This piece was originally published in The Journal of the Center for Policy Analysis and Research (JCPAR). Read it here. 

Introduction

For Black Americans, public-sector employment has historically provided a pathway to better, more equitable and secure job opportunities compared with available private-sector jobs. The federal government has played an especially vital role in establishing a robust Black middle class in the Washington, D.C. metro area. According to the 2023 American Community Survey, roughly 2 out of 5 Black adults in the D.C. metro area were college graduates, Black median household income was nearly $90,000 and the Black homeownership rate was 52.8%. Postal service jobs have been particularly valuable to Black workers without college degrees because of the uniform wage and benefit structure (all postal employees who have the same job title and job tenure are paid the same nationwide) and higher pay relative to comparable private-sector employment. With a minimum education requirement of a high school diploma, the median hourly wage of a postal worker is 43% higher than the typical high school graduate. While federal employment has opened the door to social and economic mobility for generations of Black Americans, it has often been the battleground and served as a compass in setting higher labor standards and equal employment policies in the United States.

Opportunity. Backlash. Resistance. Change: A brief history of Black federal workers

The history of Black workers employed in the federal government dates to the Civil War when the federal government hired its first Black employee in the Treasury Department in 1863. In time, the federal government quickly became the largest employer of formerly enslaved people, with large concentrations in the military and the U.S. Postal Service (USPS). By 1912, the federal government was the largest employer of Black Americans in the nation, including highly skilled Black workers who were hired in high-ranking white-collar positions.

One of the earliest actions aimed at weakening the position of Black federal workers came shortly after the inauguration of President Woodrow Wilson. In 1913, Wilson racially segregated the USPS and Treasury department—the first federal agencies to employ, and in the case of USPS, promote Black workers to management positions. The administrative practice of segregating the federal workforce extended to the demotion of Black civil servants from white-collar positions, at-will firings, and refusal to fill open jobs with qualified Black candidates. Later that year, a group of Black workers formed the National Alliance of Postal Employees, the first industrial union in the federal service, to resist the administration’s racist tactics.

In the 1940s and 1950s, Presidents Franklin D. Roosevelt, Harry S. Truman, and Dwight D. Eisenhower each issued executive orders that took measured steps to undo the overtly racist and discriminatory federal employment practices put in place by Wilson. Those orders were largely directed at national defense industries, armed forces, and government contractors in response to the demands imposed by World War II. But, throughout the 1950s and 1960s, civil rights activists pushed the federal government to do more to expand its hiring of Black workers. In response, President Eisenhower’s Executive Order 10590 established the President’s Committee on Government Employment Policy (PCGEP) in 1955. The PCGEP involved federal agencies more fully in the government’s anti-discrimination agenda and called for departments to develop regulations in accordance with its mission to stop all discrimination in all federal employment. However, the group lacked the enforcement power necessary to accomplish that mission.

Over the following decades, job prospects for Black federal workers were most improved by a series of executive actions and legislation introduced in the 1960s and 1970s. On March 6, 1961, President John F. Kennedy’s Executive Order 10925 required the federal government and federal government contractors to practice non-discrimination in their hiring practices. Additionally, E.O. 10925 established the President’s Committee on Equal Employment Opportunity (PCEEO) to monitor non-discrimination on government contracts. In a move that distinguished the PCEEO from prior ineffective, enforcement-lacking efforts like Eisenhower’s PCGEP, Kennedy granted policy-making authority to the group led by Vice President Lyndon Johnson and Secretary of Labor Arthur Goldberg.

On January 17, 1962, Kennedy signed Executive Order 10988 which allowed limited collective bargaining for federal employees for the first time and opened the door to federal employee union membership under three different classifications: informal, formal, and exclusive recognition. Public-sector collective bargaining would play a central role in maintaining the quality and accessibility of federal jobs through labor contracts that fostered transparency with clearly defined policies and pay structures. Labor contracts also served to limit discriminatory outcomes while providing critical protections and recourse against other forms of exploitation or mistreatment.

The power of Kennedy’s executive orders was reinforced when Title VII of the historic Civil Rights Act of 1964, signed by President Lyndon Johnson, formally prohibited employment discrimination in the United States and established the Equal Employment Opportunity Commission (EEOC) to enforce the law. The Equal Employment Opportunity Act of 1972 extended Title VII protections to cover more employers and strengthened the enforcement power of EEOC by allowing them to litigate against employers, including federal agencies, who violated Title VII.

Within the span of the 1960s and 1970s, the federal government had established a clear definition of what it meant to be an equal opportunity employer, leveraged its purchasing power to compel private contractors to meet similar standards, extended limited collective bargaining rights to federal workers, and assigned the EEOC a central role in enforcing anti-discrimination law. Black federal employees also continued to support and advocate for one another, establishing the non-profit organization, Blacks in Government (BIG), in 1975. The progress made during 1960s and 1970s would be gradually chipped away in the decades that followed. 

Federal job losses since the 1980s

During the 1980s, the Reagan administration took a swipe at federal employees, unions, and anti-discrimination enforcement, but that record pales in comparison to more recent developments. While Reagan announced plans to make federal job cuts, and infamously fired 11,000 striking air traffic controllers in the early 1980s, federal payrolls actually rose by more than 200,000 during his presidency before dropping by 427,000 during the 1990s and taking another hit of 244,000 between 2010 and 2014. Since the 1980s, the postal service, a major employer of Black workers, has been under sustained assault, including attempts to undercut employee compensation and the agency’s solvency.

In 2025, the Trump administration took steps to implement massive cuts to the federal sector and reverse course in the government’s pursuit of equity by rescinding at least a dozen prior executive orders related to racial and/or gender equality and terminating workers in DEI departments within federal agencies. In a series of legally challenged actions, Trump fired decisionmakers at the EEOC and National Labor Relations Board (NLRB)—rendering two independent agencies responsible for enforcing workers’ rights non-operational for several months—while his newly created Department of Government Efficiency (DOGE) made severe staff reductions and eliminated entire federal agencies. Trump’s attacks on the federal workforce have also included attempts to limit the approval of collective bargaining agreements with federal workers. The actions of Trump and DOGE contributed to the loss of 288,000 federal jobs between January and December of 2025, based on data from the Bureau of Labor Statistics. Ironically, while federal jobs once provided Black workers relatively more job security, early evidence suggests the burden of federal job cuts has fallen disproportionately on Black women. The potential consequences of these actions go beyond job losses and include major implications for Black family incomes and racial and gender pay equity.

An accounting of the significance of federal sector employment for Black workers and families

As detailed in the history presented above, between 1941 and 1981, Black workers gradually improved their employment status in the federal government through collective and individual activism of groups like the National Alliance and Blacks in Government, within a context of official support for their rights through executive orders and landmark civil rights legislation. This improved employment status expanded the ranks of Black federal workers who were able to secure higher incomes. By 1970, the median household income for Black families was just $6,279 compared with a range of $7,178–$10,987 for those earning GS 5–8 salaries in the federal government. In fact, Black federal employees compensated between grades GS 5–8 were either close to or slightly above the national median of $9,867. This remains a factor today as the high concentration of federal employment and related professional job opportunities in the Washington, D.C. metro area helps to make metro D.C.’s Black median household income ($89,912 in 2023) one of the highest in the nation and well above the overall national median of $77,719.

Analysis of 2024 state-level data from the Office of Personnel Management (OPM) reveals that over 300,000 federal workers (excluding USPS) reside in the D.C. metro area, accounting for 60% of all federal workers in the District of Columbia and surrounding states of Virginia, Maryland, and West Virginia. Black workers are just over one-fourth of the federal workforce in the District of Columbia (28.8%), Maryland (27.9%), and Virginia (26%). While the D.C. metro area is home to the largest concentration of federal workers, over 90% of the federal workforce live and work outside the nation’s capital. Black workers account for at least one-fifth of the state’s federal workforce in 12 states beyond the D.C. metro area.

Implications of massive federal job losses and the unfinished business of equity

To understand the stakes of federal workforce contraction, it is necessary to compare the demographic and wage structure of federal employment with that of the broader labor market. As shown in Table 1, in 2023 and 2024, Black workers were 12.5% of the private-sector workforce, compared with more than a fifth (22.6%) of all workers in the federal sector—a share that also exceeds their representation in the entire public sector (16.4%) which includes state and local governments. Black women’s share of the federal workforce (12.8%) was double their share in the private sector (6.4%).

A national comparison of hourly wages at the median and for low-wage (10th percentile) workers demonstrates the clear monetary benefit of federal over private-sector employment. Figure A shows this is true across race and gender both at the middle and lower end of the wage distribution. The hourly wage of a typical (i.e., median) Black federal worker is more than 40% higher than that of the median Black worker in the private sector. Black federal workers—median and 10th percentile—also have higher wages than same gender white workers in the private sector. It is worth noting that these wage comparisons don’t account for the more generous benefits typically offered to federal and other public-sector workers, which further raises the value of their total compensation. The higher wages earned by federal workers largely reflect the higher share of college and advanced degree holders and higher rates of union coverage relative to private-sector employees. Less than 7% of private-sector workers are in a union or covered by a union contract compared with 35.9% of all public-sector workers and 29.5% of federal workers (see Table 1). While greater union coverage helps to boost wages and benefits for all workers, it is an even more important factor in raising wages of those for whom racial and gender discrimination further restrict individual bargaining power.

Another factor contributing to better pay outcomes in the federal government is the use of the Schedule (GS) pay scale which applies to over 70% of white-collar federal jobs. This helps to mitigate pay discrimination in the federal government by standardizing the qualifications and compensation associated with a specific position and consistent with experience, job performance, and local cost of living. On average, Black federal workers appear to experience only marginally improved pay equity over Black workers in the private sector, while the Black-white wage gap is much smaller in the public sector, overall.

In the federal sector, Black workers earn 12.6% less than white workers with the same levels of education, experience, union coverage status, gender, and state of residence, compared with 14.9% less in the private sector and just 3.8% less in the overall public sector (see Table 2). Although there is a sizable wage gap between Black women and white men across sectors, the federal sector gap (26.1%) is nearly 8 percentage points lower than the gap that exists in the private sector (33.9%). Given enforcement of the GS pay scale, remaining racial and gender pay gaps among federal workers likely reflect disparities in job positions and associated GS levels, a long-documented concern of Black federal worker advocates and activists. These disparities may stem from the underrepresentation of Black workers in higher-level, higher-paying positions, which can reflect differences across agencies in workforce demographic composition, occupational structures, and promotion rates. Notwithstanding the relatively higher economic position of many Black federal workers, these results epitomize the unfinished business of eliminating pay inequity and occupational segregation across all sectors of the labor market.

Conclusion

This brief summarizes the important role federal-sector employment has played in providing better job opportunities for Black Americans than have traditionally been available in the private sector. However, those outcomes have never been a given. A solid history of advocacy and activism by and on behalf of Black federal workers alongside others were critical in securing important wins through executive actions and policy change. Moreover, pushback against some of the most egregious violations of federal worker’s civil and worker rights have at times resulted in stronger, more broadly enforced labor and equal employment standards, improving outcomes to the benefit of all workers.

Key findings:

• CEO pay at the top 350 U.S. firms rose 14.0% in 2025 to an average of $27.9 million.
• CEOs made 325 times as much as the typical worker in 2025. It hasn’t always been this way. In 1965, CEOs were paid 21 times as much as a typical worker.
• From 1978–2025, top CEO compensation skyrocketed 1,316% while typical workers’ compensation increased only 28%.
• CEO pay has not climbed so fast because their skills or productivity rose spectacularly. It has risen instead simply because CEOs have gained and used increasing leverage over the corporate boards that set their pay.
• Policymakers can rein in excessive CEO pay through more progressive tax policy, corporate governance reforms, and strengthened labor standards, including laws that make it easier for workers to unionize. One new EPI policy proposal calls for default collective bargaining at firms where the CEO-to-worker pay ratio is especially exorbitant.

Our latest analysis finds that CEO pay rose 14.0% at the top 350 U.S. firms in 2025 as the CEO-to-worker pay ratio hit 325-to-1.

Between 1978 and 2025, CEO pay jumped an astronomical 1,316% while typical workers’ pay only rose 28%. As a result, the CEO-to-worker pay ratio increased more than tenfold since 1978.

Figure A demonstrates the rise in the CEO-to-worker pay ratio using both the realized and granted CEO compensation measures (for more on our methods and additional analysis, see EPI’s CEO pay landing page). The pay ratio increased a modest amount between 1965 and 1978, but then exploded in the late 1990s and has remained extraordinarily high since then, ebbing some during recessions and stock market losses.

CEO Pay

Media reports have called attention to Elon Musk’s Tesla pay package for 2025, which the company reports as $158 billion. We should note that this $158 billion is not in our measure of CEO pay—largely because it was not paid and likely never will be—and therefore cannot explain the uptick in CEO pay in 2025. The $158 billion refers to the potential pay Musk could receive only if Tesla meets a number of performance metrics related to its output and share price in coming years. Most market observers deem it highly unlikely that Tesla will meet these metrics, and a large portion of this $158 billion has already been “lost” since some of the performance metrics were required to be met in 2025 and were not. In some ways, the $158 billion expense reported by Tesla is just an accounting exercise—the amount that other shareholders’ stock would have been diluted had the performance metrics been met.

CEO pay is strongly related to the stock market, though less on stock options

The jump in CEO pay in 2025—though striking—isn’t surprising given how closely CEO pay tends to track gains in the stock market, as the S&P 500 rose a similar 11.8% in 2025.

While salaries were only about 5% of total CEO pay in 2025—which averaged $27.9 million—the vast majority of CEO pay (82%) was in the form of stock options or stock awards. However, there has been a marked shift away from stock options to stock awards over the past two decades. As Figure B shows, the share of compensation in stock options has fallen from 85% in 1992 to 26% in 2025.

CEO Pay

This shift to stock awards has been driven by executives’ search for lower taxes as well as regulatory changes made in the early 2000s. Stock options are more likely to be considered ordinary or W-2 income rather than other stock-based pay, which is taxed at a lower rate. Further, companies used to be able to offer stock options to executives without notifying shareholders of the expense. But a regulatory change after 2006 required the full expensing of stock options in reports to shareholders, making them appear more costly to grant.

While tax incentives and these regulatory changes may have incentivized this shift away from stock options, this shift has also likely led to a slightly better alignment of CEO pay to longer-term company success. Stock options allow executives to benefit from rising stock prices, but do not penalize them for falling prices. Stock awards, conversely, expose executives to the cost of falling stock prices as well as the benefits of rising prices. While an improvement, the shift from stock options to stock awards has obviously not been a transformational win for making CEO pay more generally fair and rational.

This shift from stock options to stock awards also has implications for the measured share of corporate-sector income accruing to capital versus labor. Over a full business cycle, the labor share of income has often reflected the leverage workers have to increase their wages versus capital owners’ ability to keep revenue in the form of profits (see Figure C). For arcane tax and data reasons, income from stock options is more likely to be recorded in economic data as labor earnings than is income from other forms of stock-based pay. Therefore, some of the losses in labor’s share of income in Figure C may be in part due to the changing ways top executives are receiving their compensation rather than simply the unequal balance of power between capital and labor.

CEO Pay Policymakers can rein in excessive CEO pay

The rapid growth in CEO pay over the last several decades has not been driven by rising CEO productivity. Instead, it has simply been the result of executives’ ability to leverage their political and economic power to increase their own pay. As such, excessive pay can be reined in with policy changes.

Policymakers can alter tax policy to lower incentives for excessive CEO pay and change corporate governance laws to give shareholders greater ability to penalize excessive pay packages. Lawmakers can also strengthen labor standards to give workers more leverage to secure a larger share of the income generated by the firm, leaving less for CEOs (and shareholders) to claim.

Policymakers can further boost leverage for typical workers by strengthening the right to organize and form unions. For starters, Congress can pass the Protecting the Right to Organize (PRO) Act to make it easier to organize for the tens of millions of U.S. workers who want unions at their workplace. Further, policymakers can pass legislation instituting default collective bargaining when CEO-to-worker pay ratios are especially exorbitant.

Below, EPI senior economist Elise Gould offers her insights on today’s release of U.S. Census Bureau data for 2025 on annual earnings, income, and poverty. Read the full thread here. 

 

This morning, the Census Bureau is releasing the latest data on Income, Poverty and Health Insurance!

Note: these data are for 2025 and will not reflect changes in the labor market, rising inflation, and attacks on vital safety net policies, hitting families in 2026.

www.epi.org/blog/2025-ce…

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— Elise Gould (@elisegould.bsky.social) 8:58 AM · Sep 15, 2026

Real median household income rose 2.6%, while the official poverty rate fell 0.5 percentage points. The supplemental poverty rate was 13.1%, no change from 2024.

Income inequality rose in 2025, as high-end household income increase 1.7% while lower-income households saw no change in their incomes.

— Elise Gould (@elisegould.bsky.social) 9:10 AM · Sep 15, 2026

Median household income rose 2.6% between 2024 and 2025. Black households experienced the largest increase in income (4.8%), though Black median income remains significantly lower than any other group: $59,980 for Black households versus $96,710 for white and $126,300 for Asian households.
#EconSky

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— Elise Gould (@elisegould.bsky.social) 9:16 AM · Sep 15, 2026

Household income at the 90th percentile and the 50th percentile rose 2.8% and 2.6%, respectively, while household income at the 10th percentile saw no improvements (-0.8%). As a result, key measures of inequality: the 90/10 and 50/10 income ratios both increased.
#NumbersDay

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— Elise Gould (@elisegould.bsky.social) 9:31 AM · Sep 15, 2026

Median earnings for full-time workers was $66,620 in 2025, not significantly different from 2024. However, median earnings rose for women (3.2%) and were unchanged for men. Together this led to an increase in the female-male earnings ratio, hitting 83.9%, up from 80.6% in 2024.

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— Elise Gould (@elisegould.bsky.social) 9:40 AM · Sep 15, 2026

The supplemental poverty measure is a key poverty indicator using an expanded definition of resources and costs. In 2025, the supplemental poverty was unchanged.

Social Security remains the most important anti-poverty program in the United States, lifting 28.8 million people out of poverty in 2025.

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— Elise Gould (@elisegould.bsky.social) 9:48 AM · Sep 15, 2026

When workers seek to form a union, employers often respond by hiring union-avoidance consultants to dissuade workers from their organizing efforts. A recent EPI and LaborLab report estimates that employers spend over $1.5 billion each year on union avoidance. Last week, our partners at LaborLab released new tools that shed light on the highly secretive and highly profitable union-avoidance industry.

The Union-Busting Cost Calculator helps workers estimate how much their employers are spending on union-avoidance consultants, instead of investing that money in their workplaces. Too often employers claim unions are third parties that disrupt workplace dynamics and create costs for workers who are paying for representation they don’t need. On the contrary, unions win wage increases and benefits for workers, and it is employers who spend millions on third-party union-avoidance consultants, rather than raising workers’ wages and improving working conditions. Further, employers often hire the same consulting and law firms to help with their union avoidance. LaborLab’s union-buster search helps demystify who the key actors are in the union-avoidance industry and identify who is behind anti-union campaigns.

If workers understand who their employers are hiring and how much they are spending on union avoidance, this will empower workers in their organizing campaigns. The union-avoidance industry has a devastating impact on workers’ ability to organize in the United States. That is because decades of federal policy and court decisions have weakened federal labor law to the point that employers violate the law with impunity. Union-avoidance consultants and law firms exploit these weaknesses to reach the same goal: to defeat the union. This has caused a significant decline in unionization rates in the United States: Only 1 in 10 workers are represented by a union today, compared with 1 in 3 during the 1950s. It is well documented that the decline in unionization has contributed to increased inequality over the past 45 years.

However, this hasn’t dissuaded workers from organizing. Workers across industries—from graduate students to nurses to baristas—are forming unions and collectively bargaining over improved pay, benefits, and working conditions. In 2025, more than 16.5 million workers were represented by a union, which is the highest level recorded in 16 years.

It should be no surprise that workers are seeking to form unions, even with the odds stacked against them. Unionized workers are more likely to have higher pay, access to employer-sponsored health insurance and retirement, and safer working conditions compared with nonunion workers. Further, the benefits of unions go beyond a single workplace; they also help create stronger communities. Much like unions are a tool to rebalance unequal bargaining power in the labor market, resources like LaborLab’s Union-Busting Cost Calculator and the union-buster search can help even the playing field for workers.