Final answer:
The lower bound of compensation for pay grades is influenced by federal minimum wage laws, sitting at $7.25 per hour as of 2022, with the intent of allowing full-time workers to achieve a basic standard of living. The general schedule for civil servants includes fifteen grades with ten steps, accounting for the responsibility and seniority levels.
Step-by-step explanation:
Setting the upper and lower bounds of compensation for individuals within a pay grade involves considering various legislative and economic factors. Civil servants in the U.S. are generally paid according to a General Schedule (GS) that accounts for levels of responsibility (grades) and seniority (steps). The modern GS includes fifteen grades, each with ten steps. The lower bound, or minimum compensation, is influenced by federal laws such as those establishing the minimum wage, currently $7.25 per hour as of 2022, which acts as a price floor in the labor market. This level is designed to ensure that full-time workers can afford a basic standard of living, although living wage movements argue for higher minimum rates to meet current living standards.