by Allan Schweyer
In addition to the two year pay freeze in place for federal public servants, some members of Congress are proposing that government employees contribute five percent more toward their retirement funds. In other words, federal employees would face a fairly significant pay cut on top of a pay freeze. These measures on top of general "fed bashing" are combining to sap the already low morale of the federal public service.
Public opinion concerning government and government employees is the lowest it's been in decades. Last year's media attention to pay disparities between the public and private sectors didn't help (yes, federal salaries are higher than average but so are the qualifications). This year's GSA and Secret Service scandals made matters worse. So in an environment where both Congress and the White House are looking for politically safe budget cuts, federal public servants are a very tempting target.
Under these attacks, one might expect to see large increases in employee attrition among federal civil servants. According to the Bureau of Labor Statistics, however, attrition has held at the relatively low rate of about five percent for several years. Clearly, the deep recession has made government workers reluctant to quit. An even greater disincentive for a large number of mid and late career civil servants are locked in pension plans. Those who leave stand to lose a great deal if they don't complete their minimum terms of service.
Both of these impediments to leaving are becoming less influential however. First, while unemployment is still high at 8.2 percent, the more difficult to fill positions in government, those with requirements for four year degrees and several years of experience, have low national unemployment rates (about 4.2 percent) and lower still in the greater DC Area (less than three percent). As the economy slowly improves, the war for skilled, educated and experienced talent can only intensify and the government, with its pay freezes, threats of pay cuts and overall morale problems, will have a very hard time competing. And just as this is happening, retirement of the fed's baby boomers is starting to accelerate according to a Partnership for Public Service study released in April this year. The golden handcuffs of defined pension plans are a thing of the past for young public servants who entered the federal service under far less generous pension plans. For them, quitting government means taking their 401k with them rather than sacrificing a generous retirement package.
Much of the American workforce is making sacrifices. Auto workers, for example, who lost jobs years ago when manufacturers moved jobs out of the country, are now taking back those jobs but at half pay as a condition of moving those jobs home. This isn't driven by corporate greed, it's simply adjusting U.S. pay rates to a global standard where the formula focuses on productivity and pays accordingly. Federal public servants should be paid against the same standards. The difference is that global pay for highly skilled knowledge workers is still high relative to most factory work. The fact that government work, especially inherently governmental work, cannot be offshored, means that the government has to compete for domestic skilled talent only.
With the economy rebounding and baby boomers in government retiring, a more strategic view should be taken. Targeting the federal workforce may be politically expedient but the harm done could be long lasting, with implications for all Americans.