Federal jobs fast becoming an endangered species

March 10, 2011: 9:16 AM ET

Federal agencies are imposing hiring freezes, eliminating openings, and preparing for severe budget cuts, dashing the hopes and prospects of many upcoming graduates and other jobseekers.

By Elizabeth G. Olson, contributor

Only months ago, getting a job as a federal government worker was a reasonably safe bet. Private sector hiring was sputtering. Baby boomers at federal agencies were retiring in droves, replaced by newly recruited college graduates.

But before the class of 2011 could don their graduation caps, the federal job market has turned dramatically weaker. Agencies are imposing hiring freezes on new employees or filling vacant positions, as they wait under the raised hammer of a government shutdown at worst and severe budget cutbacks at best.

The resulting federal job shrinkage is due to huge budget deficits, which were already ballooning years earlier, with income tax breaks and two wars depleting federal coffers. The 2008 Wall Street meltdown pushed everything over the edge, and federal programs and personnel are now prime targets as deficit hawks complain the government is bloated and that employees work too little and are paid too much.

Dashed hopes for upcoming grads

The latest jobs forecast for 2011 college graduates found that the government is expected to fill 10% fewer posts than it did last year. The 2011 jobs outlook, by the National Association of Colleges and Employers, found that more than one-third of government employers plan to cut plans to hire new college grads -- the largest group of the industries surveyed. And government employers planning decreases are reducing their staff numbers by at least 25%.

Upcoming graduates like Emily Marsh say they are casting aside their plans -- and dreams -- of landing a federal job. Marsh, 20, majored in international relations with the hope of working for the State Department or the Agency for International Development. But finding a federal position has been discouraging.

"I honestly considered not applying," says Marsh, a Garrison, N.Y. native who will receive her degree from American University's School of International Service in May. "There are no jobs, and there's hardly any hiring at a lot of agencies.

"This is directly affecting me in my career," says Marsh, who is currently interning with an international rights group.

What happened to our "Sputnik moment"?

The paucity of openings represents a sharp turnabout from the hiring wave many anticipated, even as recently as the January 25 State of the Union speech in which President Obama called for bolstering the country's economy with labor-intense ideas such as improving infrastructure.

Two years ago, a survey forecast that 273,000 federal jobs would be available between 2009 and mid-2012. The Partnership for Public Service report found that major federal agencies would be hiring. The Social Security Administration, for example, was expected to be a prime employer, because about 66% of the agency's supervisors will be eligible to retire by 2018. Combined with the soaring benefit applications from retiring baby boomers, the agency will likely need substantial numbers of claims representatives and others to replenish its ranks.

Hiring additional full-time federal workers could reverse the tide of outsourcing federal jobs to private contractors, who currently number about 10 million, or more than five times the number of federal employees. Such "in-sourcing" of critical government functions to career civil servants would cut costs, proponents argue, because each contractor is estimated to cost the taxpayer 250% more than a government worker.

The concern over depleted federal ranks even prompted lawmakers to introduce legislation to create scholarships -- much like the military's ROTC program -- to pay for students' education in exchange for a commitment of three to five years of government service.

Such concerns have fallen by the wayside amid the budget battles and growing accusations that federal workers receive overly generous compensation and are often do-nothing paper pushers.

Sizing up the federal worker

The heated issue was thrashed out Wednesday at a congressional hearing where, perhaps surprisingly, there was broad agreement that federal employees generally have more experience and education than their private sector counterparts.

"So, in a competitive market they should receive higher pay," says Andrew G. Biggs, of the American Enterprise Institute, "but the question is how much higher?"

James Sherk, labor economist for the The Heritage Foundation, a conservative think tank, agrees, testifying that federal employees "earn total compensation 30% to 40% greater than comparable private-sector workers.

"Reducing their compensation to market rates," he argued before the federal workforce subcommittee of the House Oversight and Government Reform Committee, "would save taxpayers $47 billion in 2011."

Biggs testified that "simple pay freezes and furloughs are blunt instruments that will not get to the heart of the issue. They do not address the often significant differences in the generosity of pay among different federal employees."

Such pay comparisons are misleading and unfair, countered Colleen M. Kelley president of the National Treasury Employees Union, which has 160,000 members from 31 agencies and is the second largest government union.

Kelley stressed the importance of examining "actual job duties, not just job titles." Federal employees are also facing a two-year pay freeze on account of the "belt-tightening measure" the White House recently imposed.

"They are seeing proposals every day to expand and extend that freeze. They are seeing proposals to cut the retirement benefits they have spent years earning and have seen proposals to require unpaid furloughs," Kelley said.

To top it off, Kelley argued, they have had to bear the brunt of harsh criticism from elected officials and the public.

"They are being called lazy, selfish and greedy. Sometimes even by members of this body, who earn much, much more than they do," Kelley said.

The freeze is expected to save $2 billion initially, and more than $60 billion over the coming decade. The Obama administration argues against further paring because the 2.1 million federal employee work force is smaller than it was in 1953, nearly 60 years ago, and government services are more complex.

Eliminating employees wholesale, warned Kelley, would mean not only hardships for federal workers, it would also mean longer lines and phone waiting time for public services, and "fewer resources to handle everything from food safety to Social Security disability claims."

Last month, the private sector added 192,000 jobs, according to U.S. Labor Department data, and federal payrolls remained unchanged, for now, leaving graduating college seniors like Emily Marsh with little choice but to turn their sights to private industry.

Marsh is applying for jobs at contractors that administer international development programs for the federal government. But they are so swamped with applications that most contractors do not even acknowledge applications, but keep them in a database for six months before they are automatically removed.

"It's a tough climate," says Marsh.

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