The State of Government Workers

By Mike Koetting April 4, 2019

The recent shutdown of the federal government got me thinking again about something that has been on and off my mind for about 20 years, the state of government workers.

I started thinking about this one day in a class I was teaching and it dawned on me that the students sitting in front of me had never been alive when attacking government wasn’t the predominate mode. They were raised in an era, as Ronald Reagan put it, not only was government not the answer, but it was the problem. While it is possible that they grew up in houses that offered a broader view, it is impossible to escape the society-wide attitude that, even at its best, there is something suspect about government. (My niece recounts a classmate at the Kennedy School saying in class: “Private industry is always more efficient than government. Everybody knows that.”)

The government shutdown got me thinking again about the longer-term problems of this attitude. This is the first of three posts on the topic of government workers and the broader society.

I was struck that, particularly for the first weeks of the shutdown, coverage of the shutdown focused almost exclusively on the hardships that it placed on federal workers, and, belatedly, the contractors who depend on the federal government. I understand the focus on the human suffering of the workers and their families. But, by the same token, I wanted the coverage to give equal focus to the fact that this was not simply the loss of income for federal workers, but it was also a loss to the American people because important jobs weren’t getting done.

As the shutdown dragged on, the media did start to get clearer about things that weren’t getting done. A partial list included Federal Aviation Inspectors, IRS services and reporting, processing of requests for agricultural subsidies, wildlife refuges, FDA inspections, EPA inspections,, immigration hearings, Homeland Security e-verify for employers, requests for HUD housing vouchers, data kept by US agencies—including reports used by businesses and investors, Federal Trade Commission services–including its consumer identify theft reporting system, certain services relevant to weather reports, the FEMA office that sells flood insurance, virtually all civil cases in federal courts delayed, National Transportation Safety Board review of fatal accidents, preparation and training for the coming wildfire season. In short, life as we know it would be difficult to proceed without the services of the federal government. And, remember, the above list is only what wasn’t happening because of furloughed federal employees….and does not include all kinds of government workers at state and local levels.  

So, maybe people will admit that the government work force serves important roles. At the same time, I am willing to guess that the preconceptions many people have about the government work force are inaccurate.

Take for instance size. Between 1970 and 2018, the federal non-military workforce has declined by about 2%, virtually all in the Post Office. The number of other, non-military, federal employees has been level. During that time, the US population has increased by 70%, Congressionally mandated rules and regulations almost doubled, and Federal spending increased exponentially. So, in one sense, the size of government isn’t growing, in fact is shrinking relative to what needs doing.

On the other hand, the size of the federal service has been kept stable by shifting a large amount of government work to contractors. The magnitude of this escaped my attention until the shut-down got me curious. Turns out, the contracted federal work force is about 80% larger than the civil service workforce.

Moreover, while it may come as a surprise to many, this contracting apparently makes government more expensive. It is true that average salaries among contractual workers are typically lower than federal salaries, sometimes much lower. [I will address the issue of government salaries in subsequent posts.] But, on balance, once overhead and other expenses, including returns to shareholders, are added in to contractors costs, best guesses are that contracted work is materially more expensive. One investigator recounts a series of head-to-head competitions run by the Bush administration:

These competitions were used…to test its theory that any job listed in the “Yellow Pages” phone directory can be done at lower cost by contract employees. Federal employees won 83 percent of the tests, suggesting that they could do the jobs for less when given the opportunity to build a most-efficient organization.

This large amount of outsourcing combines with other trends to raise some concerns about the future of the government workforce, particularly at the federal level.

To start with, it has changed the shape of the distribution of work done by career civil servants. More and more lower and mid-level jobs have been outsourced. This has resulted in the creation of a “top heavy” civil service—that is to say, a disproportionate share of its positions are upper mid-level and higher. That in itself is not necessarily problematic, but it is corresponding to another problem—the aging of the civil service.

A report by the Volker Alliance, a non-profit group established by Paul Volker and others to advance the effective management of government, suggests the federal government is edging toward what experts have described as a “retirement tsunami”–54% of all federal employees are aged greater than 45, as opposed 38% in the private sector. At the other end of the age spectrum, only 16% of all federal employees are under 35, as opposed to 40% in the private sector. At some point in the relatively near future, there will be a severe shortage of civil servants who have the experience to successfully manage the much larger number of contractors.

What will happen then? There will be pressure to use contractors to fill gaps because we don’t have enough people coming through the ranks to effectively manage. At some point having so much of the federal workforce working not as civil servants, but for companies that have at least somewhat different agendas becomes a problem. This, again according to the Volker Alliance:

…weakens the chain of command and produces government failures, such as the failure to connect the dots that led to the 9/11 attacks and the sluggish response to Hurricane Katrina. It also encourages the use of contract and grant employees to backfill vacated posts.

In short, the use of contracting has become so pervasive, the difficulty of getting an actual civil service job so great and the disincentives from the relentless pounding on government have gotten us to a point where more reliance on contracting can become self-fulfilling.

It is also the case that the privatization of large portions of the federal workforce has adverse consequences for the workers themselves. This is also true at state and local levels, although the diversity of approaches in these locales makes generalizations more risky. More in the next post.

Author: mkbhhw

Mike Koetting’s career has been in health care policy and administration. But it has always been on the fringes of politics. His first job out of graduate school was conducting an evaluation of the Illinois Medicaid program for the Illinois Legislative Budget Office. In the following 40 years, he has been a health care provider, a researcher, a teacher, a regulator, a consultant and a payor. The biggest part of his career was 24 years as Vice President of Planning for the University of Chicago Medical Center. He retired from there in 2008, but in 2010 was asked to implement the ACA Medicaid expansion in Illinois, which kept him busy for another 5 years.

One thought on “The State of Government Workers”

  1. I worked for StTe go t 42 yes, DPA/DHS. I remember when Medicaid rides were contracted out to Maximus. They oftentimes canceled cases wrongfully so many clts ended up coming to the local office to be reinstated. I also seem to recall that clts were to fax their rede form to them but the fax number didn’t work.
    Govt workers provide a valuable service to society and should be recognized for it. Elizabeth Warren in her book, “A Fighting Chance” mentions this on page 185.


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