live.”
Crafton, who is heading up the locality pay initiative, traveled to Washington in April and made the case for the salary adjustment before the Federal Salary Council, an advisory board that is tasked with reviewing how much of a raise federal employees should receive based on where they live.
The board did not act on the request but seemed sympathetic to the workers’ concerns. Crafton has been invited to make another presentation at the board’s next meeting this fall.
Why Nashville’s federal workers don’t get ‘locality pay’
Right now, 45 cities across the country have special locality pay rates that boost the salaries for federal workers in those areas to close the gap between what they earn and what private-sector workers there make for doing comparable work. The pay adjustment is in addition to the across-the-board pay raise given to all federal employees.
Nashville doesn’t qualify for locality pay, however, because of the complicated formula the government uses to determine eligibility. But federal employers in the Nashville area argue that formula is flawed and that when a different methodology is applied, the region meets the criteria to receive a locality pay designation.
The salary council agreed at its April meeting that the formula should be re-examined, giving Crafton hope that a locality pay adjustment for Nashville would eventually be recommended and approved.
“I’m cautiously optimistic,” he said.
The campaign to establish a special locality pay rate for Nashville’s federal workers took root last October, when 28 federal agencies in the area combined forces to study why hiring, employee retention and mission execution had become such a problem over the past five years.
The coalition represented employees from a wide range of federal agencies, including the Agriculture Department, the Environmental Protection Agency, the Internal Revenue Service, the General Services Administration, the Department of Homeland Security, and Immigration and Customs Enforcement.
The study resulted in a 96-page report that concluded Nashville’s economic boom and low unemployment rate have contributed to a large gap between federal and private-sector salaries. Managers at federal agencies say the wage gap has seriously weakened their ability to recruit and retain high-quality job candidates.
The Corps of Engineers’ Nashville District, for example, reported an 11.8 percent vacancy rate last August. The Agriculture Department wrote in January that it was having trouble filling biologist and agronomist positions because of a limited number of applications, which it attributed to the region’s high cost of living.
Crafton said it took him nine months to fill a vacant job in his division. The first two candidates he offered the position declined because of the cost of housing and other expenses. The third candidate finally took the job, but only because he had relatives in the area and was willing to make the financial sacrifice to be close to his family.
“That was one branch in one division in one agency,” Crafton said. “You multiply that across all divisions in all agencies, you probably have a thousand stories just like that. Or hundreds of stories anyway.”
Study: Nashville’s federal workers would be better off in other cities
Employee retention has been a persistent problem because federal workers in Nashville often move away to other cities where their take-home pay will go a lot further. In some cases, they can take the same job in another high-cost area and still end up earning $10,000 to $15,000 more a year because of the locality-pay adjustment in that region.
The coalition study looked at 27 other areas that have special locality pay and concluded that federal workers in Nashville would be financially better off in 18 of those cities, including Houston, Detroit, Cincinnati, Dallas, Indianapolis and Atlanta.
“In other words, our cost of living is so high that we’d be better off moving,” Crafton said. “So that’s what we’re seeing. Everybody is moving.”
Those who choose to stay often live 45 minutes outside of Nashville, where housing is more affordable. “The feedback we are getting is everyone loves Nashville – they think of Nashville as an exciting place,” Crafton said. But, “a lot of people are having trouble making ends meet.”
To determine locality pay eligibility, the federal government looks at 22 occupational categories and uses them to establish one annual mean wage for federal workers in the region and another for the private sector. Areas where the disparity between public and private salaries is greater than 5 percent are eligible under federal law for a locality pay designation.
Federal agencies in Nashville argue the methodology is flawed because it doesn’t take into account that much of the city’s workforce is in the tourism and hospitality industry. The end result is not an apples-to-apples comparison because, unlike the private sector, federal agencies don’t hire waitresses, tour guides and hotel clerks.
When the salaries for those types of jobs are thrown into the mix, the annual mean wage for the private sector is skewed downward, leaving the impression that the disparity between federal and private wages in the area is negligible.
Under that formula, “Nashville may never measure up due to our hospitality-centered economy,” Crafton said.
A different formula, however, produces vastly different results. The coalition study found that, of the 22 occupational categories used to determine locality pay eligibility, just 12 closely lined up with jobs in the federal government. When the annual mean wage is calculated using just those dozen categories, federal wages fall 12 percent below private-sector salaries.
Crafton thinks that’s a more accurate analysis of the pay gap in Nashville and hopes to persuade the Federal Salary Council this fall to use that alternative formula when weighing the region’s locality pay request.
He has an ally in his quest.
The National Treasury Employees Union sympathizes with Nashville’s federal employees and their families “who find it harder to keep up with the bills because the city does not qualify for increased locality pay under the current federal wage system,” said the group’s national president, Tony Reardon.
“Federal employees in higher-cost cities like Nashville deserve a salary that keeps their important government jobs competitive with their private sector counterparts, and we support a review of the locality pay formula to ensure it is accurate and fair,” Reardon said.
For federal employees like Schindler, a boost in pay could be life-changing.
“That would mean I could put in my two weeks’ notice at my part-time job immediately,” he said. “That also means I have a lot more free time to myself. I could pursue graduate school if I wanted.”